Rethinking the Role of Middlemen: Regulation, Not Elimination, Protects Consumers
The head of the Competition Council recently offered a fresh perspective on the often-contentious role of middlemen in the food supply chain. Instead of calling for their removal, he advocated for a balanced approach: regulation and consumer protection. This shift in thinking recognizes the vital function intermediaries play while acknowledging the need for greater transparency and fairness.
It’s easy to point fingers at middlemen when grocery prices rise. The perception that they inflate costs is widespread, and the Competition Council head himself acknowledged that intermediaries can capture up to half the value of a product. But simply eliminating this crucial link in the chain could have unintended consequences, disrupting the flow of goods from producers to consumers and potentially leading to even higher prices and reduced access.
Think of it like this: a farmer in a rural area might struggle to get their produce to a bustling city market. Middlemen, with their established networks and logistics, bridge that gap. They consolidate goods, transport them, and handle storage, making it possible for consumers to access a wide variety of products. Without them, the farmer’s reach is limited, and consumers face fewer choices. This is particularly relevant in developing economies where infrastructure and market access can be challenging. According to the Food and Agriculture Organization of the United Nations (FAO), efficient agricultural marketing systems, which often include intermediaries, are crucial for reducing food loss and waste, enhancing food security, and increasing farmers’ incomes.
However, the
