The farm gate value of a cultivated product in
agriculture
Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people t ...
and
aquaculture
is the
market value of a product minus the selling costs (transport costs, marketing costs).
The market value is not the same as the price farmers get for their product, as (if an
auction
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition ex ...
is used), the value they get per weight may be well below the market price. In some cases, the value they get per weight may even be below the
breakeven price.
When selling by auction, the price the farmers get for their product is typically lower than the price they get if they sell directly to the consumer (as they are able to set this price themselves).
Farms that Sell Directly to Consumers May Stay in Business Longer
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The farm gate value is also far lower than the retail price consumers pay in a store as it does not include the additional costs the store makes (shipping, handling, storage, marketing) nor the profit margin the involved companies ask.
References
Definition according to the OECD Glossary of Statistical Terms
Agricultural economics
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