Why Do Resellers "Eat Up" Farmers' Profits in Kyrgyzstan? Expert Opinion

Елена Краснова Economy
VK X OK WhatsApp Telegram


The recent rise in food prices in Kyrgyzstan has become a topic of active discussion among citizens. This is particularly felt in the context of the basic food basket. Mikhail Petrov, an expert from the analytical club "Singularis," believes that solving the problem of the price difference "in the field and on the shelf" is only possible with government investments in the creation of modern gas storage facilities accessible to every farmer.

- Why, you ask, does potatoes that cost 20 soms from farmers reach a price of 50 soms in the market? Who is to blame here: the farmer, the middleman, or the influence of imports? The price difference is explained by "shrinkage" - a loss of 15 to 25 percent in weight. The factor of contamination is also important: how many times the potatoes were planted and how many times they were affected by late blight, which has become a real scourge for our fields. This fungus once nearly destroyed the sugar industry. Although the situation is gradually improving, the problem remains relevant, - shares Petrov's opinion.

According to the expert, the storage system that existed during Soviet times has been practically destroyed in Kyrgyzstan. Modern facilities where products could undergo professional processing and sorting are absent, which leads to a significant increase in prices in stores.

- Potatoes should be stored in an oxygen-free environment to avoid oxidation. Removing oxygen and replacing it with nitrogen allows the product to be preserved without losses at a temperature of 3–6 degrees. If sorting facilities appeared in the country, the price of potatoes could be around 30 soms. I understand the middlemen, as they incur losses at every stage. The lack of a unified storage system leads to additional costs for sorting, sifting, and hiring labor, - explains Mikhail Petrov.

The expert also emphasizes that over 30 years of independence, farmers deserve to be "memorialized" for their labor, but one should not hope for a solution to the problem from private agro-corporations.

- I would not assert that agro-corporations are capable of solving this problem. Large companies often monopolize the market, and as a result, prices only rise. A government regulation system is necessary. The state should invest in the development of specialized gas storage facilities, rather than just building ordinary warehouses. This will allow for the creation of quality national products, saturate the market, and launch mass exports, - concludes Mikhail Petrov.
VK X OK WhatsApp Telegram

Read also: