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Farm commodity brokers

Updated on October 8, 2016

Laguna Verde

View of the Laguna Verde (Spanish for "Green Lake"), a 1.7 square kilometres (0.66 sq mi) salt lake and endorheic basin in the southwestern Altiplano, Bolivia.
View of the Laguna Verde (Spanish for "Green Lake"), a 1.7 square kilometres (0.66 sq mi) salt lake and endorheic basin in the southwestern Altiplano, Bolivia. | Source

Life goes on - Tupac

Introduction

Brokers in a fresh produce market 'own' customers and therefore the farmers have to go through them to sell their produce. These brokers are so very powerful in the market so that they end up benefiting more from any sale than that person who actually produced the good. The middleman's cost is too high leaving the farmer with too little after this is settled.

A pavement

A pavement in an estate.
A pavement in an estate. | Source

Chris Brown - Little more (Royalty) [Explicit version]

The broker benefits most from the farm produce

In large fresh produce outlets traders flock so as to buy supplies. So, within time the market will be filled with vegetable sellers suppliers, handcart pushers and most importantly, in most cases, brokers. You would expect that when a farmer comes to the market in a pick-up van full of farm produce, that customers would flock around it for the produce. Interestingly, this is not the case normally. The farmer hands over the produce to a broker who sells it as the farmer watches. These brokers determine the price, sells on behalf of the farmer and pays him after deducting their commission and any other charges, including taxes due to the City Authority and the like. The farmer ends up getting very little from his produce.

Infinity edge pool, Mauritius

 Infinity edge pool in a luxury resort, Mauritius
Infinity edge pool in a luxury resort, Mauritius | Source

Michael Jackson - Thriller

The brokers own customers

The brokers dictate the price, when to sell, who to sell to and in fact they 'own' the customers in the market. The farmer is not allowed to deal directly with the customers and has to go through the broker. In any case, even if you were to try to sell directly, who would you sell to while all the customers are 'owned' by the brokers? In other words brokers have turned fresh commodity markets into their own mini-governments. The brokers reap the most from this chain of supply while the farmer looses out. These brokers are aware that if the farmer managed to sell directly then they would lose their commission. A good enough reason to put road blocks to such notions.

Marine life

 Many marine creatures from the Sea
Many marine creatures from the Sea | Source

Farmers also contribute to the broker menace

The chain is too long in that the farmer ends up parting with more than half his potential income to middle men any time he goes to market his produce. There is the City Authority, the broker and then there are these guys who offload the produce from the truck. There are two types brokers. One type buys the entire produce from the farmer and later sells it at a profit. Another type of broker gets the produce from the farmer on credit and only pays the farmer when the entire produce is sold and all necessary deductions done. It is difficult to eliminate these middle men because most also go to the farm to pick the produce from the farmer and transport it to the market. They are also financially well off and therefore are able to frustrate anyone bent in pushing them from the marketing chain.

View from lakeside observatory

View from lakeside observatory
View from lakeside observatory | Source

What the farmer needs to look out for

Farmers have to be warely of faulty weighing machines used by some of these brokers. Also when there is scarcity of a particular farm produce, brokers flock around any truck coming with the produce into the market. They fight over it and in the process the farmer can easily loose the produce all together. There are also brokers who get the produce by force from the farmer claiming they are buying it on credit but in real sense, they intend to make off with it.

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