Well functioning marketing systems necessitates a strong sector backed up by appropriate policy and legislative frameworks and effective government support services. Such services can include provision of market infrastructure, supply of market information (as done by USDA, for example), and agricultural extension services able to advise farmers on marketing. Training in marketing at all levels is also needed. One of many problems faced in agricultural marketing in developing countries is the latent hostility to the private sector and the lack of understanding of the role of the intermediary. For this reason “middleman” has become very much a belittling word.
AGRICULTURAL ADVISORY SERVICES AND THE MARKET
Promotion market orientation in agricultural advisory services aims to provide for the sustainable enhancement of the capabilities of the rural poor to enable them to benefit from agricultural markets and help them to adapt to factors which impact upon these. As a study by the Overseas Development Institute demonstrates, a value chain approach to advisory services indicates that the range of clients serviced should go beyond farmers to include input providers, producers, producer organizations and processors and traders.
Efficient marketing infrastructure such as wholesale, retail and assembly markets and storage facilities is essential for cost-effective marketing, to minimize post-harvest losses and to reduce health risks. Markets play an important role in rural development, income generation, food security, developing rural-market linkages and gender issues. Planners need to be aware of how to design markets that meet a community’s social and economic needs and how to choose a suitable site for a new market. In many cases, sites are chosen that are inappropriate and result in under-use or even no use of the infrastructure constructed. It is also not sufficient just to build a market; attention needs to be paid to how that market will be managed, operated and maintained. In most cases where market improvements were only aimed at infrastructure upgrading and did not guarantee maintenance and management, most failed within a few years.
Rural assembly markets are located in production areas and primarily serve as places where farmers can meet with traders to sell their products. These may be occasional (perhaps weekly) markets, such as hat bazaars in India and Nepal, or permanent ones. Terminal wholesale markets are located in major metropolitan areas, where produce is finally channeled to consumers through trade between wholesalers and retailers, caterers, etc. The characteristics of wholesale markets have changed considerably as retailing changes in response to urban growth, the increasing role of supermarkets and increased consumer spending capacity. These changes require responses in the way in which traditional wholesale markets are organized and managed.
Retail marketing systems in Western countries have broadly evolved from traditional street markets through to the modern hypermarket or out-of-town shopping center, in developing countries, there remains considerable scope to improve agricultural marketing by constructing new retail markets despite the growth of supermarkets, although municipalities often view markets as a source of revenue rather than infrastructure requiring development. Effective regulation of market is essential. Inside the market, both hygiene rules and revenue collection activities have to be enforced, of equal importance, however, is the maintenance of order outside the market. Licensed traders in a market will not be willing to cooperate in raising standards if they face competition from unlicensed operators outside who do not pay any of the costs involved in providing a proper service.