Agricultural Marketing System Faces Challenges, Leading to Food Price Increases
The agricultural marketing system in the country faces numerous organizational and functional weaknesses, contributing to the surge in food prices. Additionally, issues with water resource management, recurring droughts, health crises, and the war in Ukraine have further exacerbated the situation.
Inflation has reached unprecedented levels, with food products experiencing an average increase of 11% in 2022. To mitigate the impact on citizens’ purchasing power, the government has implemented measures such as price controls and measures to combat speculation.
However, these efforts are unlikely to fully absorb the surge in food prices due to persistent high prices of agricultural inputs and phytosanitary products. This is attributed to structural shortcomings in the agricultural product marketing process, including the lack of a comprehensive governance framework.
Small and medium-sized farmers face challenges in organizing their product sales due to weak organizational capacity. Furthermore, the limited digitalization of marketing and valuation processes hinders access to markets for these farmers.
The report also highlights the issue of excessive intermediation, which encourages speculation and market manipulation. This practice increases the cost of products for consumers.
Proposed Solutions
The EESC proposes measures to:
- Organize marketing channels and limit speculation by intermediaries.
- Reform wholesale markets by promoting competition and transparency.
- Develop short cooperative marketing circuits and encourage small farmers to join cooperatives.
- Digitally transform agricultural marketing through online platforms for price transparency and direct sales.
- Broaden the scope of price control and competition monitoring.
- Establish a “price and margin observatory” to track and regulate profit margins.