Farmgate Prices Stagnate Amid Rising Costs
· GıdaTarım
While the agricultural producer price index (PPI) remains at 9.5% annually according to TurkStat data, production costs soaring to 32% and traders' insistence on a single price are trapping farmers in a production dilemma.
Agricultural PPI and Rising Cost Pressure
While input costs in agricultural production are rapidly increasing, farmgate prices are not rising at the same rate. According to TurkStat data, the agricultural PPI remained at 9.5% annually. In contrast, the cost increase faced by producers reached 32%. On the consumer side, food prices increased by an average of 37.5%, with price hikes in supermarkets and greengrocers ranging between 37% and 70%. The inability of producers to increase their selling prices directly risks their production processes.
Food Inflation Multiplies in Five Years
Based on TurkStat data, the price increase in the food and non-alcoholic beverages group has multiplied approximately tenfold in the last 5.5 years. Cumulative food inflation has surpassed the 1000% mark during this period. While global drought, frost events, fertilizer and oil prices, and labor costs are driving up agricultural product prices, the farmer at the field level is not receiving a share of this gain. High costs weaken farmers' production motivation and income balance.
Aydın's Producer's Market Predicament
The imbalance in supply and demand in the field is deepening to the detriment of the producer due to trader pricing. An Aydın-based farmer, who produces in Aydın, describes the problems in the field and the insistence on a single price with the following words:
"...We have fig trees. It's a very fruitful year... This is the case for many products, but traders are aware of this; as if they've agreed, they offer a single price... The moment they say, 'We can't look at the costs; this is the price we can offer,' there's nothing we can do..."
Even with high yields, purchase prices below cost are causing hardship for farmers.