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Reviewed by Omotolani Ajileye

Marketing of Agricultural Commodities

Marketing is the process of identifying customers’ needs and wants and making goods and services available to satisfy those needs. It involves all the activities carried out from the time a product is produced until it reaches the final consumer.

These activities include buying, selling, transportation, storage, advertising, packaging, pricing and distribution. In agriculture, marketing involves moving farm products such as maize, rice, cocoa, tomatoes and livestock from farmers to consumers or industries. Therefore, marketing helps to connect producers with consumers and ensures that goods are available at the right place, at the right time and at a suitable price. 

Agricultural commodities are farm products that are produced for sale, exchange, processing, or consumption. They include food crops such as maize, rice, yam, cassava and beans; cash crops such as cocoa, cotton, rubber, groundnuts and palm produce; and animal products such as meat, milk, eggs, hides and skins.

Agricultural commodities are important to the economy because they provide food for the population, raw materials for industries, employment and income for farmers and traders, and foreign exchange through exports.

They are usually sold through different channels, such as farmers, wholesalers, retailers and processors, before reaching the final consumers. Examples include cocoa being sold to a chocolate-processing company, cassava being processed into garri or flour, and cotton being supplied to textile industries.

Importance of Agricultural Marketing

1. It creates a market for farmers

Agricultural marketing provides farmers with a means of selling the products they have produced. A farmer may produce large quantities of maize, rice, cocoa, tomatoes or livestock, but production alone isn’t enough. The products must reach people who need them.

Through markets, traders, wholesalers, retailers, processors and other buyers, farmers are able to sell their produce and recover the money they invested in production.

2. It encourages increased agricultural production

When farmers know that there is a reliable market for their products, they are encouraged to produce more. If farmers can easily sell their crops at reasonable prices, they are more likely to invest in improved seeds, fertilisers, machinery and labour.

Therefore, an efficient agricultural marketing system can increase the quantity of food and raw materials produced in the economy.

3. It provides employment opportunities

Agricultural marketing creates employment for many people apart from farmers. People are employed as wholesalers, retailers, transporters, warehouse operators, market agents, processors, loaders and distributors.

For example, a farmer who produces tomatoes may depend on transporters to move the tomatoes to the market, wholesalers to buy them and retailers to sell them to consumers. All these activities create employment.

4. It improves farmers’ income

Effective marketing can help farmers obtain better prices for their products. When farmers have access to several buyers and reliable market information, they are in a better position to negotiate prices.

Good marketing also reduces unnecessary losses and allows farmers to sell their products in markets where demand is high. Higher returns can improve farmers’ standard of living and encourage them to expand their farms.

5. It reduces wastage of agricultural products

Many agricultural products are perishable and can spoil quickly if they aren’t sold, stored or transported properly. Marketing provides arrangements for the collection, transportation, storage and sale of these products.

For example, tomatoes, vegetables, fruits, milk and fish require quick movement from the farm to the consumer. Efficient marketing therefore reduces post-harvest losses and ensures that more of what farmers produce reaches consumers.

6. It provides raw materials for industries

Agricultural marketing helps industries obtain the raw materials they need for production. Farmers produce commodities such as cocoa, cotton, rubber, palm produce, cassava and groundnuts, which are used by different industries.

An effective marketing system moves these products from farms to factories. For example, cotton supplied through agricultural markets can be purchased by textile industries and processed into clothing materials.

7. It makes agricultural products available to consumers

Agricultural marketing connects producers with consumers. Farmers are often located in rural areas, while many consumers live in towns and cities. Marketing allows agricultural products to be transported from areas where they are produced to areas where they are needed. As a result, consumers can obtain food and other agricultural products without having to travel directly to farms.

8. It enables the distribution of agricultural products

Marketing helps to move agricultural products from places of surplus to places of shortage. For example, if a particular area produces more maize than its population can consume, traders can transport the surplus to another area where maize is in short supply.

This movement helps to make agricultural products more evenly available across different regions.

9. It provides information about prices and demand

Agricultural marketing provides farmers, traders and consumers with information about market conditions. Farmers can learn which products are in high demand, where they can obtain better prices and when it may be profitable to sell.

This information can help farmers make better decisions about what to produce and where to sell their products.

10. It encourages specialisation

An efficient marketing system allows farmers to concentrate on producing commodities for which they have the greatest advantage. A farmer in an area suitable for cocoa production, for example, can specialise in cocoa while depending on the market to obtain other goods. Specialisation can improve efficiency and increase overall agricultural production.

11. It promotes agro-processing and value addition

Agricultural marketing connects farmers with processing industries that convert raw agricultural products into more valuable products. For example, cassava can be processed into garri, flour or starch, while cocoa can be processed into cocoa products.

Processing increases the value of agricultural commodities, creates employment and can generate additional income for producers and businesses.

12. It generates government revenue

Agricultural marketing activities can generate revenue for government through taxes, levies, licences, market charges, export duties and other legitimate fees. This revenue can be used to provide public services and infrastructure such as roads, electricity, storage facilities and agricultural support programmes.

13. It promotes international trade

Agricultural marketing makes it possible for agricultural commodities to be sold outside the country. Products such as cocoa, cashew, cotton, rubber and sesame can be marketed to international buyers. Agricultural exports can earn foreign exchange for the country and contribute to economic growth.

14. It helps to stabilise the supply of agricultural products

An effective marketing system makes it possible to store agricultural products when supply is high and release them when supply is low. This can help reduce extreme shortages and maintain a more regular supply of food and raw materials throughout the year. Good storage and distribution are particularly important for seasonal agricultural products.

Summary

Marketing of Agricultural Commodities

• Agricultural marketing is the process of moving agricultural products from producers to consumers or industrial users.

• Examples of agricultural commodities: Cocoa, Cotton, Maize, Rice, Groundnuts, Palm oil, Rubber, Livestock, Fruits and vegetables

• Importance of agricultural marketing 

• Creates a market for farmers

• Encourages agricultural production

• Provides employment

• Improves farmers’ income

• Reduces wastage

• Provides raw materials to industries

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