Dear sir,
In the article published in The Hindu, you gave an example of farmer selling tomatoes at Rs.6 a kg and the consumer paying Rs.15 or above. You have concluded saying the difference is earned by middleman.
Let us understand how this happens?
The farmer in Madanapalli, Kadapa or any other wholesale markets sell to the buyers in basketful quantities. Ofcourse, a commission agent makes a deal between the farmer and the buyer for a small authorised commission by the market authorities.The buyer is not allowed to grade or remove any thing from the basket and he has to pick up the basket as a whole. Normally he buys a truck load from the market.
Now the buyer has to get the baskets loaded into the truck and pay the hamalis( the loaders). The truck has to carry the tomatoes from this market to the near by city or town at a cost which has to be paid by the buyer. Again this buyer becomes the seller in the city/ town and he has to sell to the local buyer by using the services of the commission agent. This local buyer again sells these either as such or some times grades and sells these baskets to the small traders. These traders after buying, grades and throw away the unsaleable and spoiled tomatoes. Now this percentage can be low or some times little higher for which he has paid to the local seller/ the first buyer/the farmer and of couse to the carrier (the truck) too.
Now, this small trader has to carry this tomatoes to his small shop in the local retail market and starts selling to the customers who visit his shop. Some times, small vendors buy small quantities either from these shops or from the second buyer in our context and carry them to the door steps of the customers.
This is, I understand, how the tomatoes become expensive by 4 times or 5 times from the farmer to the customer.
Now let us understand every body's share in the process of making tomatoes available and value addition to the tomatoes.
The farmer has to receive a price for his produce at the local wholesale market.
The commission agents have to make the deal for a small fee.
The first buyer has to pay to the loaders in the first whole sale market and the second buyer for unloading.
The truck owner has to receive his charges for carrying to the city or town.
The retail traders and small vendors have to grade and sell good tomatoes to the customers after bargain, of course. The traders can not store and sell these perishables for the next day. So he has to see that at any cost they are sold the same day.
Now every body has worked in making tomatoes available to the customer.In this process every body tries to make a living out of his service to the value added by him.
So let me say this is an economic cycle and everybody has to make a living to keep the country running economically viable and active. This applies to any product or service in the economy. Ofcourse, the expensiveness increases with more people adding a value.
Extending the analogy, an idli is served directly from the kitchen in the case of street cart vendor and costs you much less compared to the same idly served in a star hotel.
The farmer can not come to the streets of the city to sell tomatoes or the customer can not go to the mandis to buy in basket loads.
In the article published in The Hindu, you gave an example of farmer selling tomatoes at Rs.6 a kg and the consumer paying Rs.15 or above. You have concluded saying the difference is earned by middleman.
Let us understand how this happens?
The farmer in Madanapalli, Kadapa or any other wholesale markets sell to the buyers in basketful quantities. Ofcourse, a commission agent makes a deal between the farmer and the buyer for a small authorised commission by the market authorities.The buyer is not allowed to grade or remove any thing from the basket and he has to pick up the basket as a whole. Normally he buys a truck load from the market.
Now the buyer has to get the baskets loaded into the truck and pay the hamalis( the loaders). The truck has to carry the tomatoes from this market to the near by city or town at a cost which has to be paid by the buyer. Again this buyer becomes the seller in the city/ town and he has to sell to the local buyer by using the services of the commission agent. This local buyer again sells these either as such or some times grades and sells these baskets to the small traders. These traders after buying, grades and throw away the unsaleable and spoiled tomatoes. Now this percentage can be low or some times little higher for which he has paid to the local seller/ the first buyer/the farmer and of couse to the carrier (the truck) too.
Now, this small trader has to carry this tomatoes to his small shop in the local retail market and starts selling to the customers who visit his shop. Some times, small vendors buy small quantities either from these shops or from the second buyer in our context and carry them to the door steps of the customers.
This is, I understand, how the tomatoes become expensive by 4 times or 5 times from the farmer to the customer.
Now let us understand every body's share in the process of making tomatoes available and value addition to the tomatoes.
The farmer has to receive a price for his produce at the local wholesale market.
The commission agents have to make the deal for a small fee.
The first buyer has to pay to the loaders in the first whole sale market and the second buyer for unloading.
The truck owner has to receive his charges for carrying to the city or town.
The retail traders and small vendors have to grade and sell good tomatoes to the customers after bargain, of course. The traders can not store and sell these perishables for the next day. So he has to see that at any cost they are sold the same day.
Now every body has worked in making tomatoes available to the customer.In this process every body tries to make a living out of his service to the value added by him.
So let me say this is an economic cycle and everybody has to make a living to keep the country running economically viable and active. This applies to any product or service in the economy. Ofcourse, the expensiveness increases with more people adding a value.
Extending the analogy, an idli is served directly from the kitchen in the case of street cart vendor and costs you much less compared to the same idly served in a star hotel.
The farmer can not come to the streets of the city to sell tomatoes or the customer can not go to the mandis to buy in basket loads.
