Agricultural Marketing

Back to: AGRICULTURAL SCIENCE SS3

 

Welcome to class! 

In today’s class, we will be talking about agricultural marketing. Enjoy the class!

Agricultural Marketing

These refer to all the activities required or involved in moving farm produce from the producers to the final consumers. Production is not complete without consumption and marketing is what makes it happen.

Importance of agricultural marketing

1. Helps to make products available year-round.
2. It creates employment for people (drivers, traders, retailers etc).
3. It locates where there are surpluses of produces and brings them to where there are shortages.
4. It brings about a foreign exchange to the nation through exportation of produce.
5. It helps in price determination.
6. It enables the producers to know the taste of the consumers.
7. It initiates research into products preferred by the consumer
8. It helps in the provision of infrastructure such as roads, electricity, pipe-borne water etc.

Channels of marketing farm products

This refers to all the linkages or pathways through which farm produce pass through before they get to the final consumers. These include

1. Producers
2. Marketing board
3. Local Market
4. Middlemen
5. Co-operative societies
6. Middlemen
7. Commissioned agents
8. Exporters
9. Processor

Stages of agricultural marketing

The Stages involves in marketing agricultural produce include

1. Farm-level processing
2. Grading or sorting
3. Packaging
4. Storage or warehousing
5. Transportation
6. Advertisement
7. Merchandizing
8. Assemblage

Evaluation

1. What is agricultural marketing?
2. What is the significance of agricultural marketing
3. List and explain the stages of agricultural marketing.
4. What are the channels involved in the marketing of agricultural produce?

Marketing functions

These are activities expected of a marketer to achieve set marketing objectives. The functions are:

1. Researching
2. Buying
3. Product development and management
4. Production
5. Promotion
6. Standardization and grading
7. Pricing
8. Distribution
9. Risk bearing
10. Financing

 Agents of agricultural marketing

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

1. Marketing/commodity boards
2. Co-operative societies
3. Individual / Private Middlemen
4. Producers/farmers
5. Wholesalers
6. Retailers

Marketing/commodity boards

These are trading agencies of the government that oversee the marketing of export or cash crops. It started as marketing board and later changed to commodity boards.

Advantages of marketing/commodity boards

1. It creates employment for licensed buying agents.
2. Guarantees producers prices and ensures the production of export crops.
3. They stabilize prices and ensure that farmers are not affected by price fluctuation.
4. Encourage the processing of export produce.
5. Generate income to the government through export duties and sales taxes.
6. Contribute to providing social amenities like roads, hospitals, pipe-borne water etc.
7. Promote produce quality.
8. Encourage the production of both export and food crops.
9. They sometimes provide capital to farmers.

Disadvantages of marketing/commodity boards

1. It deals mainly on major export crops.
2. They fix prices on their own without consulting the farmers.
3. Middlemen cheat the farmers by either paying them lower prices or downgrading their produces.
4. When the world prices of produce rise, farmers are still paid the fixed prices
5. Government interferes with the running of the boards.

• Co-operative societies

They are a voluntary organization formed by a group of individuals who pool their resources together with the primary objectives of satisfying the needs and aspirations of their members.

Advantages of co-operative societies

1. Purchase commodities in bulk from the producers.
2. Bypass the middlemen, and deal directly with producers as a result, they retail commodities to the members and non-members at moderates prices.
3. Members pool individual resources together to meet the special needs of members which on an individual’s basis is difficult.
4. The profits of the co-operatives are shared among the members either according to the individual’s shareholdings or volume of purchase from the co-operative.
5. Membership is voluntary.
6. They provide storage facilities.
7. They grant a loan to members.
8. They provide transportation facilities.

Disadvantages of co-operative societies

1. Poor and ineffective management.
2. It is prone to financial misappropriation.
3. It does not encourage the establishment of individual enterprise.

• Producers

These are the farmers who produce agricultural commodities.

Advantages of producers

1. The agricultural market starts with the farmers without whom the existence of other marketing agents and consumers is meaningless
2. They produce what consumers need thereby satisfying their taste and preference.
3. Produce gets to the consumer at reduced rice.
4. Produce get to the consumer in its fresh state.

Disadvantages of producers

1. The producers through the producers co-operative may decide to produce what will attract higher income to them and not what the consumers need most.
2. They hoard and ration the supply of produce to the market to enjoy attractive prices.
3. He lacks storage facilities.
4. Farmers may suffer an increased loss of goods.
5. He lacks transportation facilities.

• Individual/private middlemen

These are individuals that come 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.
3. They assemble, blend and repack certain goods.
4. They save the producer’s time in marketing his goods.
5. They also provide storage facilities.
6. They also provide transport facilities.

Disadvantages of individual/private middlemen

1. They inflate the prices of commodities.
2. They create artificial scarcity of goods.
3. They exploit producers and consumers.

• Wholesaler

These are the agents who buy products in large quantities from the farmers (producers) and sell in small quantity to the retailers.

Advantages of wholesaler

1. They purchase produce in bulk.
2. They provide storage facilities.
3. They have good transport facilities.
4. They pass information from retailer to producers and vice versa.

Disadvantages of wholesaler

1. They exploit the producers and retailers.
2. They create artificial scarcity of goods.
3. They inflate the prices of commodities.

• Retailers

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

Advantages of retailers

1. They make products readily available and affordable to consumers.
2. They provide jobs to many people.
3. They pass information from consumers to wholesalers.
4. They give credits to some consumers.

Disadvantages of retailers

1. They may create artificial scarcity of goods
2. They may suffer losses due to theft or spoilage of perishable goods
3. They may inflate the prices of commodities.

Problems of agricultural marketing

1. Inadequate transportation system.
2. Small scale production.
3. Inadequate basic amenities.
4. Perishability of produce.
5. Inadequate storage facilities.
6. Inadequate processing facilities.
7. Poor financing.
8. Poor Prices of products.
9. Problems of middlemen.
10. Difficulty in assembling produce.

Possible solutions to problems of agricultural marketing

1. Provision of good roads.
2. Provision of finance to farmers.
3. Provision of storage and processing facilities.
4. Formation of good policies by the government.
5. Encouragement of market research.

Evaluation

1. What are the agents of marketing?
2. What are the problems of agricultural marketing?

General evaluation

1. What is agricultural marketing?
2. What is the importance of agricultural marketing?
3. List ten problems of agricultural marketing.
4. List five possible solutions to the problems of agricultural marketing.
5. What are marketing functions?
6. List and explain six marketing functions.

Reading assignment

Essential agricultural science for senior secondary school by O. A. Iwena pages 450 – 458

Answer revision questions 2 and 13 on page 458.

Weekend assignment

1. Which of the following is not an agricultural marketing agent in Nigeria? (a) Consumers (b) co-operative society (c) Producer (d) consumers
2. Establishing a specified characteristic that your product must conform to is ____ (a) sorting (b) pricing (c) standardization (d) promotion
3. ____ buys produce from farmers in the raw state and converts them to usable or consumable forms (a) Middlemen (b) Marketing board (c) Processors (d) Wholesalers
4. The disadvantage of buy produce directly from farmers is (a) the produce are usually at the freshest state (b) produce price is at the cheapest (c) produce are purchased at inflated prices if there is scarcity (d) none of the above
5. ____ enables a marketer generate adequate information about targeted market (a) Research (b) Sorting (c) Standardization (d) Promotion

Theory

1. State two advantages each of the following agricultural marketing agents. (i) commodity boards (ii) co-operative society (iii) middlemen (iv) Retailer (v) producer.
2. Explain the term marketing channel.
3. Outline and discuss channels of marketing cocoa.
4. List five ways by which marketing can be encouraged

 

In our next class, we will be talking about Routine Management Practices in Farm Animals.  We hope you enjoyed the class.

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