A Wholesale Market Chapter Notes | Civics Class 7 ICSE PDF Download

Introduction

Wholesale markets, as discussed earlier, deal in supplying goods in large quantities to retailers and vendors. Wholesaling involves selling products in bulk at lower prices, so that retailers can resell them for a profit. Wholesalers typically do not promote or advertise their goods and services because their primary customers are retail businesses, not end consumers.
If the general public starts buying directly from wholesalers and learns about the lower wholesale prices, it could damage the trust retailers have in wholesalers. Despite this, in some regions of the country, consumers do get access to wholesale markets—particularly for buying agricultural goods directly from wholesalers.

A Wholesale Market

•  Given the Tiruchirapalli City Corporation's recent efforts to shift the wholesale market to Kallikudi, traders continue to pitch for establishing an integrated market closer to the city to give them better access to retail markets. 
•  Mr. Karuppiah contends that moving the wholesale section too far away from the retail market could lead to loss of business for traders. He even suggests redevelopment of Gandhi Market with better amenities to decongest the area. 
•  A representative of the Fruits Merchants' Association too felt that Kallikudi was more than 15 km away and could add to the transportation costs of the traders. 
• Wholesale trade could be moved to the new facility at Kallikudi but retailers would not relish moving there, he said.

A Wholesale Market - Khari Baoli

• Khari Baoli is a historic wholesale spice market in Old Delhi, near Red Fort and Chandni Chowk.
• It is Asia’s largest wholesale market for spices, herbs, rice, tea, etc., operating since the 17th century.
• Small quantities of goods can also be purchased despite being a wholesale market.
• Shops are identified by numbers, some over 100 years old.
• Attracts customers from Delhi and states like Madhya Pradesh, Rajasthan, and Jammu and Kashmir.
• Offers spices from around the world.

Profit Margins

• Profit depends on the selling price set by traders.
• Low prices lead to higher sales and better profits.
• High prices reduce sales, lowering profits.
• Goods go through production, assembly, sorting, packing, reassembly, and distribution before reaching retailers.
• Wholesalers buy from producers or farmers and store goods in warehouses.
• Prices are set through negotiations or auctions.
• Brokers (dalals) charge fees for negotiating deals between farmers and wholesalers.
• Farmers may sell directly to wholesalers to avoid broker fees and increase profits.
• Wholesalers sell to retailers, processing units, or exporters.
• Indian spices have high demand nationally and internationally.
• Wholesalers and intermediaries earn the most profit, while farmers get the least.
• More sellers than buyers can cause price fluctuations, leading to broker involvement and reduced farmer profits.

Efforts by the Government

• Government works to protect farmers’ interests.
• Provides information on crops and farming through phones, TV programs, and the Internet.
• Schemes like Gramin Bhandaran Yojna and Central Sector Scheme supply quality seeds, fertilizers, storage, tools, and equipment.
• Rural Godown Scheme offers scientific storage to prevent crop spoilage.
• Agricultural Marketing Information Network connects over 2000 markets, covering 300 commodities.
• Network provides price information in regional languages to help farmers get fair prices.

New Trends

• Direct marketing links producers with supermarkets, departmental stores, or hotels, bypassing wholesalers and intermediaries.
• Five-star and local hotels buy directly from producers or wholesalers.
• Growth of supermarkets has increased direct marketing, reducing the role of wholesalers.

Farmers and the Market

• Farmers are the main producers but earn the least profit.
• They prefer waiting for better deals but are forced to sell due to perishable crops and limited storage.
• Most farmers are subsistence farmers, growing crops for basic needs, so they cannot wait long to sell.
• Intermediaries buy produce at low rates, paying farmers 50%-60% of the value.
• More sellers than buyers lead to unfair deals for farmers.
• NGOs, government agencies, and private initiatives like E-Choupal help farmers by raising awareness and promoting fair trade.

E-Choupal

• E-Choupal is an ITC Ltd. initiative to support farmers.
• Provides computers with Internet access in rural areas to share agricultural and market information.
• Farmers can negotiate directly with buyers like companies or hotels.
• Offers information on weather, market prices, scientific farming, and risk management in local languages.
• Helps farmers sell farm inputs and buy produce directly, reducing intermediary costs.
• Local farmers called sanchalaks operate E-Choupal centers for ITC.
• Benefits millions of farmers by increasing their profits and reducing exploitation by intermediaries.
• Traditional middlemen (samyojaks) are involved but cannot exploit farmers due to their empowerment through E-Choupal.

Cooperative Marketing

• Farmers form cooperatives to sell their produce together and share profits.
• Cooperatives reduce exploitation by wholesalers and intermediaries.
• Provide information on seeds, pesticides, fertilizers, and machinery, and supply these to members.
• Examples include Co-optex, APPCO, and AMUL, which collect and market farmers’ products.
• Cooperatives empower farmers to negotiate better prices as a group.