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Farmers Earn Half: Middlemen Eat Profits
22 Nov
Summary
- Farmers earn less than half of the final consumer price.
- A cooperative model like KMF is proposed for direct sales.
- 80% of farmers lack cold storage, forcing distress sales.
Vegetable farmers are receiving less than 50% of the final consumer price for their produce, with a significant portion of the profit being absorbed by intermediaries. This economic disparity is not linked to quality or production costs but rather a fragmented marketing chain. A recent study by the Central University of Karnataka in Kalaburagi proposes a cooperative model to address this issue.
The research indicates that over 80% of farmers lack essential cold storage and post-harvest facilities, leading to forced distress sales. Additionally, high transportation costs and the multiple layers of commission agents, wholesalers, and retailers diminish farmer earnings. The study surveyed both farmers and households in Kalaburagi to understand these challenges and consumer willingness for direct purchasing options.
To rectify this, a hybrid direct marketing system, inspired by the success of the Karnataka Milk Federation, is recommended. This model envisions village-level collection centers, cooperative transport, and a farmer-led organization managing retail outlets and an online platform. The aim is to create a transparent and fair market system benefiting both producers and consumers, with a pilot program suggested for Kalaburagi.
