Agricultural marketing needs to be conducted within a supportive policy, legal, institutional, macroeconomic, infrastructural and bureaucratic environment. Traders and others cannot make investments in a climate of arbitrary government policy changes, such as those that restrict imports and exports or internal produce movement. Those in business cannot function if their trading activities are hampered by excessive bureaucracy. Inappropriate law can distort and reduce the efficiency of the market, increase the costs of doing business and retard the development of a competitive private sector. Poor support institutions, such as agricultural extension services municipalities that operate markets inefficiently and export promotion bodies, can be particularly damaging. Poor roads increase the cost of doing business, reduces payments to farmers and increase prices to consumers. Finally, the ever-present problem of corruption can seriously impact on agricultural marketing efficiency in many countries by increasing the transaction costs faced by those in the marketing chain.


New marketing linkages between agribusiness, large retailers and farmers are gradually being developed, e.g. through contract farming, group marketing and other forms of collective action. Donors and others are paying increasing attention to ways of promoting direct linkages between farmers and buyers. The growth of supermarkets, particularly in Latin America and East and South East Asia is having a significant impact on marketing channels for horticultural, dairy and livestock products. Never the less, “spot” markets will continue to be important for many years, necessitating attention to infrastructure improvements such as for retail and wholesale markets.