Who are middlemen in agricultural marketing?
Middlemen act like a bridge between the farmers and the agricultural industries or agricultural business sectors.
Middlemen in farming can be zamindars, agents, agents from political parties, etc.,
They provide funds for interest, seeds, and fertilizers to the farmers.
They buy the crops from the farmers during the time of harvest.
How are middlemen affecting farmers?
Some middlemen act as a broker between the farmers and agricultural industries.
The middlemen take a commission from the farmers for selling the harvest to the agricultural industry. And the same middlemen take a commission from the agricultural industry for helping the company find customers or close sales with them. In this way, he or she is making money from both sides without working hard in the agricultural fields. The agricultural industries reduce the price for the harvest as they have to pay the commission to the middlemen. Here the farmers are losing some percent of the money.
Remember the farmers should also pay the commission to the middlemen. It is like a double break for the farmers, selling the harvest at a lower price and paying the commission to the agents.
Whereas some buy the harvest from the farmers at a lower price and sell them to the agricultural industries at a higher price. Suppose if the middlemen bought the crops at Rs. 1300/- per bag and sells it around Rs. 1700/- to Rs. 1800/- per bag, the farmer is losing Rs. 400 per bag. Now let’s do the mathematical calculation.
For eg., a farmer is growing paddy.
1 acre can harvest 2500 kgs of paddy.
Suppose if 1 bag consists of 75 kgs of paddy then 1 acre can harvest 33 bags of paddy.
For 1 bag if the farmer is losing Rs. 400/- then for 33 bags it will be around Rs. 13200/-. This entire amount will go to the middlemen.
What is the connection between middlemen and political parties in agricultural marketing?
Middlemen in agricultural marketing can be political agents also. Let’s say there is a ruling political party called ABCD and is close to one of the agricultural industries which are having a mutual understanding with them.
Now during the time of crop harvest, this political party will send their party workers as middlemen to most of the villages to buy the crops from the farmers.
Now let’s do the mathematical calculation.
For eg., if party ABCD sends 30 party workers as middlemen to 100 villages.
Each village has at least 10 farmers with 2 acres of land each who are growing paddy.
Total values:
Farmers = 100×10 = 1000 farmers
Land = 1000×2 = 2000 acres
Bags of paddy = 2000×33 = 66000 bags
Money gained by the middlemen = 66000×400 = Rs. 26400000/- or Rs. 2.64 crores.
From where do these middlemen get the money to buy the crops from the farmers?
Anyhow, these middlemen are from the ABCD party. Since they are ruling, they use the public’s money to buy these crops from the farmers. If we consider the above example, the values will be
Money spent on buying the crops from the farmers = 1300 rs per bag * 66000 bags = Rs. 85800000 or Rs. 8.58 crores.
The selling price of the crops bought from the farmers = 1700 rs per bag * 66000 bags = Rs. 112200000 or Rs. 11.22 crores.
From 11.22 crores they will replace 8.58 crores of the public’s money.
Since there is no tax for agricultural income, and the amount remaining after the replacement of the public’s money and deduction of transportation charges will be used as party funding during the elections.
Without any investment, this is how the political parties are making money.
