MARKETING OF AGRICULTURAL PRODUCE

MARKETING OF AGRICULTURAL PRODUCE

Agricultural marketing are the activities involved in the flow of goods and services from the producers (farmers) to the final consumers. In other words, agricultural marketing involves all the activities required to move farm produce from the producers (farmers) to the final consumers.

Marketing also includes the selling of farm input to farmers or purchasing of farm input, e.g. seeds, fertilizers and disposal of agricultural produce to the final consumers or users.

 

IMPORTANCE OF AGRICULTURAL MARKETING

  1. Marketing helps to make products available throughout the year.
  2. It creates employment opportunities for many people.
  3. It locates where there are surpluses of produce and brings them to where there are shortages.
  4. Export of agricultural products provides foreign exchange (income) to the nation.
  5. It helps in price determination.
  6. It enables producers to know the taste of the consumers.
  7. It ensures good research into products preferred by consumers.
  8. It helps in the provision of infrastructure such as roads, electricity and pipe-borne water.

 

MEANING OF MARKETING AGENTS OR CHANNELS

Marketing channel is the sequence of intermediaries and markets through which produce move from the producers to the consumers. In other words, it is the stage through which a produce passes in the market system, starting from the producer till it gets to the final consumers. These marketing channels are:

  1. The local market: A market is a place where sellers and buyers are in close contact. Products brought to the market by the sellers (producers) are sold to the buyers (consumers).
  2. Cooperative societies: Cooperative societies buy goods in large quantities and make them available to their members and other consumers for sale at reduced prices.
  3. Middlemen: Middlemen like the wholesalers and retailers form a link which buys goods from the producers (farmers) and sells to the consumers.
  4. Commissioned agents: These agents buy goods or produce from peasant farmers and sell to marketing boards or exporters.
  5. Exporters: Exporters buy produce from commissioned agents or big time farmers and export the produce to overseas buyers or consumers.
  6. Producers: These are the farmers themselves who are also involved in the marketing of their produce.
  7. Consumers: Consumers are at times involved in the marketing of farm produce.
  8. Processors: These are agents who buy produce directly from producers (farmers) in raw state and process them into usable or consumable products.
  9. Marketing Boards: Marketing boards are equally marketing channels through which produce are purchased in large quantities either for industrial purposes or for export.

 

STAGES OF AGRICULTURAL MARKETING

The stages involved in the marketing of agricultural produce include:

  1. Farm level processing: This involves the local processing of farm produce immediately after harvesting in readiness for sale.
  2. Grading or sorting: This involves the grouping of produce into various weights and sizes for easy handling.
  3. Packaging: This refers to the loading of produce into various packs in readiness for storage. Sacks, drums or tins may be used as packaging materials.
  4. Storage or warehousing: This involves the storage of produce before sales or export.
  5. Transportation: This involves the movement of produce from warehouse to the market or ports for export.
  6. Advertisement: This involves the process of making the produce known (creation of awareness) either through radio, newspaper and television.
  7. Merchandizing: This involves the export of the farm produce through the ports to other countries.
  8. Assemblage: This is the regathering of various produce brought from different sources. In other words, it may involve the repackaging of produce in readiness for final consumption.

 

How Agricultural Marketing can be encouraged

Marketing may be encouraged through the provision of:

  1. Good roads.
  2. Capital or finance.
  3. Standard units of measurement.
  4. Adequate market infrastructures.
  5. Storage facilities.
  6. Market research.
  7. Good government policies.

 

AGENTS OF MARKETING

Agents of marketing include all the people and other bodies which are directly or indirectly involved in the marketing of farm produce. These agents are:

  • Marketing/commodity boards.
  • Producers/farmers.
  • Co-operative societies.
  • Wholesalers/distributors.
  • Individual/private middlemen.
  • Retailers.

 

1) Marketing/Commodity Boards: These are public corporations set up by government to handle the sales of agricultural produce.

 

Advantages of Marketing/Commodity Boards

  1. The board provides an organised and ready market for various agricultural commodities.
  2. It helps to stabilise prices of farm produce.
  3. The board sometimes provides capital to farmers.
  4. It advises and encourages farmers to adopt modern farming techniques.
  5. It helps to transport the produce of the farmers.

 

Disadvantages of Marketing/Commodity Boards

  1. It deals mainly on major export crops.
  2. It is capital intensive.
  3. Government interferes with the running of the boards.

 

2) Co-operative Societies: Cooperative societies are trading organisations where various entrepreneurs or members of the co-operative pool their resources together with a view to making profits through marketing of agricultural produce.

 

Characteristics of Cooperative societies

  1. There is equality among members since each person has one vote.
  2. Each member is equally qualified for participation in the management of the society.
  3. Dividends are shared according to the level of individual financial contribution.
  4. They are very useful in business when small capital is needed.
  5. The welfare of members is paramount to the society, e.g settling of dispute and other social problems.
  6. Membership is voluntary.

 

Advantages of Co-operative Societies

  1. They stimulate competition in produce marketing by buying produce in bulk.
  2. They have close contact with producers.
  3. They reduce the inequality of income distribution by selling to members at reduced rate.
  4. They provide storage facilities.
  5. They also provide transportation services.
  6. They grant loans to members.

 

Disadvantages of Co-operative Societies

  1. It does not always encourage individual enterprise.
  2. It is prone to financial misappropriation.
  3. It is also prone to poor management due to unqualified and incompetent executive handling the co-operative societies.

 

3) Individual/Private Middlemen: Some individuals/middlemen usually go directly to the farm to buy farm produce.

 

Advantages of Individual/Private Middlemen

  1. They link producers with consumers.
  2. They may give loans to producers.
  3. They assemble, blend and re-pack certain goods.
  4. They also provide storage facilities.
  5. They evacuate farm produce from the farm to the market.
  6. They assist in the even distribution of produce.
  7. They bear most of the risks from end of production to marketing.

 

Disadvantages of Individual/Private Middlemen

  1. They inflate the prices of commodities.
  2. They create artificial scarcity of goods i.e ., hoarding.

 

4) Producers/Farmers: These are the farmers themselves who are also involved in the marketing of their produce.

 

Advantages

  1. The farmer gets the full benefit of his effort.
  2. Consumers get goods at reduced price.
  3. Produce gets to the consumers fresh.

 

Disadvantages

  1. It diverts the farmer’s attention from his production activities.
  2. He lacks storage facilities.
  3. He lacks transport facilities.
  4. Farmers may suffer increased loss of goods.

 

5) Wholesalers: Wholesalers are the agents who buy produce in large quantities from the farmers (producers) and sell in small quantities to the retailers.

 

Advantages

  1. They purchase produce in bulk.
  2. They provide storage facilities.
  3. They have good transport facilities.
  4. They pass information from retailers to producers and vice versa.

 

Disadvantages

  1. They exploit the producers and retailers.
  2. They create artificial scarcity of goods.
  3. They inflate prices of commodities.

 

6) Retailers: Retailers are agents who buy goods from the wholesalers and sell in small quantities to the final consumers.

 

Advantages

  1. They make produce readily available to consumers.
  2. They provide jobs for many people.
  3. They pass information from the consumers to the wholesalers.
  4. They give credits to some consumers.

 

Disadvantages

  1. They may create artificial scarcity of goods, i.e. by hoarding.
  2. They can suffer losses due to pilfering and decay of perishable goods.
  3. They may inflate prices of commodities.

 

PROBLEMS OF AGRICULTURAL MARKETING

Problems associated with the marketing of farm produce are:

  1. Inadequate transportation system: Lack of vehicles and bad roads prevent easy transportation of food from rural to urban areas.
  2. Small Scale Production: Production is in small scale because peasant farmers produce very little output or volume.
  3. Inadequate market infrastructure: Infrastructure such as electricity, pipe-borne water and telephone, which can promote good marketing are inadequate.
  4. Perishability of produce: Most of the produce such as eggs, meats and vegetables easily get damaged and this tends to pose a problem in their marketing.
  5. Inadequate storage facilities: Most of the produce are wasted due to lack of storage facilities.
  6. Poor financing: Most buyers are not financially buoyant enough to handle marketing of produce due to lack of transportation, storage and communication facilities.
  7. Poor prices of produce: This tends to discourage production by farmers.
  8. Problems of middlemen: Middlemen hoard produce, thereby creating artificial scarcity and hence inflation of prices of the produce.
  9. Difficulty in assembling products: There is always difficulties in organising and assembling agricultural products that are produced on small farms scattered all over the country.
  10. Inadequate processing facilities: Poor packaging and processing facilities are major problems involved in agricultural marketing.
  11. Lack of uniform measures: There is always lack of uniform weights and measures for produce, i.e no standardisation in measurement.
  12. Poor quality produce: Most agricultural produce are of poor quality due to contamination.
  13. Inadequate research: There is poor or inadequate research in marketing and storage.
  14. Inadequate information: There is inadequate information about production and marketing or market intelligence.

 

MARKETING FUNCTIONS

Marketing functions refers to those specialised activities that you as a marketer must perform in order to achieve your set marketing objectives.

To achieve success in your marketing effort you need to have glimpse of the big pictures and the activities you need to perform in achieving your set marketing objectives, these activities are referred to as the functions of marketing.

 

The functions of marketing are:

  1. Researching.
  2. Buying.
  3. Product development and management.
  4. Production.
  5. Promotion.
  6. Standardization and grading.
  7. Pricing.
  8. Distribution.
  9. Risk bearing.
  10. Financing.
  11. After sales-service.

 

  1. Research function: The research functions of marketing are that function of marketing that enables you to generate adequate information regarding your particular market of target. You must carry out adequate research to identify the size, behavior, culture, believe, genders etc. of your target market segment, their needs and want, and then develop effective product that can meet and satisfy these market needs and wants.
  2. Buying function: The function of buying is performed in order to acquire quality materials for production. When you design a good product concept, you should also ensure you’re buying the essential materials for the product. This function is carried out by the purchase and. supply department, but your specifications of materials go a long way in assisting the purchasing department to acquire the necessary materials needed for production.
  3. Product development and management: Product development is an essential function of marketing since it was the duties of the marketing department to identify what the market needs or wants and then design effective product based on the identified need and want of the market. Product development passes through some basic stages carried out by the marketers to develop a targeted market specified product. And you can also manage your product by evaluating its performance and changing them to fit the current market trend.
  4. Production function: Production is the function performs by the production department. Though, this is interrelated to the department of marketing, because your product must possess the essential characteristics that can meet the target market needs and wants as identified during your market research, such characteristics as in your product test, form and packaging.
  5. Promotion function: Promotion is one of the core functions of marketing since your finish product must not remain in the place of production, hence, you as a marketer must design effective communication strategies to informing the availability of your product to your target market. You must be able to design effective strategies to communicate your product availability and features to your target market, such strategies as in; advertisement, personal selling and public relation.
  6. Standardization and grading: The function of standardization is to establish specified characteristics that your product must conform to, such standard as in having a specify test, ingredient etc. That makes your product brand so unique. Grading comes in when you sort and classify your product into deferent sizes or quantities for different market segment while maintaining your product standard.
  7. Pricing function: You perform the function of pricing on your product offerings by designing effective pricing systems base on your product stage and performance in the product life cycle. Price is the actual value consumers perceive on your product, so you as a marketer should ensure that your value of your product is not too high or too low to that of your costumers.
  8. Distribution function: The function of distribution is to ensure that your product is easily and effectively moved from the point of production to the target market, the kind of transportation system to employ e.g. Road, rail, water or air, and ensures that the product can be easily accessed by customers. You as a Marketer should also design the kind of middlemen to engage in the channel of distribution, their incentives and motivations.
  9. Risk bearing function: The process of moving a finished product from the point of production to the point of consumptions is characterized with lots of risks, such risks as in product damaging, pilferage and defaults. So you must provide effective packaging system to protect your product, good warehouse for the storage of your product until they are needed, effective transportation system to speedily deliver your product on time.
  10. Financing function: Financing deals with the part of marketing to providing incomes for your business. It refers to how you can raise capital to start operation and remain in business. It refers to your modes of payment for the goods and services transferred to your costumers.
  11. After sales-service: In a more complex and technical product, you as a marketer should make provision in order to assist your customers after they have purchased your product. In terms of machines or heavy equipment product that requires installation or maintenance, most marketing organization renders such services like installing the machine or maintaining it for stipulated periods on time for free or by a little service charge. After sales services is an effective marketing strategy to building a long lasting customer relationship, staying ahead of your competitors while making profit for your organization. Adequate understanding of these functions enables you as a marketer to know what is required to be done to having an effective transfer of ownership between you and your costumers, creating a big picture of your business, while also making profit for your organization.

 

MARKETING OF EXPORT CROPS

Export crops are crops which are grown or cultivated in Nigeria and at maturity are harvested, processed and package for sales to another country. Purely for commercial purpose.

Major crops that can be exported in Nigeria are:

  1. Cocoa.
  2. Cotton.
  3. Rubber.
  4. Palm oil.
  5. Groundnut.
  6. Palm karnels.
  7. Sesame seed.
  8. Cashew nuts.
  9. Cassava.
  10. Gum Arabic.
  11. Sorghum.

 

GUIDE LINES FOR EXPORTING CROPS IN NIGERIA

The export of crops in Nigeria involves stages from the local farmers and finally to the export companies involved in agricultural exports to foreign countries some of the guidelines are:

Commodity farmers: This is the first stage of agricultural marketing. The farmers cultivate the agricultural commodities. These farmers could be in cooperatives or act as individual.

Local buying agents (LBAs): LBAs go into the interior and villages to buy farm products from different farmers at the farm gate and commodity markets and sell to the commodity merchants.

The commodity merchants: The commodity merchants resides in cities and towns. They buy commodities from various LBAs. They have large capacity like warehouses and also have equipment to check the quality of commodities purchase from LBAs. They process these commodities and sell them to exporters and local industries.

The exporters: The exporters which could be individuals, cooperatives or companies buy commodities from merchants. At this stage, they can be assured of good quality products.

Foreign partners: Business relation are now established betweenthe exporter and the foreign partners who need the commodities. Series of contacts are made through the banks and other government export agencies who aided the final export of these commodities to foreign partners. Banks facilitates the purchase and remittance of fund from the foreign partners to the local exporters. Some corporate bodies that engaged in export marketing are:

  1. Association of Nigerian Cooperative exporters.
  2. Raw stuff Interacting Ltd.
  3. Zidon investments Ltd.
  4. Shahid Macci Nig. Ltd.
  5. Auwal Corparation Nig.
  6. Hac-Seeds Ent. Ltd
  7. Opera Dei Company Ltd.
  8. Scov Nig Ltd.
  9. T.M.E Geobal Services Nig. Ltd.
  10. Honey Touch Nig. Ltd.

 

IMPORTANCE OF EXPORTS TO AGRICULTURAL DEVELOPMENT

Export of crops to other nations is of a great importance to the development of agriculture and to the nation in general. Some of the importance of export crops are as follows:

  1. Foreign exchange earning: Through the export of agricultural crops to other nation, such activities. do general foreign exchange earnings to the nation.
  2. Wealth creation for farmers: The cultivation of expert crops do create wealth for local farmers who engage themselves in growing cash crops.
  3. Generation of employment: Many people are gainfully employed through the stages of export from farmers through middlemen to the finial point of export.
  4. Provision of raw materials for industries: Some cash crops are not only exported as many one equally used by local industries to manufacture some food items e.g. Bourvita is a product from cocoa.
  5. Provision of Market for Industrial goods: Most crops when exported do lead to importation of some industrial products like farm machinery and agro-chemicals fertilizers.
  6. Diversification of the economy: Heavy engagement in the production and export of export crops do lead to the diversification of the economy as such activities generate foreign exchange for the nations.
  7. Provision of finished products: The export of cash crops to foreign nations do lead to the importation of some finished products like beverages, clothing materials and other food items.
  8. Bilateral relations: The export of agricultural commodities do lead to the establishment of bilateral relationship between the people involved in the international trade. They also establish the exchange of ideas and innovations during trading relations.

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