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Agricultural marketing covers the services involved in moving an
agricultural Agriculture or farming is the practice of cultivating Plant, plants and livestock. Agriculture was the key development in the rise of Sedentism, sedentary human civilization, whereby farming of Domestication, domesticated species created food ...
product from the
farm A farm (also called an agricultural holding) is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production. The name is used fo ...
to the
consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
. 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 Harvesting is the process of gathering a ripe crop from the fields. Reaping is the cutting of grain or pulse for harvest, typically using a scythe, sickle, or reaper. On smaller farms with minimal mechanization, harvesting is the most labor-i ...
, grading, packing and packaging, transport, storage, agro- and
food processing Food processing is the transformation of agricultural products into food, or of one form of food into other forms. Food processing includes many forms of processing foods, from grinding grain to make raw flour to home cooking to complex industr ...
, provision of
market information Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer (existing, lost and targeted) monitoring. It is a subtype of competitive intelligence (CI), which is data and infor ...
,
distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...
,
advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
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 Contract farming involves agricultural production being carried out on the basis of an agreement between the buyer and farm producers. Sometimes it involves the buyer specifying the quality required and the price, with the farmer agreeing to deliv ...
.


Agricultural marketing development

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


Agricultural Market infrastructure

Efficient marketing infrastructure such as
wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...
, 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 Rural development is the process of improving the quality life and economic well-being of people living in rural areas, often relatively isolated and sparsely populated areas. Rural development has traditionally centered on the exploitation of l ...
, income generation,
food security Food security speaks to the availability of food in a country (or geography) and the ability of individuals within that country (geography) to access, afford, and source adequate foodstuffs. According to the United Nations' Committee on World F ...
, 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. 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. Terminal wholesale markets are located in major metropolitan areas, where produce is finally channelled to consumers through trade between wholesalers and retailers, caterers, etc. The characteristics of
wholesale markets The consumption and production of marketed food are spatially separated. Production is primarily in rural areas while consumption is mainly in urban areas. Agricultural marketing is the process that overcomes this separation, allowing produce to b ...
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. 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.


Market information

Efficient
market information Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer (existing, lost and targeted) monitoring. It is a subtype of competitive intelligence (CI), which is data and infor ...
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. 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. Modern communications technologies open up the possibility for market information services to improve information delivery through
SMS Short Message/Messaging Service, commonly abbreviated as SMS, is a text messaging service component of most telephone, Internet and mobile device systems. It uses standardized communication protocols that let mobile devices exchange short text ...
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. 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 Thomson Reuters Corporation ( ) is a Canadian multinational media conglomerate. The company was founded in Toronto, Ontario, Canada, where it is headquartered at the Bay Adelaide Centre. Thomson Reuters was created by the Thomson Corpora ...
was reportedly used by over 100,000 farmers in its first year of operation.
Esoko Esoko is an online agricultural marketing and messaging service, based in Accra, Ghana. The service sends out market data and other information to individuals, agribusiness, government agencies, projects by text messaging, and also gives pers ...
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.


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 Agricultural extension is the application of scientific research and new knowledge to agricultural practices through farmer education. The field of 'extension' now encompasses a wider range of communication and learning activities organized for r ...
services,
municipalities A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the go ...
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 Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
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 The Agricultural Marketing Service (AMS) is an agency of the United States Department of Agriculture; it maintains programs in five commodity areas: cotton and tobacco; dairy; fruit and vegetable; livestock and seed; and poultry. These programs ...
(AMS) is a division of
USDA The United States Department of Agriculture (USDA) is the federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It aims to meet the needs of com ...
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 The Milk Marketing Board was a producer-run product marketing board, established by the Agricultural Marketing Act 1933, to control milk production and distribution in the United Kingdom. It functioned as buyer of last resort in the milk market in ...
and the
Egg Marketing Board The Egg Marketing Board was an agricultural marketing organization set up by the British government in December 1956 to stabilise the market for eggs due to a widespread collapse in sales. The Board purchased all the eggs produced in the UK, graded ...
. These boards were closed down in the 1970s. As a colonial power, Britain established
marketing board A marketing board is an organization created by many producers to try to market their product and increase consumption and thus prices. It can also be defined as an organization set up by a government to regulate the buying and selling of a certain ...
s 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 National Institute of Agricultural Marketing (NIAM), or in its full name Chaudhary Charan Singh National Institute of Agricultural Marketing (CCS NIAM), is a research and higher-education institute operating under the Ministry of Agriculture ...
. 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, in
Trinidad and Tobago Trinidad and Tobago (, ), officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean. Consisting of the main islands Trinidad and Tobago, and numerous much smaller islands, it is situated south of ...
and the New Guyana Marketing Corporation in
Guyana Guyana ( or ), officially the Cooperative Republic of Guyana, is a country on the northern mainland of South America. Guyana is an indigenous word which means "Land of Many Waters". The capital city is Georgetown. Guyana is bordered by the ...
.


Recent developments

New marketing linkages between
agribusiness Agribusiness is the industry, enterprises, and the field of study of value chains in agriculture and in the bio-economy, in which case it is also called bio-business or bio-enterprise. The primary goal of agribusiness is to maximize profit w ...
, large retailers and farmers are gradually being developed, e.g. through
contract farming Contract farming involves agricultural production being carried out on the basis of an agreement between the buyer and farm producers. Sometimes it involves the buyer specifying the quality required and the price, with the farmer agreeing to deliv ...
, group marketing and other forms of
collective action Collective action refers to action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. It is a term that has formulations and theories in many areas of the social sciences including psych ...
. Donors and NGOs are paying increasing attention to ways of promoting direct linkages between farmers and buyers 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. The growth of
supermarkets A supermarket is a self-service shop offering a wide variety of food, beverages and household products, organized into sections. This kind of store is larger and has a wider selection than earlier grocery stores, but is smaller and more limit ...
, particularly in Latin America and East and South East Asia, is having a significant impact on marketing channels for horticultural, dairy and livestock products.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. Nevertheless, “spot” markets will continue to be important for many years, necessitating attention to infrastructure improvement such as for retail and
wholesale markets The consumption and production of marketed food are spatially separated. Production is primarily in rural areas while consumption is mainly in urban areas. Agricultural marketing is the process that overcomes this separation, allowing produce to b ...
.


See also

*
Agricultural value chain Agricultural value chain is the integrated range of goods and services (value chain) necessary for an agricultural product to move from the producer to the final consumer. The concept has been used since the beginning of the millennium, primarily b ...
*
Food marketing Food marketing brings together the food producer and the consumer through a chain of marketing activities. Background Pomeranz & Adler, 2015, defines food marketing as a chain of marketing activities that takes place within the food system ...
*
Wholesale marketing of food The consumption and production of marketed food are spatially separated. Production is primarily in rural areas while consumption is mainly in urban areas. Agricultural marketing is the process that overcomes this separation, allowing produce to b ...


References

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External links


Esoko (TradeNet) market information service for West AfricaRegional Agricultural Trade Intelligence Network for East AfricaAgricultural and Food Marketing Association of Asia and the Pacific (AFMA)Rural Finance Investment and Learning CentreMarketing, Alternative Farming Systems Information Center, National Agricultural Library (NAL)
Food industry