Marketing of agricultural produce cont'd

Agricultural Science S.S.S 3 Second Term

WEEK 2

Marketing of agricultural produce cont'd

Performance Objectives

Student should be able to:

1. List marketing agents.

2. Explain marketing agents.

Content

2. Co-operative societies: These are associations formed by people with common goals. Co-operative societies go by different names reflecting the purpose for which they were formed. For example, we have agricultural produce co-operative which undertake the marketing of member produce.

Benefits of co-operative societies

1. Elimination of middlemen from agricultural marketing operations. Middlemen exploit farmers in trying to maximize profit.

2. As a body, they enjoy high bargaining power by pulling their output and resources together.

3. They obtain market information and advice at a much cheaper rate than individual marketers.

4. It is easier to obtain assistance from governments and credit agencies e.g Agricultural Development Banks (ADB), Agricultural Development Project (ADP).

5. It makes farmers to be encouraged on large scale production.

The successful operations of co-operative societies is based on the following principles:

a. All members contribute an equal amount of money as dues, to avoid domination by those who would have like to contribute more.

b. They are neutral in terms of politics and religion.

c. They must have one voice in reaching a decision.

Advantages of co-operative societies

1. Have close contact with producers.

2. Reduce the inequality of income distribution.

3. Provide transportation services.

4. Grant loans to members.

5. Buy products in bulk for members.

6. Stimulate competition in produce marketing.

3. Middlemen - Wholesalers: Wholesalers are those who buy in bulk from producers/farmers and sell in smaller quantities to retailers. As far as agricultural marketing is concerned, middlemen are looked at as a cliff in the wheel of progress of the farmers and the consumers. They form associations and by so doing dictate the price for the farmers and influence the final market price for the consumer. Such prices are never in favour of the farmers or the consumer hence food items are cheap in the village and costly in the towns and cities.

 

The middlemen have commission agents at the village level who male the purchases from the farmers as the produce is harvested. This is a relief to the farmer in terms of processing and storage and wastage arising from non-marketability are highly minimized. Sometimes, they extend credit to the farmers. However, without middlemen, it would have been extremely difficult for the farmer to get his produce across to the consumer.

Advantages of the middlemen

1. Packaging of farm produce.

2. Link producers with consumers.

3. Give loans to producers.

4. Assembling of farm produce.

5. Save the producer time in marketing his goods.

6. Sorting and grading of farm produce.

7. Pass market information to farmers.

4. Retailers: These are marketing agents who buy from Wholesalers, processors or directly from the farmers and sell in small units to the consumer. Retailers inflate prices and sometimes suffer losses through stealing and spoilage of produce.

Advantages of retailers

1. Make produce readily available to consumers.

2. Provide jobs to many people.

3. Pass information from consumers to Wholesalers.

4. Give credit sales to some consumers.

5. Producers: These are the farmers who produce the goods. The bulk of their produce is sold to the middlemen. Only a very small quantity is sold directly to the consumers. Farmers are not often united, hence they cannot influence the price of their products. However, the farmers get the full benefits of his efforts. Also, consumers get goods at reduced prices and produce gets to the consumer fresh.

Problems of agricultural marketing

1. Lack of an adequate transportation system.

2. Returns from small scale farming are low because it does not enjoy the economy of scale.

3. Prices of agricultural products are low when compared to manufactured products.

4. Some products are perishable and must be disposed of soon after harvest.

5. Lack of adequate storage facilities.

6. Middlemen tend to take almost all the profit that should go for the farmer.

7. Inadequate processing equipment has led to the spoilage of farm produce.