Marketing of farm products includes all activities related to the supply of agricultural products, including all those operations that involve the purchase, harvesting, sorting, storage, food and agricultural processing, transportation, financing and sale of agricultural products. In fact, marketing includes all the main aspects of agribusiness, and also excludes the main activity of cultivation.
The agricultural marketing system is also linked to the economic growth of the agricultural sector and the provision of safe and affordable food for consumers, both of which are directly linked to the country’s food security.
Advantages of a proper marketing system Effective marketing system and its advantages State policy instruments in agricultural marketing Different platforms for marketing of agricultural products The main challenges of agricultural marketing
Objectives of marketing of farm products
It gives farmers as primary producers the opportunity to get the best benefits; provide opportunities to raise all products that farmers are willing to sell, at a price incentive; reduce the price spread between the primary producer and the final consumer; and provide consumers with affordable agricultural products at a reasonable price without compromising product quality.
It helps farmers get the right value for their products. Demand Signal Platform: Marketing systems balance supply and demand.
In addition, it may open up new market paths. Opening markets to promote competition and long-term growth as a desired outcome. Capital formation and investment in technology: marketing leads to investment in modern supply chain infrastructure and information technology programs to increase production or increase the cost of production.
Benefits of marketing of farm products
Marketing efficiency as a measure of expanding the market system to create greater revenue streams and competitiveness. The efficiency of the market channel depends on the reduction of marketing costs, the introduction of technologies for sorting, packaging, transportation, storage, value added, wholesale, retail and the study of economies of scale through aggregation. An effective marketing system ensures a proper share of farmers in the production process and ensures timely delivery of goods and services.
Delivers demand signals to the supply side – An effective marketing system uses market analysis to forecast demand. An effective marketing system will seek to minimize the blind push to the markets and instead facilitate exit from the markets. Increasing income generation – A well-organized marketing system will increase the total amount of income generated in the value chain of agriculture. also aim to ensure that there is a fairer distribution of net income between all stakeholders in the value chain system.
Assisting in market expansion – An effective marketing system will always help to expand the range of producers / suppliers and provide a choice for market expansion, as well as increase activity in domestic agricultural trade. Single market – A well-organized internal marketing system will be integrated, developing an extensive connection through a network of demand centers and supply regions, creating unity in the market arena. Competitiveness – Competitiveness also leads to improve resource optimization and ensure cost-effectiveness.
ALSO CHECK: Surveying and planning of farmstead
Problems of agricultural or farm marketing
- Barriers to market licensing- The mandatory requirement to own a shop / roof for licensing of commission agents / traders in regulated markets has led to a monopoly of licensed traders, and this has been an obstacle to new entries.
- The market infrastructure in agricultural markets is very poor- The lack of indoor and outdoor auction platforms, common drying platforms, electronic weighbridges creates serious problems. Refrigeration systems are also very scarce. High level of market fees: KVNs have the right to charge a market fee in the range of 0.50 to 2.0 percent of the realized value of products. But in some states, the general meeting is about 15 percent, which is excessive.
- Lower sales of farmers’ prices- The share of farmers in consumer prices is very low, especially in perishable goods due to a number of intermediaries, lack of infrastructure and poor retention capacity.
- A huge number of marketing channels with a long supply chain- Traditionally, the normal chain of sales of agricultural products in the country is quite long with a large number of intermediaries between producers and consumers, which increases costs without adding significant value.
- Lack of evaluation and standardization- Different varieties of agricultural products are not properly evaluated. The common practice is known as dara sales, where a bunch of all quality products are sold in one batch, so the farmer who produces the best quality is not sure of the best price. Therefore, there is no incentive to use better seeds and give better varieties.
In addition, a large loss in the supply chain, a long period of development of infrastructure projects and seasonality of the agro-industrial complex.
Agricultural marketing involves in the simplest form of purchase-sale of agricultural products. In the old days, when the rural economy was more or less self-sufficient, the marketing of agricultural products was not difficult, as the farmer sold his products directly to the consumer in cash or barter. Agricultural marketing consists of all the functions and services used to move goods from producer to final consumer. It includes not only physically moving to the place where the product is needed, but also putting it in the desired shape and quantity, as well as readiness at the right time.
Stages in marketing of farm products
The commodity marketing system covers all participants in the production, processing and marketing of undifferentiated or non-branded agricultural products (eg cereals), including suppliers of agricultural raw materials, farmers, storage operators, processors, wholesalers and retailers involved in the flow of goods to the initial flow of goods. The product marketing system also includes all institutions and mechanisms that influence and coordinate successive stages of the product flow, such as the government and its government partners, trade associations, cooperatives, financial partners, transport groups and product-related educational organizations.
The framework of the product system includes the main links that hold the system together, such as transportation, contractual coordination, vertical integration, joint ventures, tripartite marketing agreements and financial agreements. The systems approach emphasizes the interdependence and interconnectedness of all aspects of agribusiness, namely from the supply of agricultural products to the cultivation, collection, storage, processing, distribution and final consumption of the product.
Marketing systems vary greatly depending on the product, production systems, culture and traditions of producers and the level of development of both a particular country and a particular sector in that country. In this case, the overview of the structure of selected basic goods sold on the market, which is as follows, is broad and general.