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AGRICULTURAL MARKETING

Updated on March 23, 2011

AGRICULTURAL MARKETING

Agriculture is the major sector of the economy. It not only meets the food needs of the entire population but also supplements the foreign exchange resources through export of farm produce. It engages about 44% of labour force, provides livelihood to 65% of the population and contributes 21% share to GDP. Despite the fact that rural population constitutes about 65% of the total population yet it has no organization of its own, not even a chamber of agriculture to represent its views and protect interests.

One of the interests of the farmers is to get a fire return of their produce in the market. At present the farmers who are spread all over the country make the sales of their surplus products to the village shopkeepers. Some portion of the output is also sold direct or through market agencies (middlemen) in the markets. The farmers do not get a fair price of their surplus commodities and as such are discouraged. Marketing of agricultural produce, thus is the major problem of the farming community.

AGRICULTURAL MARKETING ITS PROBLEMS

Agricultural marketing is the performance of business activity that direct the flow of agricultural goods and services from producer to consumer. Agricultural marketing includes the operations of collecting the produce, grading storing, transporting, and selling to the ultimate consumer. ''Since agriculture is fundamentally different from manufacture, therefore the marketing of agricultural surplus is beset with a number of complex problems. For example the agricultural goods are generally perishable and cannot be stored for a longer period of time. There are great variations in the quality of produce from year to year etc. The farmer is therefore, generally handicapped. He has to sell his produce at an unfavorable place at an unfavorable time and on unfavorable terms.

Present state of marketing

In Pakistan there are four system of marketing the surplus agricultural produce.

(i) Sale in villages. The farmers sell more than 50% of the surplus produce to the traders and shopkeepers in their own villages normally below the market price.

(ii) Sale in markets. The second method of selling the surplus produce is in the scattered markets near the villages.

(iii) Sale in mandis. Another method of selling the agricultural produce is through minds where commission agents, wholesalers buy the produce at competitive price.

(iv) Cooperative marketing. The fourth from of marketing is the cooperative marketing. In Pakistan, this system has failed and the farmers sell the goods to individuals traders or commission agents.

Problems of marketing system.

The main problems or defects in marketing system in Pakistan are as under:

(1) Low quality of produce. The production of agricultural goods is generally of low quality due to absence of grading, indifferent use of seeds, pests and deceases, deliberate adulteration etc. The agricultural produce like cotton, rice, do not enjoy good reputation in the foreign market. As such the cash returns to the producers are low.

(2) Costly transport facilities. The transport system which consists of roads, network, railways, air transport, ports and shipping services is not only inadequate but also very costly for the transportation of the bulky agricultural goods from one place to another. Marketing cots take a too high share of the final price.

(3) Lack of market knowledge. The frames mostly being illiterate do not have detailed market knowledge as to when how and where the goods are to be sold. They therefore do not get a fair return of their produce.

(4) Chain of middlemen. There is a long chain of middlemen or intermediaries who are engaged in handling of the farm produce from the grower on to the consumer. Each of these intermediaries take their own margin and thereby diminish the return of the cultivator.

(5) Multiplicity of charges. There are a number of unjustified charges which the farmer has to pay in the market. These charges like commissions, collie, masjid fund flood fund etc are a burden on the seller. The other charges like octori duties toll taxes are also paid by the farmer while transporting goods to the market.

(6) Lack of storage and warehousing facilities. There is no or inadequate storage facilities at the farm level or in the houses of the farmers to store the surplus produce. They therefore have to sell the produce immediately after the harvest which brings reduced prices. The warehousing facilities in the markets are also insufficient and expensive.

(7) Weights and measures usedby purchasers are not correct.

Measures taken by the Government of Pakistan for the improvement of agricultural marketing.

The Government of Pakistan has taken a number of measures for the betterment of agricultural marketing in Pakistan. They in brief are.

(1) Farm to market roads. The govt. of Pakistan is allocating huge sums of money each year in the budgets for the construction of farm to market roads. The construction of roads not only reduces marketing costs but also makes it easy for the farmers to sell their surplus in the regularized markets.

(2) Provision of information. The Govt. is also providing through television, newspapers, radio information of current market prices of agricultural goods, crops prospects, factor influencing demand etc. The timely information provided by the Govt. helps the farmers in receiving fir return of their produce.

(3) Establishing systems and grades. The Govt. through different medias and market organizations stresses on the farmers to maintain standards and grades of agricultural produce. The establishment of reeds of the agricultural goods brings good return on their investment. stimulates export and helps the Govt. in earning foreign exchange.

(4) Regulation regarding weights. The Govt. has set up marketing organization for implementing regulations regarding measuring weights, health and safety measures and checking unauthorized deductions by the purchasers.

(5) Construction of warehouses and rural god owns. The Govt. is also constructing warehousing and rural god owns through PASCO. The construction of god owns makes easy to store the goods, supply them when these are needed in the market. The storage facility helps in the stabilization of prices of agricultural goods.

(6) Setting up market organizations. There are various agencies both at the Federal and Provincial levels (Federal Agricultural Marketing Department, Marketing Intelligence etc.) which are entrusted with the grading of agricultural products, marketing research, survey etc. The Agricultural Price Commission (A .P. Com) consider a number of criteria including cost of production, domestic and world prices of goods. It also revises and fixes the support prices of important crops every year.

(7) Establishment of PASCO. The government has also established Pakistan Agricultural Stores and Supply Corporation (PASCO) in 1973. PASCO purchases the less perishable commodities at the procurement prices in the producing years and releases the same in the market at the sale prices fixed by the government.

(8) Agricultural Marketing and Storage Limited (AMSL). The AMSL was set up in 1981, for catering the problems pf perishable commodities like fruits, vegetables, potatoes, onions. It has done a useful job in the stabilization of prices of perishable goods.

(9) Encouragement of cooperative marketing. Pakistan is encouraging the selling up of cooperative marketing societies through the Cooperative Department. The primary objective of this is to promote orderly marketing and ensure reasonable prices for the produce of the farmers. These societies on papers do exist, but practically they are not functioning in its true spirit anywhere in Pakistan.

(10) Regularized markets. There are at present 316 regularized markets in Pakistan The present Govt. through devolution of power plan to local bodies is encouraging the establishment of regularized markets in the rural areas.

(11) Future Challenges. In the year 2005, when trade will be liberalized under the WTO regime, there is an urgent need that farmers should be made aware of the problems to be faced by them in marketing of the products. They shall now have to concentrate on improving the quality of products by proper grading standardization and storage. The government shall have to develop efficient and strong marketing infrastructures for timely availability of the goods at the right place, at the right time, at the right price and in the suitable form needed in the domestic and international markets.

Also read

ROLE OF COOPERATIVE MARKETING IN AGRICULTURAL PRODUCE

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