A new pricing formula, designed to fetch better returns for farmers, processors and even dalo and cassava exporters will be formulated this month.
The Fiji Agro Processors Association believes with no pricing system in place, root crop stakeholders are not getting a reasonable deal.
Association chairman Brij Lal said the price war that existed among stakeholders was forcing prices to fluctuate and nosedive on many occasions.
For instance from a high of $2, dalo prices now range within 80 cents to $1 a kilogram.
Farmers are forced to sell root crops at low prices to processors.
“Price wars – drives prices down – when we go and buy from the farmers we force the farmers to sell at a low price,” he said.
“We’ve had several meetings already on the new formula.”
The new pricing model basically aims to ensure farmers do not make less than 30 to 40 per cent of their cost of production.
“We want to come up with a pricing model where the farmer is happy and wealthy, so as the processor and the retailer in NZ is happy,” Mr Lal said.
“We have to work out the cost of production for the farmer and put on a gross margin – the model we are trying to develop is that he must not make less than 30 or 40 per cent of his cost of production.
“For example if his cost of production is $1 he must sell it to us for $1.30.
“This will protect the interests of everyone involved and the market as well.”
Ministry of Agriculture permanent secretary Colonel Mason Smith said production levels for both dalo and cassava had increased a lot.
“We have been successful with planting, now we must try and assist those at the marketing end of the equation and that is where the council will play a major role – so they are meeting to try and agree on a price for dalo and cassava,” Mr Smith said.
“At the moment the freight on board price for a 20kg bag leaving Suva for New Zealand or Australia is $22 and the view is that it is not a profitable price either for the farmer, exporter or the processor and the recommendation or the figures that have been handed around is perhaps the price should be about $28 – $30 for a 20kg bag and if they can agree to a pricing formula we will then make a formal announcement.”
The new pricing formula supports the achievement of Pillar 8 of the Peoples Charter for Change Peace and Progress which is reducing poverty to a negligible level by 2015.
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