The Middlemen

Often the middlemen do not let the farming and the cottage industries flourish. Since the small producers are always in desperate need of money, they sell their products to the middlemen who, taking the benefit of their needs, purchase the products at the lowest rate. These middlemen then create an atmosphere of shortage of such food, goods or material in the market by hoarding them and thus they ultimately succeed selling them at the highest possible rates. Finally, neither the small scale producers nor the consumer ever has a chance to take the benefit of a direct marketing. We need to discard Mandi Samiti practices and allow such mandi markets for farmers to sell their products directly to the consumers. This should be an additional option after the government purchase.

In our Indian system, food products go to a consumer through a middleman. Most of the farmers face the want of basic capital to invest in producing their crops. Often, they manage to meet such requirements with bank loans and the borrowed money at a high rate of interest. Many times, they still fail to irrigate and fertilize land properly and, as a result, they have poor crops. Being overburdened by the loan & interest and the pressing need of household expenses, they sell their products as soon as it is ready. The middlemen take the advantage of their need and purchase their products at the lowest possible rates. Now since such middlemen succeed purchasing all the agricultural products from the farmers, they succeed having monopoly on it. They afterwards hoard the stock and sell that at as higher rates as it is possible for them. Now if the farmers are provided with seed, fertilizer, diesel and irrigation facility at lower rates and in sufficient quantity, they would not be compelled to sell all their products soon as it is ready or they would be able to wait for the better rates. The middlemen in this situation will not be able to have a hold on all the stock and thus the market will run with a balanced source of supply. To sum up, it can be said that if the farmers are poverty stricken, the price in agricultural products can by no means be stopped from rising as a law against hoarding is very difficult for the government to enforce quite effectively.