What is the Dangerous Role of Middle Man in Businesses in the Countries with Bad Governance

The Role of middle man in trade in  Asian countries including Pakistan has taken the shape of Mafias. In normal situation when they do not hoard particular trade items like vegetables, fruit, rice, wheat or flour and fertilizers e.t.c, their high profit margins increase the prices of these commodities nearly 100 percent. It means  farmers get low prices of their produce and the end consumers  get the necessities inclusive of food items at soaring prices. The result is inflation and more and more people are being driven below the poverty line. The Mafias of middle men are accumulating wealth without paying taxes  to the government. Even this group of traders, shopkeepers and brokers don't let the governments  take steps towards the documentation  of their businesses with the result that tax collection and tax  net is not broadened. Take the example of paddy crop. The government in Pakistan neither purchases it directly from the farmers nor fixes its support price. Consequently, the big merchants and husking mill owners purchase paddy at low price through "gentleman's agreement" and make money by storing rice and selling the old rice at high price. It is estimated that by-products of husking of rice are sufficient  to meet their cost of turning paddy into white rice. What is stressed here is that  the grower gets hardly any profit and the end consumers get the commodity (rice) at high price. But the middle man earns profit  at the cost of   growers and consumers. The Same is the case with the crop of sugarcane and sugar industry, with the crop of cotton and textile industry, with the crop of other oil seeds and manufacturers of ghee. These Mafias of industrialists and merchants are so powerful that they even may create artificial shortage of the necessary  items to increase their prices. Recent example of urea fertilizers in Pakistan for the cultivation of wheat crop is another manifestation of power of Mafia in action. This fertilizer is locally made and brokers and agency holders are exploiting the Poor farmers by selling it at 50% high prices. This sad story is not going to end here. The importers and distributors of different pharmaceutical items and life-saving  drugs are earning 400% profit by purchasing doctors and officials of health ministries  in countries like Pakistan. Where governance  is poor and the politicians in power and in opposition are directly or indirectly part of this game. Real estate business is another source of making the people poor and taking the houses away from the reach of the poor. Here the middle man purchases the land at cheap rates by acres and sell it in feet at 1000 times high prices. The situation stands further aggravated when the government officials, politicians, members of judiciary and lawyers fall at the payroll of these Mafias. In Third World countries like Pakistan, these mafias have become a risk for the existence of the people and for the existence of the country. They are the strongest cause of inflation, poor revenue collection,  poor law and order situation because of harboring of criminal gangs, occupation groups deceits and murderers. In developed countries with good governance, rule of law and Awareness of the people of their rights and in letter and spirit implementation of rule of conflict of interests  have not let such Mafias develop to the extent of proving detrimental  to the  existence  of the society and the country. But what remedy  in developing countries like Pakistan may be suggested to ameliorate the predicament. In order to provide  cheap food items, the farmers should be guided and encouraged to disentangle themselves from the clutches of middle man. They should establish their own shops and put vegetable and fruit along the roads near to them and sell directly to the people. In the same way, farmers should turn wheat into flour by establishing small grinder machines and then sell to the  people. In the same way, farmers should make raw sugar from sugar cane and extract oil from seeds and sell it directly to the people without taking it to central markets where commission agents and merchants exploit them.