What is agricultural marketing?
Agricultural marketing covers all the activities that move farm products from the farmer to the consumer: grading, packing, processing, storage, transport, selling and advertising. It adds place, time and form utility.
| Market function | Examples |
|---|---|
| Physical | Transport, storage, processing |
| Exchange | Buying and selling |
| Facilitating | Grading, market information, finance, risk-taking |
Marketing channels and problems
The marketing channel may be short (farmer to consumer at a market) or long (farmer, collector, wholesaler, retailer, consumer). Each person adds a margin. Marketing boards, cooperatives and warehouse receipt systems help farmers get better prices. Problems include perishability, seasonal gluts, bulky goods, poor roads and storage, lack of market information, price changes and middlemen.
Tomatoes are sold by the farmer for TSh 600 per kg and by the retailer for TSh 1 800 per kg. Find the margin and the farmer’s share.
- Margin.
- Farmer’s share.
Answer: Margin TSh 1 200 per kg; farmer’s share 33%.
Ways to improve marketing
Farmers can improve their position by forming cooperatives, selling directly, processing their products (adding value), using storage and the warehouse receipt system, using mobile phones for market prices, following grades and standards, and producing at times when the price is high.
Choose the price the farmer gets and the price the consumer pays.
Key terms
- Marketing
- Moving products from the farmer to the consumer.
- Marketing channel
- The path a product follows to the consumer.
- Value addition
- Processing that raises the value of a product.
- Perishable
- Likely to go bad quickly.
Summary
- Marketing includes grading, storage, transport, processing and selling.
- Shorter channels leave more for the farmer.
- Problems: perishability, seasonality, poor roads and information.
- Farmer’s share = farm price ÷ retail price × 100.