Middlemen: Liability or necessary evil to farmers?

06 Dec, 2022 - 00:12 0 Views
Middlemen: Liability or necessary evil to farmers? Buyers gain access to the right quantities of goods and services through the middlemen’s networks.

The Herald

Obert Chifamba-Agri-Insight

TO the farmer, a middleman can be anyone between that individual who links them to traders and final markets or that cozener who promises one thing and does another as soon as an opportunity presents itself.

Ordinarily, a middleman should be an intermediary or agent between two parties.

He or she can be a dealer, agent, or company intermediate between the producer of goods and the retailer or consumer.

A middleman plays the role of a go-between in a distribution or transaction chain through facilitating interaction between the involved parties.

Naturally, the middleman should provide trading intelligence and services, investment advice, and solutions to clients before charging a brokerage fee in return.

The middleman plays a pivotal role in ensuring farmers can easily access some services without hassle.

There, however, should be some kind of symbiotic relationship between the middleman and the farmer, with the middleman giving services that the farmer would not have easy access.

The farmer is obliged to give the middleman a token of appreciation depending on the nature of their agreement.

It is also the middleman who is supposed to provide valuable information and feedback to producers about consumer behaviour, changing tastes and fashions, plus upcoming rival businesses while promoting the goods to the consumers on behalf of the producers as well.

Middlemen should also avail goods and services available to consumers at the right place, time and in the right quantity.

On one hand, both consumers and producers naturally benefit from the services of the middlemen who should be constantly matching the supply and demand in the market as well as provide valuable feedback to the producers about their market offering.

This means a lot of other people benefit from their services involuntarily along the agriculture value chain.

Buyers gain access to the right quantities of goods and services through the middlemen’s networks.

Under normal circumstances, these are some of the attributes, services and advantages associated with middlemen, but the class of brokers prowling the local farming communities and markets today is something else.

It may not be all of them, but the renegades in their ranks have unfortunately soiled the reputation of the majority to the extent that most people now believe that they are doing more harm than good and should be eliminated.

The chicanery starts as soon as the farmer approaches them for their services with everything that follows mostly just a string of falsified information to milk the producer dry of hard-earned money.

In most cases, these fraudulent middlemen just set in motion a vicious cycle of price inflations that occur each time goods exchange hands from one of them to the other before they get to the consumer or eventual buyer.

This means that a higher price is charged at each junction the goods pause for a moment, with a new profit margin being factored in for every middleman involved, which leaves the consumer to ultimately bear the price of having these brokers in the channel.

Middlemen specialise in performing crucial activities involved in the purchase and sale of goods in their flow from producers to the ultimate buyers.

They typically do not produce anything, but possess extensive knowledge of the market, thereby charging a commission or fee for their services.

Although it is difficult to physically eliminate them because of their seemingly omnipresent nature, the supply chain can be shortened through forward integrated co-operatives among the smallholder farmers for higher income and sustainability.

If the farmers are united and work jointly to scout for markets before pooling resources to transport produce to markets and negotiate prices as a unit, they can easily push the middlemen out of the picture.

But there is this stubborn fact that will remain sticking out like a sore thumb — middlemen can be eliminated, but their services will still remain needed.

With the exception of direct dealings or one-to-one transactions, not much exchange can materialise without them. They can be eliminated, but their functions will still remain relevant.

It is, however, sad that despite their colossal relevance to the farmer’s cause, the middlemen have demonstrated that they are there to line their pockets and not facilitate trade between the farmer and markets, as the matrix should be.

They have this tendency to inflate prices for services even when there is no need to do so, which leaves the farmer getting the smallest chunk of the revenue generated.

The long and short of this is that the middlemen and traders on the other end are the ones benefiting more than the producer.

In most cases, the numerous payments farmers are made to make as produce goes to the market is purposely overestimated by the middlemen in cahoots with the buyers at times to safeguard their profit margins.

Usually, the ‘poor quality’ tag is the farmers’ biggest undoing, as they do not have mechanisms at hand to prove otherwise.

This problem may need a quality inspectorate that can always come to the rescue of farmers when such cases arise.

The sad reality is that farmers are usually aware of this exploitation, but circumstances force them to be dependent on middlemen for marketing and credit services at whatever cost that is set by the middlemen.

There are even cases in which the farmers end up failing to meet all their payment obligations, leaving them without an option, but to sell their harvests to the middlemen for a song to settle what they owe.

The middlemen later re-sell the produce at good price and get the profits.

The question is: Why does this kind of co-existence between farmers and the exploitative middlemen continue to exist?

This is so because in most cases, smallholder farmers who happen to be the commonest victims of this little vignette of deceit are resource-constrained and situated far away from markets.

This leaves them unable to easily access marketing services as well as marketing information, which creates an opening for middlemen to step in under the guise of helping them to market produce.

Most of these farmers’ poor socio-economic reality leaves them plagued with the poverty syndrome, comprising factors such as low income and low productivity, which deprives them of the much-needed bargaining power.

Buyers and middlemen on the other hand are relatively financially strong, as they are flush with capital and operate in the large-scale businesses of buying and selling and can easily manipulate situations to suit their whims.

Government’s involvement will improve the situation, as it can play a major role in setting up proper markets with storage infrastructure in those areas known for their prowess to produce fresh produce that easily perishes if it takes long before it is sold.

Farmers need access to the right storage facilities to allow them to look for reliable and affordable transport, while negotiating prices without involving the middlemen.

Maybe the Agricultural Marketing Authority (AMA) and the Agricultural and Rural Development Authority (ARDA) can help in this one and lobby the powers that be to consider decentralising markets for fresh produce and set up proper storage facilities as well.

Such a development will obviously take the pressure off the farmers and allow them to plan properly and not leave their fate in the hands of the middlemen.

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