21 April 2015 – Lucky Peach
When I want to buy cucumbers, which is often, I don’t need to go more than twenty-five steps from my front door. At the end of my dead-end lane there’s a guy named Pankaj who mans a pushcart loaded with vegetables, one of the 420,000-odd hawkers working the streets of greater Mumbai. From his cart, I can buy cucumbers and bottle gourds and eggplants, sweet limes and carrots and bunches of fresh dill or coriander. I can get bell peppers and string beans and, when I’m lucky, deep purple amaranth to fry with garlic and fresh coconut (ingredients, alas, that I have to buy elsewhere). It’s a quick, easy transaction. I rarely spend more than two hundred rupees in one go (about $3.20 US), or buy more than I’ll use in the course of a day. I don’t need to; I can just come back tomorrow. If I don’t have exact change, I can always bring it back later. Pankaj knows me—he’s my vegetable guy, my subzwalla—and that’s still how these relationships work.
But as simple and cheap as my little grocery trip seems, it is actually the end of a long, complicated, and tremendously inefficient supply chain that begins hundreds of kilometers away, in rural India’s agricultural hinterlands. Over the course of the twenty-four or so hours between when my cucumbers are harvested and when they reach my kitchen, they pass through at least nine different stages and many hands (always wash your vegetables). Over that time, the price of my cucumbers will also increase by as much as 500 percent.
Every vegetable sold in greater Mumbai—every piece of produce of any kind, in fact, be it grain, spice, fruit, or vegetable—has to pass through the APMC (Agricultural Produce Market Committee), a three-hundred-acre grid of two-story warehouses in Vashi, Mumbai’s shadow city on the mainland side of Thane Creek. Designed and built in the 1970s to relieve growing congestion, Vashi is a hazy, concrete accretion of good principles and soulless execution, spacious where Mumbai is cramped, “modern” where Mumbai is run down, inadvertently grim where Mumbai is indefatigably vibrant.
It took fifteen years, from 1982 to 1997, to shift the wholesale markets from their various points around Mumbai proper (often called “The Island City”) out to the APMC. Today it is, by some accounts, the largest wholesale market in Asia (Azadpur Mandi in Delhi makes the same claim). According to the APMC General Secretary, Shivaji Pahinkar, the vegetable section of the market—a quarter of its total expanse—brought in 628,000 metric tons of produce last year alone.
The majority of vegetables sold at the APMC, Pahinkar told me, are grown within about 400 kilometers of Vashi, though certain products come from significantly farther afield. Most delivery trucks arrive at the APMC between the hours of 1:30 and 5 a.m. Once the trucks reach the APMC, laborers distribute the produce among the 1,500 wholesale agents with permanent premises at the market. Vishal Chavan, a wholesale agent whose family has had permanent space at the APMC since the vegetable market came to Vashi in 1997, says that about two thousand trucks make it to the market daily, each with a carrying capacity of about one metric ton.
Chavan works with more than 250 farmers from around the area, purchasing primarily cucumbers, but also large quantities of bell peppers and bitter gourds, and smaller quantities of cabbages, cauliflowers, and eggplants, then reselling all of these at the market. Each morning, as many as a thousand retailers will pass by his stall, shop #96–98, to check his prices. On a given day, he told me, he will buy around twenty-five thousand kilograms of cucumbers, nine thousand kilograms of peppers, and six thousand kilograms of bitter gourds, and sell them to about four hundred different retailers from around the city. For every fifty-kilogram gunnysack, he told me, he deducts the price of two kilograms to compensate for the weight of the packaging, for any produce that may have been damaged in transit, and, of course, to encourage the retailer to buy.
Chavan is the fourth generation in his family to work in Bombay’s wholesale markets. His great-grandfather and grandfather worked as laborers, loading and unloading goods for large retailers. Chavan’s father, born in Bombay in 1962, took a decisive step up the socioeconomic ladder when he joined an uncle’s wholesale business in 1980 and began learning the ropes. In 1995, when the announcement came that the wholesale vegetable markets would move from their old locations out to Vashi, he purchased a space in the new market and established his own company. Chavan, who earned his MBA in Delhi after a yearlong exchange program with London Business School and Cal State, San Bernardino, joined his father’s company in 2013.
Thanks to his father’s thirty-plus years working in the markets, Chavan maintains close relationships with his suppliers. Remaining in contact with those suppliers throughout the morning allows him to keep ahead of stock and base his negotiations on the anticipated supply. Negotiations for prices begin from the closing price on the previous day, but prices can fluctuate pretty wildly according to what’s shipped in from the farms on a given morning. On the day that I met him, April 3, Chavan sold his cucumbers at an average rate of eight rupees per kilogram. Just three days earlier, the price for cucumbers had gone as low as three rupees per kilogram. On the best days, Chavan told me, the price can climb as high as eighteen rupees per kilogram.
At the market’s most frenetic hours, from roughly 3 to 6 a.m., it teems with people. Hundreds of men in graying sarongs dash up and down the aisles, balancing huge gunnysacks of vegetables atop their heads, soiled white t-shirts hanging lank from slim, frail bodies that seem compressed under all that weight. Others sit in circles, sorting through piles of coriander six feet across. Cauliflower leaves and other trimmings turn to slick brown sludge as they’re trampled into the concrete.
During these early hours, Chavan will have sixty people on the floor helping to load and unload goods, at a charge of seven rupees per gunnysack. Another cadre of sixty-odd laborers will help weigh the gunnysacks at a rate of five rupees per bag. Transport fees for the drivers bringing the goods from the farm to the APMC average at about seventy rupees per sack, a cost that, along with Chavan’s 7 percent agent’s commission and the 0.8 percent market tax, comes out of the farmer’s final cut. For each fifty-kilogram gunnysack, sold at eight rupees per kilogram—discounting what’s lost to damage in transit—the farmer will take home 285 rupees (about $4.50).
The APMC earns the majority of its revenues—a total of 1.2 billion rupees last year, Pahinkar told me, or about $19.3 million—from its own tax levied against retailers, and from a handful of other nominal charges. Last year, after expenses used for electricity, security, and maintenance, the APMC came away with a surplus of 480 million rupees, now being put toward a sizeable expansion of the market that will include export warehouses.
Once the retailers have purchased their vegetables—many will leave with several metric tons of goods to sell elsewhere—they carry them to nodal markets like those in Dadar and Byculla, both former sites of large wholesale vegetable markets before their operations shifted to Vashi. Pankaj, who sells me my cucumbers, goes to Dadar by about 6 a.m. to purchase his goods from a retailer there. On April 3, he told me he’d purchased his cucumbers at a rate of thirty-two rupees per kilogram and sold them on to me at forty, five times the wholesale price.
On the day I met Vishal, I asked him what he thought about the APMC system—both as someone working within it and as someone who has studied business principles outside of it. “It’s not efficient at all, in any sense,” he told me with a good-natured laugh. Too much is wasted, he said. Vehicles arrive at inconsistent times and, because of delays, quality declines sharply. “There’s a gap in expectations between farmer and consumer.”
Which is not, of course, the only gap. When I spoke with Pahinkar, he mentioned, albeit obliquely, the sorry conditions under which many of Maharashtra’s farmers and laborers live. “We have no controls on production, so we can’t control fluctuation in rates,” Pahinkar said. “But the APMC gives farmers a good forum to show their goods and get a good price.”
Surely it’s a better system than what would have existed before the APMC, with retailers going directly to farmers and essentially assigning a price to them. Surely it’s better that the prices are now negotiated according to supply and demand. Surely it’s a good thing to employ such a huge number of people.
And yet still, I can’t help thinking about this: On April 3, 2015, I bought a single kilogram of cucumbers from my vegetable guy for forty rupees. The farmer who grew my cucumbers probably didn’t make much more than five per kilogram. So who exactly is getting a good price?