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Market forces or middlemen machinations?

Bhutan’s vegetable export is increasing at a steady pace.  We are well on track to meet the target of 7,500 metric tonnes a year by 2018.

But there is hardly anything to rejoice.  We are importing almost five times more than what we export.  For instance, we exported vegetables worth Nu 53 million in 2013, but imported vegetables worth about Nu 468M.

The deficit is huge.  We can only do so much to reduce the gap.  That is the reality.   Vegetable is a seasonal crop and, given our climatic conditions and topography, most dzongkhags cannot grow vegetables in winter.  That’s why, for some months in a year, we depend entirely on imported vegetables.

More than improvement in export import figures, what may be important at the moment is the uncontrolled price of vegetables, especially in the capital.  The price of vegetables, many feel, is shooting through the roof.  And there is nobody to control it.

Local vegetable is scarce at this time of the year.  The little that we see at the Sunday market is so expensive that the salaried group believes the increase in salary is barely enough to cover the increasing cost of vegetables.  It is an exaggeration, but vegetables are becoming dear.

It is actually an irony that prices are higher now, when more farms are connected with roads, high yielding varieties of seeds are made available, and farms are getting mechanised to an extent.  Vegetables, at least during summer should be cheaper.  But they are not.

The vegetable business, during off seasons, is monopolosied to an extent.  It is an open secret that distributors have formed a consortium, or sort of, in supplying veggies to the capital city.  Suppliers in Falakata, India, it is known, have tied up with the few distributors and refuse to sell to others.  This leaves the less than a dozen suppliers to dictate the price in places like Thimphu to Paro.

During summer, trucks and taxis laden with vegetables are swarmed upon, like ants on a worm, at the Sunday market.  Sacks of vegetables are sold to the so-called middlemen before they are offloaded.  They know there is money  in it, and busy farmers are happy as they can return to their farms immediately.  Nobody controls the price.

The loss is borne by the consumers, who are without choice.  It is quite a common scene to see middlemen making three bundles of spinach from the two the farmers readied.  The cost is the same.  The cost of fresh chili, when it first hits the market escalates almost by 50 percent when middlemen get their hands on them.  Consumers can only complain or wait for the price to go down.

Rising food price is an irreversible trend.  Market forces will determine prices, and we have a growing urban population with a higher purchasing power to ensure demand.  If the profit goes to farmers making farming a lucrative business, we cannot complain.  But at the moment, the middlemen and distributors are calling the shots.  It is an unhealthy trend.

 

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