Effective Marketing  System for Farmers

• Muhammad Rasheed
• Asif Maqbool

Information is significant to the social and economic activities that comprise the development process. Development economy has witnessed agricultural, industrial and information technology revolutions. Good communication system and information system reinforce commitments to sustainable productivity. 

Information system is a process that transforms data into information. When this information is further refined it acts as a basis for decision-making leading to the development of decision support system. Thus, strategic questions posed by researchers and policy makers in agriculture sector can best be answered by thorough and reliable exploration of related data. This is very essential in agricultural marketing system.

Market information is an important facilitating function in the agriculture marketing system. It facilitates marketing decisions, regulates the competitive market process and simplifies marketing mechanisms. Market information is a means of increasing the efficiency of marketing system and promoting improved price formation. It is crucial to the farmers to make informed decisions about what to grow, when to harvest, to which market produce should be sent and whether or not to store it. Improved information should enable traders to move produce profitably from a surplus to a deficit market and to make decisions about the viability of carrying out storage where technically possible.

In fact, marketing information plays a vital role in the functioning of the whole market, by regulating the competitive marketing process. By helping ensure that produce goes to markets where there is a demand for it, it shortens marketing channels and cuts down on transport costs. It helps ensure that each marketing transaction is a fair one, and that all participants share the risks and benefits. However, this does not happen if marketing information is distributed unequally, as is generally the case when many small-scale farmers in Pakistan are selling to a relatively few large-scale dealers. The farmers then end up bearing the greater part of the risk, while the dealers end up with the greater part of the profits.

Recent advances in information technology are making it more feasible to provide small-scale farmers with the marketing information they need. However, farmers may not benefit from sophisticated facilities, if the system is poorly managed or not designed for their needs. It is not enough for marketing information to be collected; it must also be disseminated in a form accessible to farmers and adapted to their needs.

The essential data of marketing information are price data. Agricultural price data are based on thousands or millions of transactions, many of them on a small scale, that are taking place every day all over the country. Collecting an adequate sample and making sure that these are representative enough to be useful is not an easy task. In many countries, the central government office is linked to numerous reporting stations in the provinces which report regularly on the local prices of a range of commodities. 

In developed countries, there is a well developed system of wholesale markets in towns and cities. It is the prices in these wholesale markets which provide the basic price data, collected and transmitted to head office by market officials as a normal part of their duties. The data is collected and transmitted by an on-line computer network. 

In the less industrialized countries, there are not many wholesale markets and a different system is used. In Pakistan, price information is based on surveys of both the farm gate prices and the prices paid by consumers, carried out regularly by designated farmers and dealers. The marketing information from these countries is usually collected and given preliminary processing at the reporting stations manually and transmitted to the head office by fax, radio, or telephone.

Each system has its basic difficulties. It is obviously much easier to collect price data from wholesale markets, where prices are being discovered openly and publicly during auction. However, there is the problem that wholesale markets charge fees, and farmers often try to avoid them and sell privately. These private sales may represent a considerable market share. Obviously they are distorting the accuracy of official price data, but nobody knows to what extent. In countries where wholesale markets are not well developed, most sales between farmers and dealers are taking place at the farm gate or in small markets. Since price discovery is occurring in a series of scattered, private transactions, the reliability of price data is a major concern.

Another major problem shared by both systems is that information about prices is not very useful unless quality is taken into account. Prices for good quality fruits and vegetables and preferred rice varieties may be more than double those paid for poorer quality foods. For farmers to be able to use price data, they need to be able to compare what has been sold with the produce they themselves are planning to market. This needs a uniform national grading system. National marketing information systems usually provide price information through the mass media, such as newspapers and radio. However, it is not clear how useful such information is likely to be to farmers.

In most marketing information systems, regional data is transmitted to a central national facility where it is processed and amalgamated with similar data from all over the country. The result is useful to those working for central government agencies, who need to know what is happening over the whole country. It is of less value to the farmers in the rural areas which provided the original data.

Recommendations for improving Marketing Information Systems

• Poor awareness of farmers on available market information clearly highlights the need to create awareness on market led extension among the farmers through the agricultural extension agencies. so that the marketing information on agriculture commodities are incorporated in the extension services along with production aspects to the farmers.

• Advanced information technology is suited to government collection and analysis of large quantities of
   data. It is of little relevance in terms of a direct information service for farmers, although it might be valuable if suitable intermediaries are used. Generally speaking, farmers benefit more from simple technology which communicates information in a lucid and relevant way. It should be noted that farmers are interested, not only in current price information, but also in marketing issues and news, and demand forecasts.

• There is wide price variation according to quality. Fruit and vegetable prices are particularly influenced by quality, including size. The lack of a uniform national grading system is a major constraint to the development of an efficient national marketing information service. 

• Farmers must be able to seek out and compare the information available for different outlets if they are to sell to best advantage. Price information is less useful if there is only a single market outlet, or if farmers are price takers rather than price seekers. Where there is a very wide gap between the farm gate price and the price paid in wholesale markets and by consumers, marketing information can help narrow the gap, but only as part of an efficient marketing system. 

• Farmers are interested mainly in prices in local markets where they sell their goods for efficient dissemination to farmers, market information services need to be decentralized, especially in remote areas where there are wide regional price differences. 

• There is a need to develop a system of market information utilizing the modern information communication techniques so that the farmers are provided with the required market information at the village itself so as to make appropriate decisions with respect to production and marketing plans including post harvest management storage, processing and sale of agriculture commodities.

• Farmers’ dependence on informal sources such as fellow farmers, friends and relatives for market information indicates the inability of formal sources in disseminating the required information to the farmers which calls for revitalizing the Market Intelligence System especially on dissemination aspects in public institutions like State Department of Agricultural Marketing, State Agricultural Universities etc. with modern communication technology.

• The existing marketing information is restricted to arrivals and prices. There is a need to cover other components of market information such as quality standards, post harvest management, storage, transportation, imports / exports apart from production scenario.

• Though the manpower and infrastructure was found to be a constraint in market information system, it can be overcome by policy changes. There is enough funds and trained manpower to improve upon the system.