Agricultural marketing

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Market display in China

Agricultural marketing covers the services involved in moving an agricultural product

from the farm to the consumer. These services involve the planning, organizing,
directing and handling of agricultural produce in such a way as to satisfy farmers,
intermediaries and consumers. Numerous interconnected activities are involved in doing
this, such as planning production, growing and harvesting, grading, packing and
packaging, transport, storage, agro- and food processing, provision of market
information, distribution, advertising and sale. Effectively, the term encompasses the
entire range of supply chain operations for agricultural products, whether conducted
through ad hoc sales or through a more integrated chain, such as one involving contract
farming.

Contents

 1Agricultural marketing development

o 1.1Agricultural Market infrastructure
o 1.2Market information
o 1.3Marketing training
o 1.4Enabling environments
o 1.5Agricultural marketing support
o 1.6Recent developments
 2See also
 3References
 4External links

Agricultural marketing development[edit]

Congestion at a market in Abidjan

A typical market in Africa

Efforts to develop agricultural marketing have, particularly in developing countries,

tended to concentrate on a number of areas, specifically infrastructure development;
information provision; training of farmers and traders in marketing and post-harvest
issues; and support to the development of an appropriate policy environment. In the
past, efforts were made to develop government-run marketing bodies but these have
tended to become less prominent over the years. [1]
Agricultural Market infrastructure[edit]
Efficient marketing infrastructure such as wholesale, retail and assembly markets
and storage facilities is essential for cost-effective marketing, to minimize post-harvest
losses and to reduce health risks. Markets play an important role in rural development,
income generation, food security, and developing rural-market linkages. Experience
shows that planners need to be aware of how to design markets that meet a
community's social and economic needs and how to choose a suitable site for a new
market. In many cases sites are chosen that are inappropriate and result in under-use
or even no use of the infrastructure constructed. It is also not sufficient just to build a
market: attention needs to be paid to how that market will be managed, operated and
maintained.[2][3]
Rural assembly markets are located in production areas and primarily serve as places
where farmers can meet with traders to sell their products. These may be occasional
(perhaps weekly) markets, such as haat bazaars in India and Nepal, or permanent.
[2]
 Terminal wholesale markets are located in major metropolitan areas, where produce is
finally channelled to consumers through trade between wholesalers and retailers,
caterers, etc.[4] The characteristics of wholesale markets have changed considerably as
retailing changes in response to urban growth, the increasing role of supermarkets and
increased consumer spending capacity. These changes may require responses in the
way in which traditional wholesale markets are organized and managed. [5]
Retail marketing systems in western countries have broadly evolved from traditional
street markets through to the modern hypermarket or out-of-town shopping center. In
developing countries, there remains scope to improve agricultural marketing by
constructing new retail markets, despite the growth of supermarkets, although
municipalities often view markets primarily as sources of revenue rather than
infrastructure requiring development. Effective regulation of markets is essential. Inside
a market, both hygiene rules and revenue collection activities have to be enforced. Of
equal importance, however, is the maintenance of order outside the market. Licensed
traders in a market will not be willing to cooperate in raising standards if they face
competition from unlicensed operators outside who do not pay any of the costs involved
in providing a proper service.[6]
Market information[edit]
Main article: Market information systems
Efficient market information can be shown to have positive benefits for farmers and
traders. Up-to-date information on prices and other market factors enables farmers to
negotiate with traders and also facilitates spatial distribution of products from rural areas
to towns and between markets.[7] Most governments in developing countries have tried
to provide market information services to farmers, but these have tended to experience
problems of sustainability. Moreover, even when they function, the service provided is
often insufficient to allow commercial decisions to be made because of time lags
between data collection and dissemination. [8] Modern communications technologies
open up the possibility for market information services to improve information delivery
through SMS on cell phones and the rapid growth of FM radio stations in many
developing countries offers the possibility of more localised information services. In the
longer run, the internet may become an effective way of delivering information to
farmers. However, problems associated with the cost and accuracy of data collection
still remain to be addressed. Even when they have access to market information,
farmers often require assistance in interpreting that information. For example, the
market price quoted on the radio may refer to a wholesale selling price and farmers may
have difficulty in translating this into a realistic price at their local assembly market.
[9]
 Various attempts have been made in developing countries to introduce commercial
market information services but these have largely been targeted at traders, commercial
farmers or exporters. It is not easy to see how small, poor farmers can generate
sufficient income for a commercial service to be profitable although in India a new
service introduced by Thomson Reuters was reportedly used by over 100,000 farmers
in its first year of operation. Esoko in West Africa attempts to subsidize the cost of such
services to farmers by charging access to a more advanced feature set of mobile-based
tools to businesses.
Marketing training[edit]
Farmers frequently consider marketing as being their major problem. However, while
they are able to identify such problems as poor prices, lack of transport and high post-
harvest losses, they are often poorly equipped to identify potential solutions. Successful
marketing requires learning new skills, new techniques and new ways of obtaining
information. Extension officers working with ministries of agriculture or NGOs are often
well-trained in agricultural production techniques but usually lack knowledge of
marketing or post-harvest handling.[10]
Enabling environments[edit]
Agricultural marketing needs to be conducted within a supportive policy, legal,
institutional, macro-economic, infrastructural and bureaucratic environment. Traders
and others are generally reluctant to make investments in an uncertain policy climate,
such as those that restrict imports and exports or internal produce movement.
Businesses have difficulty functioning when their trading activities are hampered by
excessive bureaucracy. Inappropriate law can distort and reduce the efficiency of the
market, increase the costs of doing business and retard the development of a
competitive private sector. Poor support institutions, such as agricultural
extension services, municipalities that operate markets inefficiently and inadequate
export promotion bodies, can be particularly damaging. Poor roads increase the cost of
doing business, reduce payments to farmers and increase prices to consumers.
Finally, corruption can increase the transaction costs faced by those in the marketing
chain.
Agricultural marketing support[edit]
Most governments have at some stage made efforts to promote agricultural marketing
improvements. In the United States the Agricultural Marketing Service (AMS) is a
division of USDA and has programs that provide testing, support standardization and
grading and offer market news services. AMS oversees marketing agreements and
orders research and promotion programs. It also purchases commodities for federal
food programs. USDA also provides support to agricultural marketing work at various
universities. In the United Kingdom, support for marketing of some commodities was
provided before and after the Second World War by boards such as the  Milk Marketing
Board and the Egg Marketing Board. These boards were closed down in the 1970s. As
a colonial power, Britain established marketing boards in many countries, particularly in
Africa. Some continue to exist although many were closed at the time of the introduction
of structural adjustment measures in the 1990s.
Several developing countries have established government-sponsored marketing or
agribusiness units. South Africa, for example, started the National Agricultural Marketing
Council (NAMC) as a response to the deregulation of the agriculture industry and
closure of marketing boards in the country. India has the long-established National
Institute of Agricultural Marketing. These are primarily research and policy
organizations, but other agencies provide facilitating services for marketing channels,
such as the provision of infrastructure, market information and documentation support.
Examples from the Caribbean include the National Agricultural Marketing Development
Corporation (NAMDEVCO) in Trinidad and Tobago and the New Guyana Marketing
Corporation in Guyana.
Recent developments[edit]
New marketing linkages between agribusiness, large retailers and farmers are gradually
being developed, e.g. through contract farming, group marketing and other forms
of collective action.[11] Donors and NGOs are paying increasing attention to ways of
promoting direct linkages between farmers and buyers [12] within a value chain context.
More attention is now being paid to the development of regional markets (e.g. East
Africa) and to structured trading systems that should facilitate such developments. [13] The
growth of supermarkets, particularly in Latin America and East and South East Asia, is
having a significant impact on marketing channels for horticultural, dairy and livestock
products.[14] Nevertheless, “spot” markets will continue to be important for many years,
necessitating attention to infrastructure improvement such as for retail and wholesale
markets.

See also[edit]
 Agricultural value chain
 Food marketing
 Wholesale marketing of food

References[edit]
1. ^ Abbott, John Cave; Food and Agriculture Organization of the United
Nations (1986). Marketing Improvement in the Developing World: What
Happens and what We Have Learned. Food & Agriculture Org.
pp.  3–. ISBN 978-92-5-101427-1.
2. ^ Jump up to:a b Tracey-White, John (2003).  "Planning and Designing Rural
Markets". Rome: Food And Agrilculture Organization Of The United
Nations.
3. ^ Marocchino, Cecilia (2009). "A guide to upgrading rural agricultural
retail markets"  (PDF). Rome: Food And Agrilculture Organization Of The
United Nations.
4. ^ Tracey-White John. "Wholesale markets: Planning and Design
Manual". Rome: FAO. Retrieved 19 April  2017.
5. ^ Reardon T.; Timmer P.; Berdegue J. "The Rapid Rise of Supermarkets
in Developing Countries: Induced Organizational, Institutional, and
Technological Change in Agrifood Systems"  (PDF). electronic Journal of
Agricultural and Development Economics. Retrieved 19 April  2017.
6. ^ Tracey-White, J. [1] Retail markets planning guide. FAO, Rome, 1995.
7. ^ Aparajita Goyal [2], Information, Direct Access to Farmers, and Rural
Market Performance in Central India, July 2010
8. ^ Andrew W. Shepherd [3], Market information services – Theory and
Practice. FAO, Rome, 1997
9. ^ Andrew W. Shepherd [4], Understanding and Using Market Information.
FAO, Rome, 2000
10. ^ Grahame Dixie [5] Horticultural Marketing, Marketing Extension Guide
5, FAO, Rome, 2007.
 11. ^ Helen Markelova and Ruth Meinzen-Dick "Archived copy"  (PDF).
Archived from  the original  (PDF)  on 2010-07-16. Retrieved  2009-01-
15.Collective action and market access for smallholders: A summary of
findings. CAPRi/IFPRI 2007
12. ^ Andrew W. Shepherd [6] Approaches to linking producers to markets.
FAO, Rome, 2007
13. ^ CTA and EAGC.  "Structured grain trading systems in Africa"  (PDF).
CTA. Retrieved 27 February 2014.
14. ^ Reardon, T., C.P. Timmer, C.B. Barrett, J. Berdegue. “The Rise of
Supermarkets in Africa, Asia, and Latin America,” American Journal of
Agricultural Economics, 85 (5), December 2003: 1140-1146.

External links[edit]
 Esoko (TradeNet) market information service for West Africa
 Regional Agricultural Trade Intelligence Network for East
Africa
 Agricultural and Food Marketing Association of Asia and the
Pacific (AFMA)
 Rural Finance Investment and Learning Centre
Categories: 
 Agricultural marketing
 Food industry
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