Marketing agricultural products

Food production, mainly cereals such as sorghum, millet and maize in Africa, and rice in Asia, is generally the main source of income for the rural population. However, it must be got to market cheaply and at sold at a fair price, if the family is to meet its taxes, pay school fees, buy the food they cannot grow themselves and in general, meet the many emergencies that the poor have to face.

An adequate transport network from farm to market is crucial to efficient marketing structures. Products must get from the field to the household or village. Once consolidated into a viable load, a family member can bring it to one of the numerous small local markets, usually situated close to or often on a motorable road and hopefully at walking or cycling distance on good tracks and paths. Traders visit these markets or pick-up points and progressively build up a load sufficient to ensure a profit at a more distant market town. In some cases, if roads and weather permit, they will pick up at the farm itself. Alternatively, the farmer might choose to bypass the trader and either walk, cycle, or use whatever public transport there is to get to that market where he feels he will get the best price and at the same buy cheaply what he needs.

Taken from Design and Appraisal of Rural Transport Infrastructure, J. Lebo and D. Schelling, World Bank Technical Paper no 496

As shown above, a hierarchy of road types form the basis of crop and produce marketing systems. Rural road systems comprise the first three levels, from village to market town, and can often, if traffic levels are low and IMT common, link with larger towns, as simple earth roads shade into gravel ones. Generally, as roads approach centres of population traffic increases as does the average trip distance, dictating more robust roads. At the same time, the roads becoming more elaborate and expensive, responsibility for them necessarily shifts from the local community, through local government and finally to regional and central government. Normally, rural roads fall under community or local government control.

Underpinning all this transport activity is the natural desire of all parties to buy cheap and sell dear. Generally, prices increase as the number (and incomes) of buyers increases. Distance from the producer and the adequacy of the transport system are of course important factors. Lowest at the farm, they rise progressively at each market level, to meet the needs of consumers with diminishing time and space to grow their own. The prices of manufactured goods follow an inverse trend, thus providing a double advantage to the farmer who can bypass the trader and get to the town cheaply and rapidly, sell his produce and buy what he needs at lower prices. This requires some form of public transport as his load, if the journey is to be worth while, risks being too big to carry. Nevertheless, on market days, roads are crowded with people who may have carried or wheeled their 40kg loads fifteen km or more, as transport is too expensive or scarce.

At the same time transport costs increase more and more rapidly as we travel backwards on the table above from town to village. Roads worsen, especially in the rainy season. Truck operating costs increase as do overheads as loads become smaller and the risk of being held up for hours or days due to breakdown or closed roads increases. In some cases, marketing costs may become so high due to poor roads that imported food may become cheaper in the major urban areas, with disastrous consequences for rural towns and villages, not the least being flight to the cities.

The contribution of a good rural transport network to agricultural marketing is significant. A bad network, that is, with poor roads, inappropriate and infrequent vehicles, and thus little competition among traders, can result in low prices for farmers, high prices for urban consumers (who are not that well off themselves) and paradoxically, windfall profits for a small number of traders. For seasonal perishable products, such as fruit and vegetables, adequate roads are essential if they are not to rot in the fields. Furthermore, transport costs rise considerably during the rainy season if roads are bad. The farmer who has had to sell off most of his crop during the dry harvest season will have to buy some back at a far higher price towards the end of the next rainy season when stocks are low or cornered by speculators. Of course, he could in theory hold back as prices rise but by that time he might not be able to get it to market at all given the state of the roads. In any case needs for health care, school fees and so on are usually too pressing. Thus poor roads reinforce the dependence of farmers on traders, although it must be said in support of the latter that they provide an indispensable service in difficult conditions in rural areas.

It important to remember that markets are not just about buying and selling. Getting to market also means getting access to gossip, advice, useful information and of course the various products and services often only available in towns. Roads reduce isolation and the poverty associated with it.

Rural roads can never be better than just good enough. Networks are far too extensive, making up well over 90% of the total as can be seen above, when we include the simple tracks and paths that with the low-volume motorable roads make up the rural road network. However, the crucial role they play in the food marketing system requires that they be given more attention than at present. This means not only more investment, but also more attention to the points raised on this site so that it will not be wasted, as often happened in the past when rural roads were improved at vast expense, but without any improvement in mobility. The costs imposed by poor transport add a significant margin to the prices of basic foods and, by reducing its supply, further drives them up.


 

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