Agriculture reform?

Posted: March 1, 2010 in Misc.
Tags: , , , , , , ,

A thought:

The government could mandate that the price of farm produce charged to the end consumer can only be an X% mark-up over the price paid to farmer.

Here, the end consumer can be the house wife who buys that grain to grind into flour for rotis, or Britannia which buys it to make and sell bread.

Also, how that X% margin split between the intermediaries can be left to them – the market.

The scheme could be only applicable, at least initially, only to specific food products that are highly prone to inflation / speculation.

Mainly, it ensures that at least one of the two weakest participants in marketplace, individual end buyer and the farmer, get their fair due. The current setup has created the situations where end consumers are paying ever higher prices while the farmers get lesser for their produce. In many cases, other than the speculators, most other intermediaries also seem to have margins under stress.

After-thought:

This seems wrong on many counts.

First: I, of all people, am proposing active government/regulator involvement in a marketplace with additional red-tape.

Second: The countless control/process issues that may be too complex / lucrative for our archaic / corrupt bureaucracy.

Third: There seems to be something wrong on economic basis with this setup. This is, however, too late in the night for me to think that over properly.

Also, found this article on The Economist on the same theme – food inflation, rising demand, government reactions and market based actions. Do read.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s