How are the Prices of Agricultural Products Arrived at?

There are several factors that are taken into consideration, while trying to determine the prices at which agricultural products should be sold.

The first and most obvious consideration is that of cost of production. Certain agricultural products cost more to produce than others. The ones whose costs of production are higher typically end up costing more than the ones whose costs of production are lower.

Demand and supply forces also play a key role in determining the prices of agricultural products. If the demand for a certain agricultural product is high, and the supply is low, the end result would be a higher price for that particular product. Conversely, if there is great supply for a particular agricultural product, yet the demand is low, the prices are likely to fall commensurately.

Sometimes, agricultural producers are subsidized by the government. This ends up having an impact on the prices at which the agricultural products should be sold.

Certain agricultural markets are deeply infiltrated by middlemen and cartels. These too end up having some impact on the prices at which the agricultural products are ultimately sold.

It is worth noting that the prices of agricultural products differ from one part of the world to the other, or even from one region to another within the same nation. This is understandable, because after all, even the cost of labor varies from one place to another. For instance, the paycheck that a CVS Health worker in the USA may get (after signing in at the mycvs hr login page) may be considerably higher than what a worker with similar qualifications would get in, say, India or Cambodia. Even within the USA, the hourly wage in a city like New York may be higher than the hourly wage in rural Dakota. We see similar differences in the prices of agricultural products.

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