Why do vegetable farmers earn less than half of what consumers pay in Kalaburagi?

The significant gap is due to a long chain of intermediaries who absorb profits, and a lack of market transparency for both farmers and consumers.

What solution does the Central University of Karnataka study suggest for farmers?

The study proposes a cooperative model, similar to the Karnataka Milk Federation, to facilitate direct sales from farmers to consumers.

What are the main challenges faced by vegetable farmers in Kalaburagi?

Farmers struggle with a lack of cold storage, high transport costs, limited bargaining power, and daily price fluctuations, leading to distress sales.

Home / Business and Economy / Farmers Earn Half: Middlemen Eat Profits

Farmers Earn Half: Middlemen Eat Profits

22 Nov

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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.

Farmers Earn Half: Middlemen Eat Profits

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.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.