Agricultural marketing functions are many and varied. The part
played by each function varies widely as regards to the specific goods and
services. It may further be noted that these functions ere indispensable
regardless of the institution or agency which performs them or the
commodity in connection with which they are performed. These functions
are closely related to each other and cannot be isolated from one another.
Accordingly, the functions of agricultural marketing can be classified into
three broad categories:
i) Exchange functions;
ii) Physical functions; and
iii) Facilitative functions.
(1) Exchange FunctionsExchange functions are considered to be the most important of all
the functions of agricultural marketing. These mainly include functions
related to buying and selling. Buying and selling are complementary to
each other and one cannot take place without the other. Buying function
is largely one of seeking the sources of supply, assembling of products
and activities which are associated with the purchase of goods, raw
materials-etc. Selling is the process which stimulates demand or desire,
finds the buyer, advises the buyer, and negotiates with him to bring
about a transfer of title.
(2) Physical FunctionsThese functions relate to the physical handling of agriculture
produce either in moving it from one place to another or in storing it over
a period of time. Agriculture produce has to be moved from threshing
floors to the consuming areas, because it is not consumed at the place of
its production. Then, on account of seasonal operations, agricultural
production cannot be undertaken at will. This can be done in a particular
season only under a particular set of conditions. On the contrary, the
demand for agricultural produce exists all the year round. Hence, there
must be some system by which the year’s, crop may be used throughout
the year. This requires extensive transportation and storage facility.
Storing operations may, however, take place anywhere along the channel
of distribution from production to consumption and it may be performed
by the producer, processor, distributor or even the consumer.
(3) Facilitative functionsAs the very name of these functions implies, they involve neither
transfer of title to goods nor handling of the product but help in the
smooth discharge of the above functions. The function of classification
and grading helps in classification and sorting out of commodities
according to size, quality colour, weight, etc. This makes the
determination of prices easy and thereby assumes a fair return to the
producer, on the one hand, and good quality produce to the consumer,
on the other, without any trouble to either. Then, there is always a time
lag between the assembling of commodities and their sale in the
consuming markets. During this period, somebody’s money remains tied
up in the stocks. This creates the problem of finance.
Further, the growing vastness between the place of production and
place of consumption has made the function of market information
invaluable. This function involves activities of collecting, interpreting and
disseminating market news to various agencies including producers
residing in the interiors of the country. This helps the government in
formulating policies and plans of production and marketing of good.
Lastly, no business can be done without undertaking the inherent risk
which may be caused either due to a decline in price, bad debts or
deterioration of the produce itself by fire, flood etc. These risks have to be
borne by someone in the channel. Physical risks may be covered under
insurance while risks stemming from price fluctuations are handled
through the hedging operation.
played by each function varies widely as regards to the specific goods and
services. It may further be noted that these functions ere indispensable
regardless of the institution or agency which performs them or the
commodity in connection with which they are performed. These functions
are closely related to each other and cannot be isolated from one another.
Accordingly, the functions of agricultural marketing can be classified into
three broad categories:
i) Exchange functions;
ii) Physical functions; and
iii) Facilitative functions.
(1) Exchange FunctionsExchange functions are considered to be the most important of all
the functions of agricultural marketing. These mainly include functions
related to buying and selling. Buying and selling are complementary to
each other and one cannot take place without the other. Buying function
is largely one of seeking the sources of supply, assembling of products
and activities which are associated with the purchase of goods, raw
materials-etc. Selling is the process which stimulates demand or desire,
finds the buyer, advises the buyer, and negotiates with him to bring
about a transfer of title.
(2) Physical FunctionsThese functions relate to the physical handling of agriculture
produce either in moving it from one place to another or in storing it over
a period of time. Agriculture produce has to be moved from threshing
floors to the consuming areas, because it is not consumed at the place of
its production. Then, on account of seasonal operations, agricultural
production cannot be undertaken at will. This can be done in a particular
season only under a particular set of conditions. On the contrary, the
demand for agricultural produce exists all the year round. Hence, there
must be some system by which the year’s, crop may be used throughout
the year. This requires extensive transportation and storage facility.
Storing operations may, however, take place anywhere along the channel
of distribution from production to consumption and it may be performed
by the producer, processor, distributor or even the consumer.
(3) Facilitative functionsAs the very name of these functions implies, they involve neither
transfer of title to goods nor handling of the product but help in the
smooth discharge of the above functions. The function of classification
and grading helps in classification and sorting out of commodities
according to size, quality colour, weight, etc. This makes the
determination of prices easy and thereby assumes a fair return to the
producer, on the one hand, and good quality produce to the consumer,
on the other, without any trouble to either. Then, there is always a time
lag between the assembling of commodities and their sale in the
consuming markets. During this period, somebody’s money remains tied
up in the stocks. This creates the problem of finance.
Further, the growing vastness between the place of production and
place of consumption has made the function of market information
invaluable. This function involves activities of collecting, interpreting and
disseminating market news to various agencies including producers
residing in the interiors of the country. This helps the government in
formulating policies and plans of production and marketing of good.
Lastly, no business can be done without undertaking the inherent risk
which may be caused either due to a decline in price, bad debts or
deterioration of the produce itself by fire, flood etc. These risks have to be
borne by someone in the channel. Physical risks may be covered under
insurance while risks stemming from price fluctuations are handled
through the hedging operation.
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