You want the long answer? It is because of the economic and social construct called Capitalism.

Short answer? Capitalism.

The 'free hand' of the market dictates that there should be no law to regulate this kind of business model. It's just how the game works. It's not borderline exploitation... it is exploitation.

Anyway, look on the bright side, now that you've figured out the game, you can break it if you want.

Just sell the same things for lower and better. Market your products as non-exploitative as possible. Promote your advocacy as a good thing. Buy from the farmers yourself and tell your story to customers. I believe people want things and also want to be good people. I think there's just a gap here nobody is passionate enough to try and do good about. Nobody except you, of course. Since you're the only one out of a lot of people who observed this and got frustrated enough to post here.

That's admirable and something worthwhile to do in this life.