Bargaining is a never-ending story. Everytime consumer feels I would have got the better price if I kept a little bit of extra patience. In case of agriculture produce, it’s very difficult to understand what is the fair price. The conventional market trends are deriving prices based on Supply and Demand.
This Supply Demand economics is actually contradicting with Health Parameters. If you speak with any Nutrition Expert he/she will suggest that one should follow seasonal and regional food. In the conventional supply chain, the seasonal produce always gets very low prices as supply is adequate. On the other hand, non-seasonal items get paid extra as supply is very limited.
Ideally, products produced in line with season should get best rates. Unfortunately, this not happening and the food is treated like the commodity and sold with auctions.
It looks very complex when seen from other side but needs to derive simple systems as everything is linked to Human Health.
Let’s try to understand the entire concept with few simple examples.
Case Study 1 – Green Peas – Ideal Season is Winter
Type – Grown with Chemicals/Pesticides
Yield Per Acre – 20 Quintals (20*100=20,000)
Duration – 60-70 Days
Retail Market Rate – Rs. 30 to 50 per Kg
Farmer Realisation Price – Rs.10 to 15 per Kg
Farmers total Revenue – 10 * 20,0000 = 2,00,000/-
(Based on average price is Rs.15 per Kg for yield of 20 quintals)
This 2,00,000 is turnover, not profit. Considering 15% Margin, farmer might have earned 30,000/-
Now its only question about is it worth to earn 30,000/- after huge efforts of 2 months. That also this 30,000 he is not going to earn in a day he will be doing harvesting last for 20-30 days so his earning is also divided into small parts.
The same green peas sold at the very higher price under the label of frozen peas. Which means we are ready to pay extra money for business houses under the label of value addition but deny to pay farmers what he deserves.
So when consumers feel happy for buying vegetables at the cheapest possible price, the farmer behind that product is unhappy. A lot of discussions happens on farmers suicides, unfortunately, the root cause is overlooked. It’s very easy to help farmers by giving some one-time donations but really challenging to make sure that he earns sustainable. It’s not only about the fair price or his efforts it’s all about our own health and better living for future generations.
If we observe the minutely, very limited amount of our entire income is spent on basic needs that to grocery, still, we give extraordinary importance to the small rise in prices of such items. In fact, we should come together and support a farmer in earning Sustainable Income so that he will continue his farming and we all will able to get the best food to eat.
Fair Price is something which makes the farmer happy although in short-term consumer feeling spending extra but in long run, he will understand the value of money he spent on the farmers is negligible.