Agricultural |
| Agricultural - Organic and Natural Products - Bio Fertilizer |
| Agricultural - Organic and Natural Products - BioFertilizer |
| Agricultural Marketing - Agricultural marketing is one of the important branches of agricultural economics. Farmers have one commodity or the other in surplus. This surplus has to be disposed off or sold so as to earn some money to satisfy other needs, which cannot be satisfied on the farm or in the village. Thus, agricultural marketing has two-fold objective |
| Sale of surplus commodities and - |
| Buy other commodities to satisfy family needs. -In modern commercial agriculture, the surpluses with farmers are steadily rising so also their family needs are changing with the change in lifestyle. Therefore, agricultural marketing has assumed important place. Traditionally, market is place or building where buying or selling of goods takes place. But in modern times with fast and long distance communication facilities like telephone becoming available, market is no more restricted to particular place only, but it has become wider and has assumed regional, national or even international status. Buying and selling is finalized on telephones only from distant places. Thus the concept of market has radically changed. |
| Marketable Surpluses - The concept of marketable surpluse is very important for the development of markets. Marketable surplus is different in different commodities. Marketable surplus is a surplus which is available for sale after meeting i) family needs ii) seed requirement iii) kind wages iv) gifts to relatives and friends etc. In the case of foodgrains surpluses are generally low. They vary from zero (with small and marginal farmers) to 70-80 percent with large farmers and in surplus areas. In general marketable surpluses in foodgrains are in the range of 45 to 50%. In cash crops and in those commodities which are raw materials of industry, surpluses are 80-100 %. In fruits and vegetables, which are grown on commercial scale, surpluses are above 90%. Thus, for the commodities which have large surpluses markets have to be well-organized and efficient ones. |
| Market functions |
| Agriculture marketing comprises of all the operations involved in the movement of produce from the farm till it reaches the ultimate consumer. Several functions are involved in this process. |
| They are as follows : |
| Buying and assembling |
| Transporting and loading/unloading. - |
| Grading |
| Storing/warehousing |
| Processing |
| Financing |
| Risk-bearing |
| Retailing |
| Functionaries : |
| The above functions are carried out by various functionaries which are as follows : |
| Traders |
| Transporters |
| Hamals |
| Graders |
| Weigh men |
| Financers/Bankers |
| Warehouses |
| Agencies |
| Following agencies carry out marketing (buying and selling) at various stages : |
| Village/Itinerant merchant |
| Wholesaler in assembling market |
| Commission agent or Dalal |
| Preharvest contractor (in fruit crops) |
| Wholesaler in consuming markets |
| Processor |
| Retailor |
| Types of markets |
| Wholesale markets. |
| i) In producing area. ii) In consuming area. |
| Retail market in consuming area. |
| Daily Mandis and weekly markets in rural areas Producers selling directly to local consumers. |
| Annual and occasional fairs |
| Perfect and imperfect Markets |
| As per definition, agricultural markets should be perfectly competitive markets as there are large number of buyers and sellers. But these markets are not really perfectly competitive. The traders as buyers are generally educated, have full knowledge of market-practices (demand, supply, prices, etc.) and are organizationally strong. This is not the case with farmers-sellers. They are mostly ignorant, weak and unorganized. When the prices are fixed in the open market, the farmers do not get the reasonable and correct prices as they sell their produce under forced or distress situation. Therefore these markets are imperfect markets. |
| Methods of sale |
| Following methods of fixing prices are observed in various markets |
| Open auction |
| Closed tender |
| Under cover or Hatter system |
| Private agreement |
| Quoting on sample |
| Dara sale. -
First method i.e. open auction, is most popular and is followed in regulated markets as prices are fixed in the presence of all concern. Channels of marketing |
| Government Channel: Producer - Govt. Department - consumer. - Government channel is used mainly for foodgrains like rice, wheat and sugar. In some essential commodities, when the prices are unduly high or low the Govt. enters into market to buy the commodities and sell them to protect the interests of both-producer and consumer. The examples are onion, edible oils etc. Government channel operates with the co-operative or private channels. In Maharashtra, Govt. channel operates in the marketing of milk along with co-operative and private channels. |
| Co-operative channel: Producer co-operatives- consumer. The co-operative channel is quite weak in the country. In Maharashtra, this channel is used partially in important fruit crops like grapes, pomogranate, banana, ber, orange along with private channel. It is also used in milk in Maharashtra, Gujrathi etc. along with Govt. and private channels. |
| Private channel: Producer - village merchant- wholesaler- commission agent (Dalal) - Retailer- consumer. - |
| In some fruit crops, in addition to the above, there is preharvest contractor who takes fruit gardens while fruits are still on the trees. |
| In private channel, there are many intermediaries, which result into high costs and market margins. Therefore, the commodities become costly for the final consumer and this reduces the producers share in consumers prices. This is a traditional channel and is quite popular with the farmers. Nearly 60 to 70% agricultural produce is sold through this channel. |
| The channels of marketing is an important aspect of agricultural marketing affecting the prices paid by consumers and shares of them received by the producer. The shorter the channel, lesser the market costs and cheaper the commodity to the consumer. When the channel is long with more intermediaries, prices are more and producers is less. The channels of marketing and price for different commodities has been the main focus of research in agricultural marketing. The channel which provides commodities at cheaper price to consumer and also ensures greater share to producer is considered as the most efficient channel Several studies have been carried out in India on this topic for different commodities and in different regions and the results are of mixed nature due to local socio-economic conditions and infrastructure facilities. |
| Normally producers shares in different commodity groups are as follows |
| Food grains- 55 to 65% - |
| Other commodities- 60 to 70% |
| Fruits- 30 to 40% - |
| Vegetables- 40 to 50% |
| Concept and Importance - The study of agricultural marketing comprises all the operations, and the agencies conducting them, involved in the movement of farm-produced foods, raw materials and their derivatives, such as textiles, from the farms to the final consumers, and the effects of such operations on farmers, middlemen and consumers. Agricultural marketing is the study of all the activities, agencies and policies involved in the procurement of farm inputs by the farmers and the movement of agricultural products from the farms to the consumers. The agricultural marketing system is a link between the farm and the non-farm sectors. It involves all the aspects of market structure or system, both functional and institutional, based on technical and economics considerations, and includes pre and post-harvest operations, assembling, grading, storage, transportation and distribution. A dynamic and growing, agricultural sector requires fertilisers, pesticides, farm equipments, machinery, diesel, electricity and repair services which are produced and supplied by the industry and non-farm enterprises. The expansion in the size of farm output stimulates forward linkages by providing surpluses or food and natural fibres which require transportation, storage, milling or processing, packaging and retailing to the consumers. |
| Importance |
| Agricultural marketing plays an important role not only in stimulating production and consumption, but in accelerating the pace of economic development. The agriculture marketing system plays a dual role in economic development in countries whose resources are primarily agricultural. Increasing demands for money with which to purchase other goods leads to increasing sensitivity to relative prices on the part of the producers, and specialization in the cultivation of those crops on which the returns are the greatest, subject to socio-cultural, ecological and economic constraints. It is the marketing system that transmits the crucial price signals. |
| Agricultural Marketing is one of the manifold problems, which have direct bearing upon the prosperity of the cultivators, as India is an agricultural country and about 70% of its population depends on agriculture. |
| Most of the total cultivated area (about 76%) is to under food grains and pulses. Approximately 33% of the output of food grains, pulses and hearly all of the productions of cash crops like cotton, sugarcane, oilseeds etc. are marketed as they remain surplus after meeting the consumption needs of the farmers. Development of technology, quick means of communication and transportation has introduced specialization in agriculture. |
| Agriculture supplies raw materials to various industries and therefore, marketing of such commercial crops like cotton, sugarcane, oilseeds etc. assumes greater importance. |
| With the introduction of green revolution agricultural production in general and food grains in particularly has substantially increased. Agriculture once looked as a subsistance sector is slowly changing to a surplus and business proposition. |
| The interaction among producers, market functionaries, consumers and government that determine the cost of marketing and sharing of this cost among the various participants. |
| The producer, middleman and consumer look upon the marketing process from their own individual point of view. The producer is primarily concerned with selling his products. |
| Any increase in the efficiency of the marketing process, which results in lower costs of distribution at lower prices to consumers, really brings about an increase in the national income. |
| A reduction in the cost of marketing is a direct benefit to the society. |
| Marketing process brings a new varieties, qualities and beneficial goods to consumers and therefore, marketing acts as a line between production and consumption. |
| Scientific, systematic marketing stabilizes the price level. |
| An improved marketing system will stimulate the growth of number of agrobased industries mainly in the field of processing. |
| A marketing system can become a direct source of new technical knowledge and induce farmers to adopt upto date scientific methods of cultivation. |
| Agricultural Marketing is therefore, playing an important role in the economic development and stability of a country. |