Production is incomplete until the products are in the hands of consumers. All activities involved between the time the product leaves the farm gate and the time it reaches the consumers are known as marketing.

Marketing activities include processing, transportation, storage, financing, and risk-bearing. Agricultural marketing is important as it enables products to reach consumers in the form and quality that maximize the utility of buyers.

Agricultural marketing has two components: “Marketing” and “Agricultural products,” both of which must be understood.

Definition of Marketing

Marketing can be defined in different ways depending on the context. Some simplistic definitions, such as describing marketing as merely “buying and selling,” capture only a part of the concept.

Others define marketing as the satisfaction of human needs and wants through the exchange process. For the purpose of agricultural marketing, it is defined as the series of human activities through which a product is exchanged between the producer and the consumer, satisfying the place, time, form, and possession desires of the consumer.

Key Elements of the Definition

Some key elements of the definition of marketing include:

1. Series of Activities: Marketing involves several functions, such as buying and selling, transportation, processing, storage, financing, risk-bearing, and market intelligence. These activities are essential marketing functions.

2. Product: There must be a product to be marketed, which could be a good or a service. Common agricultural products include cocoa, palm produce, by-products like hides and skin, gari, and yam flour.

3. Producer and Consumer: The marketing process always involves at least two parties. One party produces the product, while the other consumes it.

4. Satisfaction of Wants: Marketing ensures that the product reaches the consumer in the desired place, time, and form, fulfilling the consumer’s need to possess it.

5. Agricultural Products: These refer to commodities obtained from crop cultivation and livestock rearing, such as cocoa, groundnuts, rice, yams, cassava, poultry, sheep, goats, cattle, and pigs. Products derived from these commodities include gari, milk, hides, and skin.

The Structure of Agricultural Products Markets

Meaning and Importance of Agricultural Marketing

Markets for agricultural products are classified according to their structure, such as pure monopoly, duopoly, oligopoly, pure competition, or monopolistic competition. A monopoly market has only one seller and many buyers, allowing the seller to exploit the market.

In contrast, pure competition has many sellers and buyers, with no single party able to dominate. Most agricultural product markets resemble monopolistic competition, characterized by a fairly large number of sellers and buyers.

Monopolistic Competition

Monopolistic competition has the following characteristics:

1. Multiple Sellers and Buyers: There is a fairly large number of farms (sellers) and consumers (buyers).

2. Product Differentiation: The commodities are not homogeneous but are differentiated slightly. For instance, different brands of gari, such as “olo’nyo,” “iteko,” and “koko-gari,” or rice types like “aroso,” “agric,” and “ofada,” attract varying prices.

3. Close Substitutes: Agricultural products have close but not perfect substitutes. For example, cocoyam is a close substitute for white yams in the preparation of pounded yam, and sorghum can substitute maize in the making of pap.

4. Price Control: Each farm has limited control over prices and can set its own output and price policies without consulting others.

5. Free Entry and Exit: Farms can enter and exit the market freely.

6. Demand Response: The demand for the commodity changes in response to price shifts, though not as drastically as in pure competition, but more so than in monopoly.

Importance of Agricultural Marketing in Developing Countries

The objectives of an efficient agricultural marketing system in developing countries include:

Enabling primary producers to obtain the best possible returns for their products.
Providing facilities that allow farmers to sell all their produce at an incentivized price.
Reducing the price differentials between the primary producer and the ultimate consumer.
Ensuring that products of farm origin are available to consumers at reasonable prices without compromising the quality of the produce.

In many countries, especially less developed countries (LDCs), agriculture remains the largest single industry. Agriculture employs over fifty percent of the labor force in LDCs, while industry and commerce depend on it as a source of raw materials and as a market for manufactured goods. Therefore, the development of agriculture, along with the marketing systems, plays a central role in the economic growth of LDCs.

According to Dixie (1989), agricultural marketing aims to improve rural incomes in developing countries. Income inequality between rural and urban areas draws people away from agricultural production and places a significant strain on the infrastructure and social services of towns and cities.

This was evident in Nigeria during the 1970s when the discovery and exploitation of petroleum led to an urban job boom. As people abandoned agriculture, Nigeria, which had been a net exporter of many agricultural products, became a net importer. When global oil prices were high, the economy thrived and could sustain the food import bill.

However, as soon as oil prices fell, the food import costs became a serious burden. Nigeria could have avoided this scenario if incentives had been maintained for agricultural production, reducing the income gap between urban and rural areas.

Rural enterprises, including smallholdings, can significantly improve their earning potential by adopting a market-oriented approach and adding value to commodities. Value-added products typically carry higher margins than raw commodities.

Facilities Needed for Agricultural Marketing

To achieve the best advantage in marketing agricultural produce, farmers need to employ certain basic facilities:

1. Proper and Adequate Storage: Farmers should have access to appropriate storage facilities to preserve their produce.

2. Holding Capacity: Farmers should have the capacity to hold off sales until they can secure better prices, instead of disposing of products immediately after harvest when prices are low.

3. Transport Facilities: Access to affordable and reliable transport is essential for farmers to bring surplus produce to the market, rather than selling at low prices to village middlemen or merchants.

4. Market Information: Farmers should be equipped with up-to-date information on market conditions and prevailing prices to avoid being exploited by buyers.

5. Reducing Intermediaries: The number of intermediaries should be minimized to reduce middlemen’s profits and increase farmers’ returns.

Agricultural marketing plays a vital role in agribusiness, influencing the nature and marketability of agricultural products. Its importance lies in addressing the unique characteristics of agricultural products and ensuring their successful movement from producers to consumers.

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