FPI is working with its international partners to make effective interventions in a farm produce marketing system, both local and international, for the benefit of FPI membership. We have seen it necessary to define the types of marketing channels, their linkages and functions. The term linkage obviously implies a physical connection between the producer and the ultimate consumer. Linkages also involve financial transactions - the selling and buying of goods.
Our approach to market linkages includes tracking the farmers in the vicinity of the Farmers Development Centers and developing the tools and services to evaluate the impact on the farmers who are directly managed by us. Read More>>>
Market Linkage Activities
Identification of the farmer's products and linking them with commercial and institutional buyers.
Connecting farmers' organizations and buyers to the supply chain through the aggregation of service providers.
Facilitate the development and negotiation of contracts with buyers.
Educating and creating value through the development of packaging, branding and exposing farm output direct to the consumer market and commercial establishments.
Promoting good agricultural practices for the production of pesticide residue-free, quality food and linking the same to premium buyers.
Enhancing farmer entrepreneurship through market linkages.
Marketing channels often vary according to the type of agricultural produce. marketing, both for fresh produce and for semi-perishable produce such as grains, lentils and onions, is normally through markets. These can either be formal markets, set up by the central or local government, or informal markets, where trade has spontaneously developed. The main types of markets are described below.
Market Access Programme
The Market Access Programme sets out to strengthen the economic sustainability of smallholder and commercial producer farms by addressing upstream and downstream market access challenges across the value chain. Through this programme, the following services are delivered to farmers.
A diagnostic analysis of the selected farms or projects is conducted to identify gaps and/or areas of intervention.
Training and Capacity Building
Provide support to farmers to attend market readiness/access training and study tours (e.g., Fruit Logistica) based on skills and knowledge gaps offered to producers.
Support farmers to attend conferences e.g., the Making Markets Matter Conference.
FPI gives training on the Market linkage training programme and we are doing this after we saw a need for high quality and comprehensive agribusiness training programmes targeting small and medium-sized enterprises (SMEs) in emerging markets, particularly in Africa. This training programme, which brings together businesses from across the African continent, develops and implements capacity and network building programmes that put marketing principles, business strategies and research findings into practice.
Provide on-farm technical assistance/advice to deciduous fruit producers on a regular basis varying from weekly, bi-weekly and monthly visits depending on the individual grower’s needs.
Provide once-off on-farm technical training to producers of other commodities through outsourced commodity/product specialists based on the specific needs of the farmers.
Facilitation of Market Access/Linkages and Market Development
Facilitate market linkages between farmers and various markets e.g. processors, local supermarkets, municipal markets, hospitality, international markets, etc.
Potential linkages of producers with overseas markets are also supported through market development. Producers are also assisted with logistical arrangements.
Food Safety/Compliance with other countries
Support farmers to comply with international certification programme addresses basic food safety requirements which include traceability of fresh produce from the point of production to the retailer until it reaches the final consumer and record-keeping of all activities undertaken during the production of fresh produce, hygiene and responsible use of agrochemicals such as pesticides, fungicides and fertilisers. For more information on food safety, the certification programme contacts us.
Provide financial support for pre-audits to be conducted on farms.
Monitor producers (and provide support where possible) in addressing non-conformances.
Provide support for final audits.
Marketing/ brand promotion
Exhibitions/festivals, FPI offers local marketing exhibition initiatives in an attempt to promote local niche agricultural speciality products.
Other Business Development Services
Support in the development of marketing materials (e.g., banners, brochures, flyers, barcodes, labels, etc.)
Rural primary markets
The rural markets normally form part of the local trade network and are usually arranged on a periodic basis, on specific weekdays. They are commonly organized at a central place in a village or district centre or beside a village’s access road. In some instances, provincial and district-level markets also serve this function, as well as providing an assembly function (by combining produce in larger quantities for onward sale to outside buyers).
Terminal wholesale and semi-wholesale markets are located within or near major cities. If an urban population exceeds 0.5 million, some form of the wholesale facility is likely to develop. These centres may be supplied by purchasing/assembly centres in the rural areas or directly from farms, particularly those in peri-urban areas. The supply is either from agents, traders or by the farmers themselves. within wholesale markets, traders often handle the transactions and only larger producers deliver their own produce. Thus, the product after its arrival in an urban area often passes through a number of intermediaries, including retailers (see below) before it reaches consumers.
Other types of retail outlets
In many countries small retail shops, often termed “corner” shops and roadside stands provide produce close to consumers’ homes. Alternatively, with very low-density urban areas mobile shops or stalls may supply consumers. These retailers usually purchase their produce from wholesale markets, although in some cities there are many small hawkers, operating from bicycles or small carts, which provide retailers with small quantities of produce or sell directly to consumers. In Kathmandu, for example, hawkers account for more than 25 percent of the produce outflow from the wholesale markets.
Larger rural markets occur where greater quantities of produce are traded, either by the producers themselves or by traders. These “assembly” markets, which are often combined with local rural or town markets, are normally situated on main highways, near to local transport interchange points. Traders, collectors and commission agents, acting on behalf of urban wholesalers are the main buyers of produce at these markets.
These are markets directly serving consumers. Although primarily retail, they may have a semi-wholesale function, particularly if they allow farmers to trade in them. In that case, they are often called farmers' markets. This form is very typical in developing countries, but there has also been a strong trend in the USA, the UK and other parts of Europe to create farmers' markets for the sale of specialized products, such as organically grown fruits and vegetables.
The rapid growth of supermarkets in developing countries is having a significant impact on shopping habits. however, the degree to which supermarkets have had any major effect on the marketing of fruits and vegetables, or on fresh meat, varies significantly. In Latin America and the middle east supermarkets dominate the trade in fresh produce, but this is less apparent in Asia or Sub-Saharan Africa, where supplies from traditional markets continue to be very important.
Conventional marketing intermediaries:
Conventionally, the most common intermediaries are:
Petty traders and assemblers are specialized middlemen that purchase produce from farmers at the farm gate or local market, for sale to other traders, wholesalers and retailers. They may use their own transport or hire from a transporter.
Independent collectors and commission agents take possession of produce from an individual or group of farmers and then sell the produce to a wholesaler, market trader or other middlemen. for providing these services the collector (or commission agent) normally charges a percentage of the final sales price.
Market agents are linked to specific markets who sometimes also act as brokers for wholesalers or as auctioneers at the market.
Wholesalers and semi-wholesalers, located in markets or independent facilities, who may also function as retailers.
Retailers, who buy either directly from farmers, from traders or wholesale markets, and sell the products to consumers through retail outlets.
Other types of marketing intermediaries:
FPI will organise contract buying for its members, working with food processors and wholesalers, who will make an advance contract with our member farmers clusters/groups. Some of these buyers will provide seeds and extension advice to our membership, sometimes credit, and also guarantees to procure the produce at harvest at an agreed price. Our member farmers will develop a long-term relationship with processing companies who will provide inputs. when the crops are ready for sale, they will purchase them from the farmers at the prevailing market price or at a previously agreed price.