Role of Agricultural

Marketer
Date of Submission: March 22, 2015

Submitted to

Prepared by

Sharmin Afreen
Assist. Professor
Dept. of Agricultural Marketing
Faculty of Agribusiness Management

Krishna Kripa Ananda

Reg. No.: 11-04623
BBA in Agribusiness
Level-2, Semester-II
Faculty of Agribusiness
Management

Faculty of Agribusiness Management

Sher-e-Bangla Agricultural University

What is marketing?
Markets are the context, both physical and conceptual, where exchange takes place.
Marketing includes all activities from the producer to the final including processing and
distribution systems. The term producer includes farmers or pastoralists and the
manufacturers of production inputs when they produce the commodity being marketed. The
term consumer is used for anyone who is the final consumer of a product or the final user of a
production input (e.g. pastoralists may consume butter and veterinary inputs). The retailer is
the final link in the chain from producer to consumer. Hence, an urban butcher is a retailer
and so is a vaccinator in the government veterinary services who delivers a vaccination. The
wholesaler delivers the product to the retailer. The term farm gate is the location of a sale
where a farmer keeps his or her animals or produces his or her crop (i.e. on a farm in the case
of settled cultivators or at an encampment in the case of pastoralists). The terms market actors
and market agents are used interchangeably to represent any persons participating at any level
of the market.
The objectives of marketing vary. For the individual producer or consumer, the objectives
may be to maximize benefits from the resources available and to expand marketing
operations in order to increase wealth. From a societal viewpoint, the objectives may be to
encourage efficient allocation of resources, to create wealth and promote economic growth in
order to improve the general welfare of society. Important considerations may also be to
improve distribution of income between sectors of the economy and to maintain some
stability of supply and demand for marketed goods. The concurrence of marketing objectives
with national policy objectives identified in module 2 will be discussed later in this module.

What is agricultural marketing?

Concept and Definition
The term agricultural marketing composed of two words agriculture and 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 encompasses a series of
activities involved in moving the goods from the point of production to the point of
consumption. It includes all activities involved in the creation of time, place, form and
possession utility.
Philip Kotler has defined marketing as a human activity directed at satisfying the needs and
wants through exchange process.
American Marketing Association defined marketing as the performance of business activities
that directs the flow of goods and services from producers to users.

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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, such as textiles, from the farms to the final consumers, and the
effects of such operations on farmers, middlemen and consumers.
Agricultural marketing covers the services involved in moving an agricultural product from
the farm to the consumer. Numerous interconnected activities are involved in doing this, such
as planning production, growing and harvesting, grading, packing, transport, storage, agroand food processing, distribution, advertising and sale. Some definitions would even include
the acts of buying supplies, renting equipment, (and) paying labor", arguing that marketing
is everything a business does.[1] Such activities cannot take place without the exchange of
information and are often heavily dependent on the availability of suitable finance.
Marketing systems are dynamic; they are competitive and involve continuous change and
improvement. Businesses that have lower costs, are more efficient, and can deliver quality
products, are those that prosper. Those that have high costs, fail to adapt to changes in market
demand and provide poorer qualities are often forced out of business. Marketing has to be
customer-oriented and has to provide the farmer, transporter, trader, processor, etc. with a
profit. This requires those involved in marketing chains to understand buyer requirements,
both in terms of product and business conditions.

The role of marketing and trade in development

Marketing and trade play vital roles in the economic growth and overall development of a
nation. The major roles of marketing and trade in the national economy can be thought of in
terms of:
-

Specialization in activities of comparative advantage

Enhanced resource-use efficiency and trade
Advances in marketing with economic growth.

Specialization in activities of comparative advantage

Without market facilities, areas must maintain diversified activities to produce their own
food, shelter, tools and other needed goods. In the presence of a market, however, an
individual can specialize in one activity and sell the surplus in order to purchase other needed
goods. The individual is likely to specialize on the basis of a comparative advantage in that
activity for which he or she has some special resource or ability. A comparative advantage
exists when an individual or region can produce a good, relative to the price of other goods,
more cheaply than another individual or region. In livestock production, comparative
advantage is often the result of agro-ecological conditions particular to a region making it
suited to certain specialized activities. The agro-ecological basis for production results in
regional comparative advantage, whereby all of an area with that common agro-ecological
base shares the ability to produce the good relatively more cheaply than another area.
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Comparative advantage
Table: Production possibilities of beef and mutton for Countries A and B.
Proportion (%) of land devoted to
Beef

Mutton

100

Production ('000 t)
Country A

Country B

Beef

Mutton

Beef

Mutton

90

25

50

50

45

30

12

25

100

60

50

In this very simplistic example, countries A and B produce both beef and mutton. The two
countries have an equal amount of productive land. Country A, however, has more favorable
agro-ecological conditions than B for both mutton and beef. Table 5. 1 shows the relative
production potential of both countries for different proportions of land devoted to each product.
The trade-off ratio between beef and mutton for Country A is 3/2 (i.e. 90/60 under complete
specialization; 100% of land devoted to each) while for Country B it is 1/2 (i.e. 25/50). The
trade-offs for the two countries can be expressed as:
Beef

Mutton

Country A, 1 t

= 2/3 t

Country B. 1/2 t

=1t

Note that country A can produce more of either beef or mutton than country B. Thus, country A
has an absolute advantage for both beef and mutton over country B. However, when we
consider the trade-off ratios between beef and mutton for individual countries, we find that to
produce one tone of mutton, country A has to give up the production of 3/2 t of beef and Country
B only 1/2 t of beef. Therefore, Country B has a comparative advantage in the production of
mutton and Country A has a comparative advantage in the production of beef.
The important point is that both countries would benefit if they could trade with each other in the
item for which each has a comparative advantage.

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Figure: Production possibilities with and without specialization of trade for Countries A and B.
The figure further explains the concept of specialization and trade for beef and mutton for
Countries A and B. If we look at the total production of beef and mutton in the two countries, we
find four possible situations:
Total production
('000 t)
a. Countries A and B devote half of their land to each product 45 + 30 + 12
+ 25

= 112

b. Both countries specialize in beef 90 + 25

= 115

c. Both countries specialize in mutton 60 + 50

= 110

d. Country A specializes in beef and Country B in mutton 90 + 50

= 140

The largest amount of production results from each country specialising in the product for which
it has a comparative advantage. Both countries will, however, end up with more of one good
than they need and none of the other. So, for the benefits from comparative advantage to be
realized, trade must occur. Figure 1 illustrates that the largest production results at point C,
where both countries specialize and trade for one product only.
Specialized activities lead to trade. The gains from trade will be the value of additional
production made possible through specialization and trade. The exact gains from trade will
depend on the market prices of the goods with and without trade. This concept applies
equally to individuals, who use their comparative advantage to specialize in one task, selling
their products to trade for the other goods they need.

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Who is the Marketing agent/the Marketer?

First Known Use of MARKETER in 1787.
One that deals in a market; specifically: one that promotes or sells a product or service.
A person whose duties include the identification of the goods and services desired by a set of
consumers, as well as the marketing of those goods and services on behalf of a company.

Market actors are defined the roles they play, by the nature of their financing activities and
their responsibility to ownership (whether to a centralized public office, to a private purchaser
of the marketing: service or self-responsibility as in the case of independent private
enterprises). Actors in the market can choose between specializing in one activity or
integrating a number of activities into one enterprise in a vertical or horizontal manner. A
specialized enterprise can offer its customers more individual attention and provide the exact
quality and form of goods desired (e.g. local butcher). Thus, the roles of actors are often
difficult to separate. The roles of vertically-integrated actors are likely to overlap with those
of more specialized agents in the market. Figure 5.3 illustrates how the roles of market agents
can vary.

Figure: The varying roles of market agents.

Country buyers often carry out the initial task of assembling goods from dispersed farms or
local rural markets. These buyers may be farmers, shopkeepers, itinerant traders or some cooperative or government-buying agency.
The role of wholesalers is to transfer goods from producers or country buyers to retailers or
other wholesalers. Thus, their role may overlap with that of country buyers, in that they may
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deal directly with producers. They often finance the movement of goods themselves and
consequently bear the cost of marketing risks. In the African livestock trade, there is a
tendency for there to be a number of stages in the wholesale trade, as animals are assembled
into larger and larger herds for subsequent trekking to urban centers. To operate profitably,
wholesalers must be especially well-informed about current market prices and conditions,
since the costs of market risks increase with the number of stock being handled.
Commission agents may sometimes operate on behalf of wholesalers for a percentage of the
price paid. Although they act in the same way as wholesalers, the risk remains with the owner
of the goods. Brokers offering an intimate knowledge of the market act to bring buyers and
sellers together. In West Africa, livestock brokers also serve to enforce informal market rules
by monitoring transactions, assuring the integrity of each party in the transaction and
guaranteeing the negotiated price will be paid. Thus, they contribute in several ways to the
exchange functions by facilitating buying and selling, and reinforcing the informal system
which enforces contracts.
Processors transform the good either partially or completely into the form to be consumed. In
the African livestock trade, processing is often carried out on a large scale by government
agencies who also operate as wholesalers. They may also sell their processing services to
smaller traders.
Retailers present the good to the consumer in the manner, location and form desired. In the
case of livestock, they may also carry out processing activities (e.g. butchering).

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