Define the Food Pricing?

The pricing of the food products bought by the consumer is subject to multifarious factors. Each of the factors as discussed below can affect the pricing both in the interest of the consumer and against it, An overview of these factors will help one understand the umpteen tasks faced by the policy makers in achieving at a decision which will be in the best interest of the consumer, as well as, will help in positively towards the burden of the malnutrition in the community. The costs of storage, transportation, processing- which are known as the marketing transformations - are an integral component of food price formation. The storage at the non-harvest season can increase the prices due to logistic reasons or due to the wish of the storage-marketer to look for some gains during the non-harvest season. The transportation costs may rise with the increase of the distance between the production point and the final consumer. Also, poor conditions of the roads and communication will contribute into the increase of the price. Processing, e.g. the milling of the rice before selling it to the consumer will increase the price, but then consumer also prefer it more as compared to the raw unmilled rice directly from the farm. Seasonality by virtue of the harvest and the non-harvest seasons will affect the pricing. Pricing will increase with the demand, e.g. local food habits will determine the pricing of a grain in respect to its acceptability in the local population.

Increasing the prices of the seeds, fertilizers, pesticides, and other farm related equipments will increase the pieces of the grain but at the same time these things if are under subsidy from the government, can help in decreasing the prices. Markets do not always function in the best interests of a broad cross section of society. Highly unequal financial bargaining power is often brought to the exchange relationship between seller and buyer. In the absence of any price regulatory body, all the middlemen involved right from the level of the production to the level of the consumption may have a wishful interest in the pricing. Thus, more is the number of the middlemen in the path, more the prices will increase. A shortage of food means high prices in a market economy, with only the well-to-do able to purchase it. A food shortage in a socialist economy means rationing, with perhaps little choice about what the poor can eat. Competition and the number of market participants affect the logic of decision-making behaviour for competition to be effective, however, there must be an adequate number of participants on both sides of the exchange relationship so that no single agent can significantly influence the outcome of the exchange. Farmer's range of choice at the initial point of sale is the first step in understanding how competitive price formation is likely to be. The more agents there are competing to buy the farmer's grain, the better the information available to the farmer about the prevailing price and the easier it is to switch from one buyer to another whose terms are relatively better. At the opposite end of the marketing chain, where consumers buy foods if many alternative retail stalls offer similar commodities and services, the freedom of consumers to choose one retailer over another prevents excess profits from high margins accruing Lo the retail-marketing agents. Government induced subsidy directly to a commodity will help in decreasing the prices. International markets affect the prices in an intricate way. Actually the domestic markets are in an effect only a networking between the various international markets, so it is not astonishing to find the price getting affected as a result of the international price correlation. The cost of the labour involved at every stage will increase the prices. Tax levied by the government will also increase the prices. Thus, we see that there are many factors, which influence the price of the food commodities. Food commodities available at affordable prices by the poor can go a long way to improve the food security of vulnerable population and thus help improving their dietary intakes. In the above section, we studied about economics of health and nutrition. We looked at various health and food resources required to improve nutritional status of population. We also analyzed various economic consequences of malnutrition. Now we will review how we can efficiently plan and allocate these limited resources to alleviate the large problem of malnutrition.