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

Виктор Сизов Economy
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The recent rise in food prices in Kyrgyzstan has become noticeable for many citizens. Discussions are not only about basic products but also about the overall situation in the food market. Mikhail Petrov, an expert from the analytical club "Singularity," believes that to eliminate the gap between prices "in the field and on the shelf," it is necessary to create a system of modern gas storage facilities accessible to farmers.

- Why does potatoes that cost 20 soms from farmers turn into 50 soms in the market? Who is to blame: the farmer, the middleman, or imports? There is a so-called "shrinkage," which can account for 15 to 25 percent of the weight. Additionally, there is a risk of diseases such as late blight, which significantly affects the harvest. This ailment has already led to the loss of the sugar industry. Although the situation is gradually improving, the danger remains, - explains the expert.

According to Petrov, the storage system that existed during the Soviet era has been lost in Kyrgyzstan, and modern warehouses for professional processing and sorting of products are absent. This directly affects price fluctuations in stores, which sometimes increase by 2–3 times.

- For effective potato storage, it is necessary to create a vacuum space where oxygen is replaced by nitrogen, allowing it to be preserved without loss at a temperature of 3–6 degrees. With sorting bases in place, the price of potatoes could be around 30 soms. Middlemen also incur losses at every stage due to the lack of a unified storage system, leading to additional costs for sorting and hiring workers, - adds Mikhail Petrov.

The expert notes that over 30 years of independence, Kyrgyz farmers could have been honored with a monument for their labor. However, relying on private agro-corporations to solve the problem is not advisable.

- I would not claim that agro-corporations are capable of solving this problem. Usually, large players monopolize the market, leading to even greater price increases. I believe it is necessary to create a state regulation system. The government should invest in the development of specialized gas storage facilities, rather than just building ordinary warehouses. This will help create a quality national product, saturate the market, and initiate mass exports, - emphasizes Mikhail Petrov.
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