Marketing of Agricultural produce

MEANING OF AGRICULTURAL MARKETING

Agricultural marketing are the activities involved in the flow of goods and services from the producers (farmers) to the final consumers.

In other words, agricultural marketing involves all the activities required to move farm produce form the producers (farmers) to the final consumers.

Marketing also include the selling of  farm input to farmer or purchasing of farm input, e.g. seeds, fertilizers and disposal of agricultural produce to the final consumers or users.

IMPROTANCE OF AGRICULTRUAL MARKETING

1. Marketing help to make products available throughout the year.
2. It creates employment opportunity for many people.

• It locates where there are surpluses of produce and brings them to where there are shortages.

1. Export of agricultural products provided foreign exchange (income) to the nation.
2. It helps in price determination
3. It enables producer to know the taste of the consumers

• It helps in the provision of infrastructure such as roads, electricity, pipe-borne water, e.t.c.

CHANNELS OF MARKETING FARM PRODUCE

Channels of marketing farm produce refers to all the linkage or pathways through which farm produce have to pass through before they get to the final consumers.  These marketing channels include:

1. THE LOCAL MARKET: A market is a place where sellers and buyers are in close contact.  Products brought to the market by the sellers (producers) are sold to the buyer (consumers).
2. COOPERATIVE SOCIETIES: Co-operative societies buy goods in large quantities and make them available to their member and other consumers for sales at reduced prices.
3. MIDDLEMEN: middlemen like the wholesaler and retailer form a link which buys goods from the producers (farmers) and sells to the consumers
4. COMMISSIONED AGENTS: These agents buy goods or produce from peasant farmers and sell to marketing boards or exporters.
5. EXPORTER: Exporters buy produce from commissioned agents or big time farmers and export the produce to overseas’ buyers or consumers.

FUNCTIONS OF MARKETING OR STAGES OF AGRICULTURAL MARKETING

The stages involved in the marketing of agricultural produce include:

1. FARM LEVEL PROCESSING: This involves the local processing of farm produce immediately after harvesting in readiness for sale.
2. GRADING OR SORTING: This involves the grouping of produce into various weights and sizes for easy handling.
3. PACKAGING: This refers to the loading of produce into various packs in readiness for storages.  Sacks, drums or tins may be used as packaging materials
4. STORAGE OR WAREHOUSING: This involves the storage of produce before sales or export
5. TRANSPORTATION: This involves the movement of produce from warehouse to the market or ports for export
6. ADVERTISEMENT: This involves the process of making of produce known (creation of awareness) either through radio, newspaper, television, etc.
7. MERCHANDIZING: This involves the export of the farm produce through the ports to other countries.
8. ASSEMBLAGE: This is the re-gathering of various produce brought from different sources.  In other words, it may involve the repackaging of produce in readiness for final consumption.

HOW AGRICULTURAL MARKETING CAN BE ENCOURAGED

Marketing may be encouraged through the provision of:

1. Good roads
2. Capital or finance

• Standard units of measurement

1. Adequate market infrastructures
2. Storage facilities
3. Market research

• Good government policies

AGENTS OF AGRICULTURAL MARKETING

Agents of marketing include all the people and other bodies which are directly or indirectly involved in the marketing of farm produce.  These agents include:

1. Marketing/commodity boards
2. Producer/farmers
3. Cooperative societies
4. Wholesalers/distributors
5. Individual/private middlemen

MARKETING/COMMODITY BOARDS

These are public corporations set up by government to handle the sales of agricultural produce.

ADVANTAGES OF MARKETING/COMMODITY BOARDS

1. The boards provide an organized and ready market for various agricultural commodities
2. It helps to stabilize prices of farm produce

• The board sometimes provides capital to farmers

1. It advises and encourages farmers to adopt modern farming techniques
2. It helps to transport the produce of the farmers.

DISADVANTAGES OF MARKETING/COMMODITY BOARDS

1. It deals mainly on major export crops
2. It is capital intensive

• Government interferes with the running of the boards.

CO-OPERATIVE SOCIETIES

Co-operative societies are trading organizations where various entrepreneurs or members of the co-operative pool their resources together with a view to making profits through marketing of agricultural produce.

CHARACTERISTICS OF COOPERATIVE SOCIETIES

1. There is quality among members since each person has one vote
2. Each member is equally qualified for participation in the management of the society

• Dividends are shared according to the level of individual financial contribution

1. They are very useful in business when small capitals is needed
2. The welfare of members is paramount to the society e.g. settling of dispute and other social problems.
3. Membership is voluntary.

ADVANTAGES OF CO-OEPRATIVE SOCIETIES

1. They stimulate competition in produce marketing by buying produce in bulk
2. They have close contact with producers.

• They reduce the inequality of income distribution by selling to members at reduced rate

1. They provide storage facilities
2. They also provide transportation services
3. They grant loans to members.

DISADVANTAGES OF CO-OPERATIVE SOCIETIES

1. It does not always encourage individual enterprise
2. It is prone to financial misappropriation

• It is also prone to poor management due to unqualified and incompetent executive handling the co-operative societies.

INDIVIDUAL/PRIVATE MIDDLEMEN

Some individual/middle men usually go directly to the farm to buy farm produce

ADVANTAGES OF INDIVIDUAL/PRIVATE MIDDLEMEN

1. They link producers with consumers
2. They may give loans to producers

• They assemble, blend and re-pack certain goods.

1. They also provide storage facilities
2. They evacuate farm produce form the farm to the market
3. They assist in the even distribution of produce

• They bear most of the risks from end of production to marketing.

DISADVANTAGES OF INDIVIDUAL/PRIVATE MIDDLEMEN

1. They inflate the prices of commodities
2. They create artificial scarcity of goods, i.e. hoarding.

PRODUCERS/FARMERS

These are the farmers themselves who are also involved in the marketing of their produce.

ADVANTAGES

1. The farmers gets the full benefits of his effort
2. Consumers get goods at reduced price

• Produce gets to the consumers fresh

DISADVANTAGES

1. It diverts the farmer’s attention from his production activities
2. He lacks storage facilities

• He lacks transport facilities

1. Farmers may suffer increased loss of goods

WHOLESALERS

Wholesalers are the agents who buy produce in large quantities from the farmers (producers) and sell in small quantities to the retailers.

ADVANTAGES

1. They purchase produce in bulk
2. They provide storage facilities

• They have good transport facilities

1. They pass information from retailers to producers and vice versa

DISADVANTAGES

1. They exploit the producers and retailers
2. They create artificial scarcity of goods

• They inflate prices of commodities

RETAILERS

Retailers are agents who buy goods from the wholesalers and sell in small quantities to the final consumers

ADVANTAGES

1. They make produce readily available to consumers
2. They provide jobs for many people

• They pass information from the consumers to the wholesalers

1. They give credits to some consumers.

DISADVANTAGES

1. They may create artificial scarcity of goods, i.e. by hoarding.
2. They can suffer losses due to pilfering and decay of perishable goods

• They may inflate prices of commodities.

PROBLEMS OF AGRICULTURAL MARKETING

Problems associated with the marketing of farm produce include:

1. INADEQUATE TRANSPORTATION SYSTEM: Lack of vehicles and bad roads prevent easy transportation of food from rural to urban areas.
2. SMALL SCALE PRODUCTUION: Production is small scale because peasant farmers produce very little output or volume

• INADQUATE MARKET INFRASTRUCTURE: Infrastructure such as electricity, pipe-borne water, telephone, etc., which can promote good marketing are inadequate.

1. PERISHABILITY OF PRODUCE: Most of the produce such as eggs, meats, vegetable, etc., easily get damaged and this tends to pose a problem in their marketing
2. INADEQUATE STORAGE FACILITIES: Most of the produce are wasted due to lack of storage facilities
3. POOR FINANCING: Most buyers are not financially buoyant enough to handle marketing of produce due to lack of transportation storage and communication facilities

• POOR PRICES OF PRODUCE: This tends to discourage production by farmers
• PROBLEMS OF MIDDLEMEN: Middlemen hoard produce thereby creating artificial scarcity and hence inflation of prices of the produce

1. DIFFICULTY IN ASSEMBLING PRODUCTS: There is always difficulties in organizing and assembling agricultural products that are produce on small farms scattered all over the country.
2. INADEQUATE PROCESSING FACILITIES: Poor packaging and processing facilities are major problems involved in agricultural marketing.
3. LACK OF UNIFORM MEASURES: There is always lack of uniform weight and measure for produce, i.e., no standardization in measurement

• POOR QUALITY PRODUCE: Most agricultural produce are of poor quality due to contamination.
• INADEQUATE RESEARCH: There is poor or inadequate research in marketing and storage
• INADEQUATE INFORMATION: There is inadequate information about production and marketing or market intelligence.