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
| i) |
Sale
of surplus commodities and |
| ii) |
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 :
| 1. |
Buying
and assembling. |
| 2. |
Transporting
and loading/unloading. |
| 3. |
Grading. |
| 4. |
Storing/warehousing. |
| 5. |
Processing. |
| 6. |
Financing. |
| 7. |
Risk-bearing. |
| 8. |
Retailing. |
Functionaries
:
The
above functions are carried out by various functionaries
which are as follows :
| 1. |
Traders. |
| 2. |
Transporters. |
| 3. |
Hamals. |
| 4. |
Graders. |
| 5. |
Weigh
men. |
| 6. |
Financers/Bankers. |
| 7. |
Warehouses. |
Agencies
Following
agencies carry out marketing (buying and selling) at various
stages :
| 1. |
Village/Itinerant
merchant. |
| 2. |
Wholesaler
in assembling market. |
| 3. |
Commission
agent or Dalal. |
| 4. |
Preharvest
contractor (in fruit crops). |
| 5. |
Wholesaler
in consuming markets. |
| 6. |
Processor. |
| 7. |
Retailor. |
Types
of markets
| 1. |
Wholesale
markets. |
|
i)
In producing area.
ii) In consuming area. |
| 2. |
Retail
market in consuming area. |
| 3. |
Daily
Mandis and weekly markets in rural areas Producers
selling directly to local consumers. |
| 4. |
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
| 1. |
Open
auction. |
| 2. |
Closed
tender. |
| 3. |
Under
cover or Hatter system. |
| 4. |
Private
agreement. |
| 5. |
Quoting
on sample. |
| 6. |
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. |
|
Co-operative. |
|
Private
traders. |
|
1.
Government Channel
Producer - Govt. Department - consumer. |
|
2.
Co-operative channel Producer>co-operatives->consumer. |
|
3.
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 producer's share in consumer's 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
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.
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.
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 producer's 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
producer's shares in different commodity groups are as
follows
| 1. |
Food
grains- 55 to 65% |
| 2. |
Other
commodities- 60 to 70% |
| 3. |
Fruits-
30 to 40% |
| 4. |
Vegetables-
40 to 50% |
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