Vegetables: Why do citizens complain about high prices while farmers complain about losses?
Release Time:
2011-04-20 18:44
Source:
China General Chamber of Commerce Office

In recent years, the prices of agricultural products in China, especially vegetables, have been rising continuously. Citizens complain about the "expensive" prices, while farmers complain about "losses." What is the reason?
1. Layered markups have made the "vegetable basket" heavier. According to the Ministry of Agriculture's survey, there are 33 cost items from the farm gate to the supermarket or retail link for vegetables. Taking the wholesale market link as an example, more than a dozen types of taxes and fees need to be paid, plus water and electricity, testing, garbage and sewage treatment, etc., leading to higher vegetable prices.
2. Circulation costs are too high. A vice chairman of the Ningxia Hui Autonomous Region Political Consultative Conference did some calculations: the cost for farmers to produce one jin of vegetables (an average of tomatoes, chili peppers, and rapeseed) is 0.86 yuan, the selling price is 1.02 yuan, and the farmer's profit is 0.16 yuan. However, the circulation cost for one jin of vegetables is 1.16 yuan, the supermarket retail price is 4.17 yuan, and the circulation link profit is 1.99 yuan. According to the investigation by Chai Baocheng, chairman of Tianjin Baocheng Group, the composition of vegetable prices is basically 30% for farmers, 40% for circulation, 20% for sales and supermarkets, and about 10% for other expenses.
3. Local governments replace toll fees with "fines." The state stipulates that agricultural product transportation on highways is toll-free, but local policies for vegetable transport vehicles are inconsistent. The biggest problem lies in the "overload penalties" in various places. Because the penalty weight limits vary by province and city, a vegetable transport vehicle may be legal in place A but illegal in place B. Some drivers, fearing fines, give up highways and choose rural roads for transportation, increasing the loss rate of agricultural products. The loss rate of fresh vegetables is as high as 25% to 30%, while developed countries have less than 5%. All losses in the circulation links are ultimately paid by consumers.
Chai Baocheng and other political consultative members suggest: besides encouraging and realizing "farm-to-supermarket connection," the government could consider investing in some community vegetable stores or stop charging market management fees, reduce water and electricity prices in wholesale markets, etc.; for the large amount of vegetable spoilage caused by lack of refrigerated transport, the government could consider subsidizing farmers to purchase refrigeration equipment.
(Compiled based on reports from "Shenzhen Business Daily" and others)
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