Top 10 Problems faced in Marketing Agricultural Goods
The difficulties encountered by the producers of agricultural goods, in marketing, have been explained below.
You may also refer to Various problems associated with agricultural production for further reading
1. Low marketable surplus of Agricultural goods
The number of small and marginal farmers is more in India. These farmers hardly produce for the market. The market, therefore, depends more on big farmers. The output of these few big farmers will have to reach different markets. The net result is that the quantity of agricultural goods available will be inadequate in relation to the demand.
2. Producer does not determine the price
In the case of consumer and industrial goods, it is only the producer who determines the basic price of the product. He is also sure of his margin.
In contrast to this, the producer of agricultural goods does not know the price at which his produce would be sold to the ultimate consumer. It is not something decided by the farmer. It is only the intermediaries who determine the final price in marketing agricultural goods. The grower, in fact, is not sure of his revenue also.
3. Lack of storage
Agricultural goods are easily perishable. Their production is also seasonal. But they are demanded throughout the year. This means that agricultural goods need to be stored in warehouses so that they can be made available at the right time in the market.
The farmers, who are the producers of agricultural goods, may not have their own storage facilities. This is in contrast to the situation in consumer and industrial goods marketing where the producers have their own warehouses.
Absence of storage forces the farmers to sell their produce at the earliest. Sometimes, they sell at a very low price in the market. Thus, the farmers, as the producers, get a very low or even no profit.
4. Problems in Transportation
Most of the villages in India do not have proper roads. The farmers, as a result, have to rely mainly on bullock carts and such other conventional mode to transport their agricultural goods. This leads to delay in the produce reaching the market.
Although trucks are increasingly used in transporting perishables, the cost of transportation is generally very high. As a result, the farmers get a very low return on their output.
5. Long chain of middlemen
Agricultural goods, perhaps, have the longest chain of middlemen. There are a number of intermediaries in the market like the wholesalers, brokers, commission agents, retailers and so on.
The agricultural goods pass through all these people before they reach the ultimate consumer. As it passes through each individual, the price increases. So, it is only the consumer who is finally made to bear the burden. Thus, the high price paid by the consumer does not reach the grower. It is pocketed only by the market intermediaries.
6. Malpractices in the market
In the market, the intermediaries indulge in a number of undesirable practices to make quick money at the cost of the producer and the consumer. The following are some such activities:
- Use of false weights and measurements.
- Black-marketing and hoarding and so on.
Such malpractices are considered a major problem in marketing agricultural goods.
7. Lack of Market Information
The producers of consumer and industrial goods get information from various sources both from within and outside the organization.
The availability of Internet now has given every industrialist an easy access to any information. The poor and illiterate farmers have no access to such methods of gathering information about the market for their agricultural goods.
8. Inelastic demand
The demand for agricultural goods is not influenced by a fall or rise in their price. As a result, the producer will suffer on account of fall in the price during bumper harvest.
9. Lack of Grading
Standardization enables the producer of consumer or industrial goods to get the right price for his products. Standardization has no relevance for agricultural goods. But they can be graded according to their size, shape and so on. But in the market, little importance is given for grading the produce and as a result the producer gets the same price for different varieties of goods.
10. Bulky nature
The bulky nature of agricultural goods necessitates packing. Otherwise, they cannot be taken to various market centres. This job has to be done manually and it involves labor. Gunny bags, bamboo baskets etc., are the materials used for packing.