What is agricultural marketing in economics


Agricultural marketing comprises marketing of food grain, commercial crops, plantation crops, horticultural produce and semi-processed products. Economists have divided market in different manners based on the frequency with which they are held, the type of products traded, the scale of transaction and the kind of marketing functions performed.


What are the disadvantages of Agricultural Marketing?

What are the five problems caused by modern farming?

  • leading to soil infertility due to the excess use of fertilisers.
  • killing useful microbes and earthworms present in the soil.
  • ground water depletion due to excess use of water.
  • farmers could not provide more money.
  • leads to groundwater pollution.

What are some agricultural marketing activities?

Agricultural marketing is a method that includes gathering, storage, preparation, shipping, and delivery of different farming materials across the country. In agriculture marketing, the selling of an agriculture product depends on various components like the demand for the product at that time, availability of storage, etc.

What is the importance of marketing of agriculture products?

  • Farmer’s want to sale their produce at highest possible prices…
  • Consumer want to buy it at least possible prices…
  • Trade players want to make most for themselves by exploiting both farmers and consumers…
  • Government – Regulators want to exercise control over all three and earn revenues out of it…

What is the marketing margin for agricultural products?

Agriculture. In the agriculture industry, marketing margins can take on a slightly different meaning. Since produce is grown rather than built or bought wholesale, the marketing margin lies between the price that a small organic or traditional farmer would get selling her stock directly to a wholesaler at harvest versus the cost of taking it to market and selling it retail.


What is agricultural marketing?

Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. These services involve the planning, organizing, directing and handling of agricultural produce in such a way as to satisfy farmers, intermediaries and consumers. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing and packaging, transport, storage, agro- and food processing, provision of market information, distribution, advertising and sale. Effectively, the term encompasses the entire range of supply chain operations for agricultural products, whether conducted through ad hoc sales or through a more integrated chain, such as one involving contract farming .

What are the efforts to develop agricultural marketing?

Efforts to develop agricultural marketing have, particularly in developing countries, tended to concentrate on a number of areas, specifically infrastructure development; information provision; training of farmers and traders in marketing and post-harvest issues; and support to the development of an appropriate policy environment.

How have wholesale markets changed?

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 may require responses in the way in which traditional wholesale markets are organized and managed.

How does market information help farmers?

Most governments in developing countries have tried to provide market information services to farmers, but these have tended to experience problems of sustainability. Moreover, even when they function, the service provided is often insufficient to allow commercial decisions to be made because of time lags between data collection and dissemination. Modern communications technologies open up the possibility for market information services to improve information delivery through SMS on cell phones and the rapid growth of FM radio stations in many developing countries offers the possibility of more localised information services. In the longer run, the internet may become an effective way of delivering information to farmers. However, problems associated with the cost and accuracy of data collection still remain to be addressed. Even when they have access to market information, farmers often require assistance in interpreting that information. For example, the market price quoted on the radio may refer to a wholesale selling price and farmers may have difficulty in translating this into a realistic price at their local assembly market. Various attempts have been made in developing countries to introduce commercial market information services but these have largely been targeted at traders, commercial farmers or exporters. It is not easy to see how small, poor farmers can generate sufficient income for a commercial service to be profitable although in India a new service introduced by Thomson Reuters was reportedly used by over 100,000 farmers in its first year of operation. Esoko in West Africa attempts to subsidize the cost of such services to farmers by charging access to a more advanced feature set of mobile-based tools to businesses.

What is USDA support?

USDA also provides support to agricultural marketing work at various universities. In the United Kingdom, support for marketing of some commodities was provided before and after the Second World War by boards such as the Milk Marketing Board and the Egg Marketing Board. These boards were closed down in the 1970s.

What is AMS in agriculture?

In the United States the Agricultural Marketing Service (AMS) is a division of USDA and has programs that provide testing, support standardization and grading and offer market news services.

What are the problems farmers face?

However, while they are able to identify such problems as poor prices, lack of transport and high post-harvest losses, they are often poorly equipped to identify potential solutions.

What is agricultural economics?

AGRICULTURAL ECONOMICS • Agricultural economics is an applied field of economics in which the principles of choice are applied in the use of scarce resources such as land, labour, capital and management in farming and allied activities. • Prof.

What are the objectives of farm management?

Farm management • Objectives – 1. To examine production pattern and resource use on the farm. – 2.To identify the factors responsible for the present production pattern and resource use on the farm. – 3. To determine the conditions of optimality in the resource use and the production pattern on the farm. – 4.

Where does the word “agriculture” come from?

AGRICULTURAL ECONOMICS • The word, agriculture comes from the Latin word ager, referring to the soil and cultura, to its cultivation. Agriculture, in its widest sense can be defined as the cultivation and /or production of crop plants or livestock products.

What is the definition of goods and services?

GOODS and SERVICES Economics is concerned with the production and distribution of goods and services Goods: It is defined as anything that satisfies human wants or needs Characteristic features of goods: 1. They are tangible in nature 2. They are the material outcome of production. 24.

What is agricultural marketing?

Agriculture, generally means growing and/or raising of crops and livestock while, marketing encompasses a series of activities involved in moving the goods from the point of production to point of consumption. Many scholars have defined agricultural marketing and incorporated essential elements of time, place, form and passion utility. Some of the definitions of agricultural marketing are given below;

Why is agricultural marketing important?

Agricultural marketing plays an important role not only in stimulating production and consumption, but also in accelerating the pace of economic development. It is the most important multiplier of agricultural development. In the process of shifting from traditional to modern agriculture, marketing emerges as the biggest challenge because of production surpluses generated by the shift. The importance of agricultural marketing is revealed from the following;

What is intermediary in agriculture?

Middlemen/intermediaries are those individuals or business concerns which specialize in performing various marketing functions and render services involved in the marketing of goods. The number of intermediaries may vary from one to many. They may be classified into five groups as follows;

How long are farm products perishable?

Most farm products are perishable in nature; but the period of their perishability varies from few hours to a few months. Their perishability makes it almost impossible for producers to fix the reserve price for their farm grown products. The extent of perishability of farm products can be reduced by processing function: but they can not be made non-perishable like manufactured products. The more perishable productsrequire speedy handling and often-special refrigeration, whichraises the cost of marketing.

What is the traditional system of marketing of agricultural products?

Under the traditional system of marketing of agricultural products, producer sellers incurred a high marketing cost, and suffered from unauthorized deductions of marketing charges and the prevalence of various malpractices. To improve marketing conditions and with a view to creating fair competition conditions, there is a strong need of market regulation.

Why is there no such problem in manufactured goods?

There is no such problem in manufactured goods because they can be produced of uniform quality.

How does agriculture help humans?

Agriculture fulfils the basic need of human kind by producing food. About a century ago, farmer used to produce food commodities mostly for self-consumption or for exchange with others (cash or kind) mostly in the same village or nearby places. They were primarily self-reliant. But,now production environment has changed considerably from self- reliance to commercialization. Technological advancement in the form of high yielding varieties, use of fertilizers, insecticides, pesticides, farm mechanization has led to a substantial increase in farm production and consequently the larger marketable and marketed surplus. The improved production is accompanied by the increasing urbanization, income, changing life style & food habits of the consumers and increasing linkages with the overseas market. Today consumers are not limited to rural areas where food is produced. Further, increasing demand for processed or semi-processed food products requires value addition in the raw agricultural produce. These developments require movement of food commodities from producer to consumers in the form of value added products. Agricultural marketing brings producers and consumers together through a series of activities and thus becomes an essential element of the economy. The scope of agricultural marketing is not only limited with the final agricultural produce. It also focuses supply of agricultural inputs (factors) to the farmers.

What is agricultural economics?

Agricultural economics, study of the allocation, distribution, and utilization of the resources used, along with the commodities produced, by farming. Agricultural economics plays a role in the economics of development, for a continuous level of farm surplus is one of the wellsprings of technological and commercial growth.

How does economic development affect the farm labor force?

That fundamental shift in the labour force is made possible, of course, by an enormous increase in output per worker as agriculture becomes modernized. That increase in output stems from various factors. Where land is plentiful, the output per worker is likely to be higher because it is possible to employ more fertilizer and machinery per worker.

What are the characteristics of peasant agriculture?

One characteristic of undeveloped peasant agriculture is its self-sufficiency. Farm families in those circumstances consume a substantial part of what they produce. While some of their output may be sold in the market, their total production is generally not much larger than what is needed for the maintenance of the family. Not only is productivity per worker low under those conditions, but yields per unit of land are also low. Even where the land was originally fertile, the fertility is likely to have been depleted by decades of continuous cropping. The available manures are not sufficient, and the farmers cannot afford to purchase them elsewhere.

What did the 19th century economists fear?

That fact would have surprised most economists of the early 19th century, who feared that the limited supply of land in the populated areas of Europe would determine the continent’s ability to feed its growing population. Their fear was based on the so-called law of diminishing returns: that under given conditions an increase in the amount of labour and capital applied to a fixed amount of land results in a less-than-proportional increase in the output of food. That principle is a valid one, but what the classical economists could not foresee was the extent to which the state of the arts and the methods of production would change. Some of the changes occurred in agriculture; others occurred in other sectors of the economy but had a major effect on the supply of food.

What is the agricultural market system?

Agricultural Market System. The agricultural produce that we consume daily reach to us after a long journey down the market system from its origin. The efficiency of this system has a direct impact on our everyday lives. The agricultural market system refers to the system through which agricultural products reach our tables, …

Why did the state intervene in the agricultural market system?

Under such conditions, the state had to intervene in the agricultural market system to improve its efficiency.

Why were markets regulated?

Firstly, markets were regulated to obtain transparent and orderly marketing conditions. Secondly, the provisions of improvement in transport infrastructure provided easier and new channels of connectivity. The separation of these areas was now starting to diminish.

How were farmers exploited in the pre-independence era?

In the pre-independence era, farmers were exploited by traders and middlemen, trapping them into selling their produce for low prices than the existing market rates. They were also victims of faulty weighing machines and wrong accounting. Moreover, they did not possess storage facilities making then unable to hold back their produce to sell at a better price in future.

What is agricultural economics?

Agricultural economics may be defined as applied social science, which deals with how mankind chooses to use technical knowledge and scarce productive resources such as land, labor, capital, and organization to produce food and fiber and distribute it for society’s consumption.

What are the characteristics of agricultural economics?

Land distribution system: Agricultural development depends on the proper land arrangement. The optimum size of land and fertile and plain lands are facilitated for agricultural production.

What is subsistence farming?

Subsistence farming: Subsistence farming is the main feature in developing countries. In this case, the land is not cultivated commercially. Instead, most of the farms are operated their land for subsistence purposes. So, we can say that apicultural economics is an important part of the economy of a country.

How to ensure modern land cultivation in developing and underdeveloped countries?

To ensure modern land cultivation in developing and underdeveloped countries, the agricultural economists suggest removing the unequal and unexpected land distribution system. 2. Supply of consumer goods: Agricultural production is considered the primary phase of consumer goods supply in society. The production activities …

Why is agriculture considered a primary sector?

Agriculture is considered as a primary sector to make the economy healthy in its d. Otherwise, the base of the industry cannot be strong. 6. Capital formation: Agriculture is considered a primary foundation of economic development in agricultural economics. So, the foreign currency is earned by exporting agricultural products, …

Who said that agriculture is a science?

Economist Frank Oragem says: Agricultural economics is a science that applies the techniques and principles of economics to agriculture. The agricultural economist applies the analytical models of economics to agricultural problems.

What is the economy of developing countries based on?

Labour employment: The economy of the developing countries is based on agriculture. Agricultural sectors have a huge opportunity to absorb illiterate and inefficient laborers. In this case, more labor can be employed by using small capital, which means the labor-capital ratio is very low. 5.

What is agricultural marketing?

Agriculture, in the broadest sense, means activities aimed at the use of natural resources for human welfare, i.e., it includes all the primary activities of production. But, generally, it is used to mean growing and/or raising crops and livestock. Marketing connotes a series of activities involved in moving the goods from the point of production to the point of consumption. It includes all the activities involved in the creation of time, place, form and possession utility. According to Thomsen, the study of agricultural marketing, comprises all the operations, and the agencies conducting them, involved in the movement of farm-produced foods, raw materials and their derivatives.

Why is it important to study the agricultural marketing system?

A study of the agricultural marketing system is necessary to an understanding of the complexities involved and the identification of bottlenecks with a view to providing efficient services in the transfer of farm products and inputs from producers to consumers.

What is processing in agriculture?

Processing is an important marketing function in the present-day marketing of agriculturalP commodities. A large proportion of farm products was sold in an unprocessed form. At present, consumers are dependent upon processing for most of their requirements.

How does WA marketing work?

WA well-knit marketing system widens the market for the products by taking them to remote corners both within and outside the country, i.e., to areas far away from the production points. The widening of the market helps in increasing the demand on a continuous basis, and thereby guarantees a higher income to the producer.

Why is marketing important for farmers?

The marketing system helps the farmers in the adoption of new scientific and technical knowledge. New technology requires higher investment and farmers would invest only if they are assured of market clearance.

How does an efficient agricultural marketing system contribute to the marketable surplus?

An efficient marketing system can also contribute to an increase in the marketable surplus by scaling down the losses arising out of inefficient processing, storage and transportation.

Where does the word “market” come from?

The word market comes from the latin word „marcatus  which means merchandise or trade or a place where business is conducted. Word „market has been widely and variedly used to mean (a) a place or a building where commodities are bought and sold, e.g., super market; (b) potential buyers and sellers of a product, e.g., wheat market and cotton market; Some of the definitions of market are given as follows: . A market is the sphere within which price determining forces operate.

What are the needs of farmers?

The needs of the farmers can be classified into three categories on the basis of time: (i) Short term. (iii) Long term. Short-term loans are required for the purchase of seeds, fertilizers, pesticides, feeds on fodder of livestock, marketing of agricultural produce, payment of wages of hired labour are classified according to the use and kind

What is the major share of pesticides consumption in India?

Insecticides account for the major share of pesticides consumption in India that includes both preventive treatments, which are applied before infestation levels are known, a implementation treatments which are based on monitored infestation levels and expected crop damages.

Why did moneylenders exploit poor farmers?

This was because there was no other source or from where the farmers could borrow money . Hence the moneylenders exploited the poor farmers. Thus, they used to charge exorbitant interest for their loans. The moneylenders used to manipulate their accounts and force the farmers to sell their produce to them at low price.

Does Rural Credit work directly with farmers?

It is an apex institution in the field of rural credit. Therefore it does not deal directly with farmers and other rural people. It grants credit to them through the cooperative banks, commercial banks, RRBs.


Agricultural Marketing – Basic Facilities For Farmers

  • In order to have best advantage in marketing of agricultural produce the farmer should enjoy certain basic facilities: (i) The farmer should have proper information about the future demand of a particular commodity in the market, so that he can plan earlier to sow the seeds of those cro

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Agricultural Marketing – Agricultural Research

  • Agricultural research is a vital input for planned growth and sustainable development of agriculture in the country. India had for the first time a record production of 202.5 million tonnes during 1998-99; the production of rice and wheat was 84.7 and 71.0 million tonnes respectively. With these production levels, India has emerged as the second largest producer of wheat and ric…

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Agricultural Marketing – Steps Taken For Improvisation

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