Bolivia: Middlemen earn up to 50% more than potato and other food producers
Lack of access to markets and financing forces farmers to sell to third parties at low prices, which increases the cost of basic food products.
Tired of dealing with middlemen, in November 2024, Marleny Osinaga decided to sell her produce of staple vegetables directly to the public. To do so, she organized a group of producers from the Santa Cruz Valleys and began offering potatoes, onions, and tomatoes at more affordable prices, far from the high prices offered by popular markets, where merchants can mark up the price by up to 50% compared to the price received by farmers.
Intermediaries, considered key players in the supply chain, can earn profit margins ranging from 30% to 50% off the price paid to the primary producer, whether in the livestock (beef and chicken) or agricultural (grains and commodities) sectors.
Producers, who are responsible for bringing food to households, turn to intermediaries for two main reasons: lack of market access and the need for financing to sustain their production. Without these two key conditions, many are forced to sell at low prices to intermediaries, who not only buy their crops but also provide financing.
Bolivia is currently facing a significant increase in the price of basic foodstuffs, such as rice, meat, potatoes, onions, and tomatoes. This increase is due to various factors, including fuel shortages, which increase the cost of transportation and distribution. Another key factor is speculation by middlemen, who stockpile food and strategically release it to the market to increase its value.
Fight for fair prices
To break this cycle of dependency, Osinaga explains that the traveling fair he is promoting seeks to guarantee fairer prices for producers and consumers, as well as eliminate intermediaries in food sales. The fair began in November 2024 and proved to be a resounding success, despite resistance from intermediaries and constant oversight by authorities.
"Today, for example, large potatoes are sold at the new market for 32 bolivianos per arroba. The first intermediary resells them for 40 bolivianos, and the second takes them to other markets, where they sell them for 50 bolivianos or even 60 bolivianos," he explained.
As a result, the end consumer pays twice as much as the farmer receives for his harvest.
The same phenomenon is repeated with other basic products such as onions and various fruits and vegetables. "The middleman keeps 50% of the final price," he lamented.
He adds that thanks to this initiative, "We sell potatoes for 45 bolivianos per arroba. That means the consumer saves at least 15 bolivianos and the producer earns 8 bolivianos more than if they sold to intermediaries." But the lack of adequate space makes this direct sale difficult. "The new supply is controlled by resellers and unions, which prevents producers from selling there," he complains.
Today, the group includes more than 500 producers from various regions, including Tarija, Sucre, Potosí, Valle Grande, and Montero. About 20 of them participate daily in the fairs, which are held on Fridays, Saturdays, and Sundays in different neighborhoods of the city. The success of the initiative has generated conflicts with resellers, who see their profits affected. Furthermore, local authorities have been strict in their oversight, requiring permits and limiting the use of public spaces.
In addition to fruits and vegetables, the market has also included other products such as rice, cooking oil, and toilet paper, sold at lower prices than in traditional markets. "We don’t eliminate all the middlemen, but we avoid the largest ones and ensure that residents can access fair prices," Osinaga commented.
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