Agricultural

marketing

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.

Market display in China

Agricultural marketing development

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

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

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

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

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

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),[11] 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, [12] in Trinidad and Tobago and the New Guyana
Marketing Corporation in Guyana.[13]

Recent developments

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.[14] Donors and NGOs
are paying increasing attention to ways of promoting direct linkages between farmers and buyers[15] 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.[16] 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.[17] 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

Agricultural value chain

Food marketing

Wholesale marketing of food

References
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 (https://books.google.com/books?id=F-1I-W3lvIsC&p
g=PA3) . Food & Agriculture Org. pp. 3–. ISBN 978-92-5-101427-1.

2. Tracey-White, John (2003). "Planning and Designing Rural Markets" (http://www.fao.org/3/a-y4851e.HTM) .

Rome: Food And Agrilculture Organization Of The United Nations.

3. Marocchino, Cecilia (2009). "A guide to upgrading rural agricultural retail markets" (http://www.fao.org/fileadmin/
user_upload/ags/publications/AGSF_WD_24.pdf) (PDF). Rome: Food And Agrilculture Organization Of The United
Nations.

4. Tracey-White John. "Wholesale markets: Planning and Design Manual" (http://www.fao.org/docrep/t0521e/t0521e0

0.htm) . 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" (https://core.ac.uk/download/pdf/6557
502.pdf) (PDF). electronic Journal of Agricultural and Development Economics. Retrieved 19 April 2017.

6. Tracey-White, J (1995). "Retail markets planning guide" (http://www.fao.org/docrep/V8390E/V8390E00.htm) .

FAO, Rome.

7. Goyal, Aparajita (July 2010). "Information, Direct Access to Farmers, and Rural Market Performance in Central India"
(http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3) .

8. Shepherd, Andrew W (1997). "Market information services – Theory and Practice" (http://www.fao.org/3/a-x69
93e.pdf) (PDF). FAO, Rome.

9. Shepherd, Andrew W (2000). "Understanding and Using Market Information" (http://www.fao.org/3/a-x8826e.p

df) (PDF). FAO, Rome.

10. Dixie, Grahame (2007). "Horticultural Marketing, Marketing Extension Guide 5" (https://www.share4dev.info/ffsne
t/documents/3628.pdf) (PDF). FAO, Rome.

11. "National Agricultural Marketing Council (NAMC)" (http://www.namc.co.za/) .

12. National Agricultural Marketing Development Corporation (NAMDEVCO) (http://www.namdevco.com/)

13. "New Guyana Marketing Corporation" (http://www.newgmc.com/) .

14. Helen Markelova and Ruth Meinzen-Dick "Collective action and market access for smallholders: A summary of findings"
(https://web.archive.org/web/20100716224158/http://www.capri.cgiar.org/pdf/CA-Market_WksReport.pdf)
(PDF). Archived from the original (http://www.capri.cgiar.org/pdf/CA-Market_WksReport.pdf) (PDF) on
2010-07-16. Retrieved 2009-01-15. CAPRi/IFPRI 2007

15. Shepherd, Andrew W (2007). "Approaches to linking producers to markets" (http://www.fao.org/3/a-a1123e.pd

f) (PDF). FAO, Rome.

16. CTA and EAGC. "Structured grain trading systems in Africa" (http://publications.cta.int/media/publications/download
s/1749_PDF.pdf) (PDF). CTA. Retrieved 27 February 2014.

17. 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

Esoko (TradeNet) market information service for West Africa (http://www.esoko.com/)

Regional Agricultural Trade Intelligence Network for East Africa (http://www.ratin.net/)

Agricultural and Food Marketing Association of Asia and the Pacific (AFMA) (http://www.afmaasia.org/)

Rural Finance Investment and Learning Centre (http://www.ruralfinanceandinvestment.org/)

Marketing, Alternative Farming Systems Information Center, National Agricultural Library (NAL) (http
s://www.nal.usda.gov/afsic/marketing-0)

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Last edited 8 months ago by MrOllie