Pepper costs €2 in stores but farmers get just 10 cents

Pepper sold for €2, paid just 10 cents

A farmer highlights the stark reality: he receives 10 cents per kilo for peppers that cost €0.50 to leave the farm and sell for €2 in supermarkets. This claim, reported by Noticias Trabajo, has ignited a discussion beyond just pepper prices, focusing on who captures the margin and why no parallel business exists if profits are so high.

Skepticism initially targets the farmer himself. If the business is so profitable, why not become an intermediary? The recurring answer involves hidden costs: transport, cold storage, shrinkage, staff, permits, and logistics. A detailed breakdown suggests the margin evaporates before reaching the supermarket. The result is not a conspiracy but a value chain where each link takes its share.

Why don’t farmers sell directly to consumers?

The question seems obvious, but the answer is complex. Direct sales require reverse logistics, licensed points of sale, staff, loss absorption, and civil liability. Those who try face sanitary bureaucracy, traceability, and individual packaging. According to various analyses, it is more profitable to sell cheaply in bulk to wholesalers than to handle retail details.

Some recall success stories: a melon seller buying directly from farmers and reselling in villages at three for €2, earning €4,000 monthly. This anecdote proves short channels work but raises questions about why they aren’t generalized. The answer remains: volume, permits, and time.

The myth of intermediaries profiting without adding value

Debate splits here. Some argue intermediaries are commissionaries adding no value, while others counter that transporters, distributors, and retailers provide services they charge for. If not, let farmers sell at 10 cents and consumers buy happily without anyone stealing along the way.

This argument is reinforced by uncomfortable data. A participant claims supermarkets declare margins between 2% and 5%, a figure repeated to debunk the idea of exorbitant profits. They live on volume, not margin. If the business were so lucrative, more intermediaries would appear, driving prices down. It doesn’t happen. Something is wrong with the math.

Subsidies, CAP, and farmers hiding their numbers

The other side of the debate involves public aid. Farmers are criticized for not disclosing CAP payments or diesel subsidies. The response is that not all producers receive the same aid, and some see no euro in subsidies. The discussion shifts to whether Spanish agriculture is a privileged or abandoned sector, with no consensus.

Another surprising fact: some Spanish products sell cheaper in Germany than in Spain. The explanation is logistics. Transport costs within Germany are lower, cold chains break less due to climate, and shrinkage is lower. The cost of shipping from Spain to Central Europe is negligible per unit compared to what is assumed. The final store sets the difference, not the truck.

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With these margins, anyone would start a cooperative and bypass intermediaries. Some have tried. Most return to selling to wholesalers. Peppers remain at 10 cents at origin and €2 on shelves, with the difference still having no clear owner.