Market |
| Market |
| Types of markets in Agriculture - Meaning of market - Markets means a open place or large building where actual buying and selling takes place |
| The market may extend to a locality, village town, region or a country according to the demand of a commodity. Market includes both place and region in which buyers and sellers are in free intercourse with one another |
| Marketing includes those business activities that direct the flow of goods and services from producer to consumer. - Types of agricultural markets in India and their classification - - |
| Market for agricultural produce may broadly be divided into three categories |
| Wholesale market |
| Retail market |
| Fairs - |
| Wholesale markets: - These markets are subdivided into Primary and Terminal markets |
| Primary wholesale markets: These markets are periodically held, either ones or twice a week. Agricultural produce comes from neighboring villages. These markets deal in the sale of fruits, vegetables, foodgrains, all household requisites etc. for e.g. Village market |
| Secondary wholesale market: These are also known as mandis. These are situated generally at district or taluka headquaters. Small merchant s purchase from primary wholesale market and sale in this markets. Some cultivators directly sell their produce in these markets. Each market comprises area with a 10-20 miles radius. For e.g. District and taluka market. |
| Terminal markets: These are the markets in which the produce is either finally dispose off , direct to consumer or processors or assemble for shipment to foreign countries. These markets are the parts where warehouses and storages are available/ cover a wide area, may be state. For e.g. |
| Bombay terminal market. - Retail markets: These markets are spread all over the city or town subject to municipal control. They generally deal in all types of produce and serve the needs of the city people as well as of the surrounding villages. Particular type of market is located in particular locality. Cloth market is one locality and grain, vegetable are in different localities. There is direct selling to consumer. |
| Fairs: |
| These are held on religious occasions, at pilgrim centre. These markets deal in livestock, agricultural produce etc. for e.g. Magh Mela at Allahabad. There are various dimensions of markets. Any market may be classified on the basis of this Dimensions |
| On the basis of free intercourse or degree of competition - |
| Perfect market: A market said to be perfect, when all potential sellers and buyers are promptly aware of the prices at which transaction takes place, any buyers can purchase from any sellers. The principle underlying a perfect market expects that there must be a uniform price for any one standardized commodity at a particular time at any place, there should not be restriction on the movement of a commodity, there must be a good number of buyers and sellers. |
| Imperfect market: A market is said to be imperfect where, some buyers or sellers or both are not aware of the prices at which transactions takes place. There is restriction for movement of goods. |
| Imperfect markets are |
| Monopoly market: There is only one seller of the commodity |
| Duopoly market: It has two sellers of a commodity. |
| Oligopoly market: There are more than two but a still a few sellers of commodity |
| Monopolistic competition: A large number of sellers will deal in heterogenous and differentiated form of a commodity |
| On the basis of time: |
| Very short period markets: These are for few hours and are mostly for highly perishable commodities like fruits, vegetables, fish, milk, etc. |
| Short period market: In these markets commodities are perishable and can be traded for some time. This commodities are like foodgrains and oilseeds. |
| Long period markets: Time span available is long to adjust supply to meet demand even by managing production. These markets can be for machinery and manufactured goods |
| On the basis of nature of commodities (Type of goods transacted): |
| Commodity markets |
| Produce exchange- commodities are produced and not manufactured. Generally one market in one commodity. e.g. cotton exchange Mumbai. |
| Manufactured goods markets: These are markets of manufacture and semi manufactured goods. For e.g. Leather exchange of Kanpur precious stones. These are highly specialized and well organized markets of world for e.g. bullion market of Mumbai |
| Capital markets : |
| Money markets: Broad term include a number of agencies providing a finance to business. These are at large trading centers like Mumbai, London |
| Foreign exchange market: It is international market and largely concerned with export and import trade of countries. |
| Stock exchange : This is market for investments stocks bonds debentures shares are purchased and sold in different parts of the countries for e.g Calcutta and Madras stock exchange |
| On the basis of area of coverage: |
| Village Markets: Buying and selling activities are confined among buyers and sellers of the village or nearby villages mostly for perishable a commodities. |
| Regional markets: (District/ Sate) Buyers and sellers for among commodity are drawn large area than the local markets in India there generally exist for food grains. |
| National Markets: Buyers and sellers are at National level e,g. Durable goods such as Jute, Tea. |
| World Markets: Buyers and sellers drawn from the world biggest markets form area point of view and exist for commodities having world wide demand e.g., Coffee, Gold, silver. |
| V - On the basis of location or importance: - |
| Primary Wholesale markets: These are located in big towns near the centres of production of agriculture commodities, transaction mostly take place between farmers and traders. |
| Secondary Wholesale markets: These are generally located at districts headquarters or important trade centres near railway stations. Produce is handled in large quantity. |
| Terminal markets: Here produce is either finally disposed off to the consumers or processors or assembled for export. These are located in Metropolitan cities like Mumbai, madras and Calcutta. |
| Sea board markets: These are located near seashore and are mainly meant for import and export of goods. |
| Fairs: These are held on religious occasions. |
| On the basis of nature of transaction - : |
| Spot or cash markets: - Here goods are exchanged for money immediately after sale of within reasonable short period of time. |
| Forward or future markets: - Here a transaction takes place for a standardized commodity with a promise to pay and deliver a commodity at some future dat |
| On the basis of volume of transaction: |
| Wholesale markets: Here commodities are brought by and sold in large lots or in bulks. Transaction takes place generally between traders. |
| Retail markets: Her commodities are brought by and sold to the consumers as per their requirement |
| On the basis of no of commodities in which transaction take place: |
| General market: In these markets almost all the types of commodities, such as foodgrains, oilseeds, gut fiber crops etc. are brought and sold. |
| Specialized markets: In these transaction takes place only in one or two commodities. For every group of commodities, separate markets exist e.g. Food grain markets. Cotton, markets etc. |
| IX - On the basis of stage of marketing: |
| I - Producing markets: These market mainly assemble goods for further distribution to other markets for production purpose. They are located producing areas. |
| Consuming markets: Here produce is collected for final disposal to the consuming population. These are located generally in thickly populated areas, where production is adequate. |
| On the basis of extent of public intervention: - |
| Regulated markets: Here business is done as per the rules and regulated by statutory market organization. Market charges are standardized and fixed and practices regulated by Agril Produce Market committee. II Unregulated markets: Here business is conducted without ant set of rules and regulations. Traders frame rules and conduct business. These markets suffer from various defects in functioning. |
| Marketing Channels |
| Meaning: Farmers producing agricultural produce are scattered in remote villages while consumers are in semi-urban and urban areas. This produce has to reach consumers for its final use and consumption. There are different agencies and functionaries through which this produce passes and reaches the consumer. A market channel or channel of distribution is therefore defined as a path traced in the direct or indirect transfer of title of a product as it moves from a producer to an ultimate consumer or industrial user. Thus, a channel of distribution of a product is the route taken by the ownership of goods as they move from the producer to the consumer or industrial user. |
| Factors affecting channels: There are several channels of distribution depending upon type of produce or commodity. Each commodity group has slightly different channel. The factors are : |
| Perishable nature of produce .e.g. fruits, vegetables, flowers, milk, meat, etc. |
| Bulk and weightcotton, fodders are bulky but light in weight. |
| Storage facilities. |
| Weak or strong marketing agency. |
| Distance between producer and consumer. Whether local market or distant market. |
| Types of Market Channels: Some of the typical marketing channels for different product groups are given below: |
| Channels of rice: |
| Producer miller - consumer (village sale) |
| Producer miller - retailer consumer (local sale) |
| Producer wholesaler - miller retailer consumer |
| Producer millercum -wholesaler - retailer -consumer |
| Producer village merchant miller retailer consumer |
| Producer govt. procurement miller retailer consumer |
| Channel of other food grains: |
| Producer consumer (village sale) |
| Producer village merchant consumer (local sale) |
| Producer wholesaler -cum- commission agent retailer consumer |
| Producer primary wholesaler secondary wholesaler retailer Consumer |
| Producer Primary wholesaler miller consumer (Bakers). |
| Producer- govt. procurement retailer consumer. |
| Producer government miller retailer consumer . |
| Channels of cotton: |
| Producer village merchant wholesaler or ginning factory wholesaler in lint textile mill (consumer) |
| Producer Primary wholesaler ginning factory secondary wholesaler consumer (Textile mill) |
| Producer Trader ginning factory wholesaler in lint consumer (Textile mill) |
| Producer govt. agency ginning factory consumer (Textile mill). |
| Producer Trader ginning factory wholesaler retailer consumer (non-textile use). |
| Channels of Vegetables: |
| Producers consumer (village sale) |
| Producer retailer consumer (local sale) |
| Producer Trader commission agent retailer consumer . |
| Producer commission agent retailer consumer |
| Producer primary wholesaler secondary wholesaler |
| retailer consumer (distant market). |
| Channels of Fruits: |
| Producer consumer (village sale) |
| Producer Trader consumer (local sale) |
| Producer pre-harvest contractor retailer consumer |
| Producer commission agent retailer consumer. |
| Producer pre-harvest contractor commission agent retailer consumer |
| Producer commission agent secondary wholesaler |
| retailer consumer (distant market). |
| These channels have great influence on marketing costs such as transport, commission charges, etc. and market margins received by the intermediaries such as trader, commission agent, wholesaler and retailer . Finally this decides the price to be paid by the consumer and share of it received by the farmer producer. That channel is considered as good or efficient which makes the produce available to the consumer at the cheapest price also ensures the highest share to the producer. |