So God Made A Farmer

[Beskar]

Farmers make less on their crops than the brokers who sell them on.

There's the issue! It is why things like "Fair-Trade" exists.

[HoreTore]

There's the issue! It is why things like "Fair-Trade" exists.

That's not an issue, that's a fundamental aspect of how markets can and do operate. It goes something like this:

Farmer Joe wants to grow and sell some wheat. In order to get to the stage wherehehas wheat to sell, he will have paid for three things:

1. Landrate, what the farmer pays for using land. This may or may not be something the individual farmer actually pays for, but it's always factored into the price.
2. Capital, things like machinery, seeds, etc.
3. His own wage. Obviously.

When all that's paid for, Farmer Joe will also factor in the standard return rate on capital investments for his area. If he didn't, he would put his capital into other businesses, wouldn't he?

Now let's move on to John the Miller. He will buy Farmer Joe's wheat, with the intention of selling the flour. He too pays for the same three things:

1. Landrate, meaning his mill.
2. The capital needed to buy the wheat from Farmer Joe.
3. His own wage.

And he too will add the standard return on capital investments to the total price before selling the flour. Now, while this rate will be the same percentage, its value in dollars will be higher, since he must have investmented more capital into his business. That's because his invested capital covers all of Farmer Joe's investments and earnings.

Thus, the closer you are to to customer, the more you will earn from your business. This explains why material-rich africa is so much poorer than production-rich Europe, China and the US.


Finally, I'd like to call my bluff on Sarmatian: we do have an advantage over others when it comes to fishfarming. Wages are an irrelevant cost in that business, the biggest expenditure is food. And we happen to have a fertilizer giant in Yara...