While local manufacturer Bello has announced an increase in the price that it will pay farmers for their produce, the company has spoken against arbitrary pricing on raw materials by farmers.
Managing Director of the company Michael Fagan told a press conference last week that while some farmers may want to charge exorbitant prices for their raw materials, they tend to expect a low-cost finished product on the shelves.
“So you cannot expect to sell, as a farmer, at $1 million a pound and expect me to be able to process that and get it to the market when you yourself, who is the market, is dictating what the price is. You the consumer is saying I’m prepared to pay this for the price so you can’t turn around as the primary producer just set an arbitrary price based on what? That’s what I’m asking,” he said.
“Sometimes there’s confusion on the price and farmers setting price and Bello is not paying as much as we’d like and so on. I mean, you have to look at your production inputs which we have helped in the past with. We have helped with fertilizer, we’ve helped with having our own specialists out in the field transportation,” he stated.
Fagan stressed that it is important to remember that consumers are the ones who determine the price of commodities.
“It is what the consumer will pay for the product at the supermarket. So the supermarket tells the distributor [I’m prepared to pay this for the product] and the distributor tells the manufacturer who is us, [this is what we are prepared to pay for the product],” he said.
“Generally speaking, we as manufacturers and agro processors, we have to tell the farmer this is what we’re willing to pay. It doesn’t work the other way around unless you’re selling a valuable commodity that is very rare that the primary producer is saying I have this and this is the price,” he told the press conference.