Agricultural Market and Marketing Process

Study Notes

An arena for organizing and facilitating agribusiness activities.
Integrates farm input supply sector, farm sector, food marketing system, and national economies.
The study of all activities, agencies and policies involved in the procurement of farm inputs and the movement of agricultural products from farm to consumers.
The performance of all business activities involved in the flow of food products and services from agricultural production to consumers.
Value-adding process that adds place, form, time, and possession utility to farm products.
A link between the farm and the non-farm sectors.
Farmers involved in marketing if they produce more than their family needs.
Marketable surplus: the production of farm exceeding that needed for personal consumption, available for sale.

Answers basic economic questions: what to produce, how much, how, and how to distribute.
Two main characteristics:
- Movements: a series of actions and events in a sequence.
- Coordination: coordination of the series of events and activities.
Essential for goods and services to move from producers to consumers.
Supply chain: farmer producer at the beginning and consumer at the end.
Marketing system: composed of businesses engaged in physical, technological, and economic activities.

Exchange: transfer of ownership from one person to another, facilitates acquisition of desired products, creates possession utility.
- Retailers and marketing agents assist buyers and create possession utility.
Transportation: moves products from one point to another, creates place utility.
- Assembling, moving, and transferring products from farm to processors, then to consumers creates place utility.
- Higher prices at the place of need due to increased utility.
Processing: converts products into suitable forms according to consumer needs and tastes.
- Adds form utility to the product.
- Examples: milling paddy into rice, oilseeds to oil, sugarcane to sugar, meat processing.
Storage: safekeeping of products for extended periods, maintains produce quality, ensures year-round supply.
- Adds time utility to the product.
- Balances supplies between periods of plenty and scarcity.
Facilitating functions:
- Standardization: establishes grades based on quality specifications.
- Grading and inspection: maintain high quality, enable pricing policies, promote exports.
- Market information: provides information on physical features and price of the product.

Optimization of Resource Use and Output Management: promotes efficient use of resources, minimizes losses in processing, storage, and transportation, distributes modern inputs.
Increase in Farm Income: ensures higher prices for farm products, reduces marketing costs and malpractices, incentivizes investment in modern inputs.
Widening of Markets: increases supply and demand network, guarantees higher prices for farm products, and lower prices for farm inputs.
Growth of Agro-based Industries: stimulates overall economic development.
Price Signals: helps farmers plan production according to national demand, transmits price signals from consumers to producers.
Adoption and Spread of New Technology: encourages farmers to adopt new technologies by guaranteeing market clearance and remunerative prices.
Employment Creation: provides direct employment for transportation, storage, processing, and retailing.
Addition to National Income: marketing activities add value to the product, increasing national income.
Better Living: essential for development programs that aim to improve living standards.
Creation of Utility for Consumers: provides products in the form and at the time required by consumers, facilitates consumer satisfaction.

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