In order to know more about agricultural marketing, let us discuss
how agricultural marketing activities are organized. This calls for a clear
understanding of types, structure and functionaries of agricultural
markets.
Classification of Markets
The various basis on which agricultural markets may be classified
are:
1. FrequencyOn the basis of the frequency at which the markets are held, they
can be classified as daily, weekly, fortnightly, etc.
2. Types of products tradedDifferent markets deal with different products. While some might
deal with all products, a few markets might specialize in some products.
On the basis of the type of product traded, they can be named as Grain
markets, Cotton markets, Fruit & Vegetable markets, etc. It is relevant to
quote ‘gur mandi, noon mandi etc.’ in Ludhiana and Amritsar. They
specialize in one single commodity only, although now-a-days they are
dealing with other products also.
3. Types of transactionOn the basis of their transactions, the agricultural markets can be
classified as spot and forward markets. The spot markets undertake
those transactions only in which the exchange is affected at the current
prices; while in the forward markets, the commodities are traded for
future delivery. The future markets resemble with the future trading
system of stock market.
4. Area ServedDepending upon the type of area served, the agricultural markets
can be classified as Local, Central, etc. The local markets cater to the
needs of only the local population, while the central markets are located
in the city center and cater to the needs of the entire city or the region.
The latter are much bigger in size and area of operation.
Other bases of classification
It may, however, be noted that there is no rigidity in these
classifications and one classification overlaps the other. However, for our
discussion, let us classify agricultural markets into primary, secondary
and terminal markets.
(1) Primary MarketsThese are periodical markets locally known as ‘Haats’. They are
generally held once or twice a week. The days on which these markets
meet are fixed so that traders can visit the area. They are generally held
in the open and along roadsides in important or centrally situated
localities.
These markets are situated in the producing areas and
commodities produced in the surrounding tracts are mainly sold in them.
A part of the produce is purchased by the small retailers who, further,
sell it to the non-farm rural population. During the lean season, a part of
the produce might be sold back to the cultivators themselves. The rest of
the produce is purchased by intermediaries and finds its way to the
wholesale market. Besides agricultural produce, a number of other
articles required by rural folk such as salt, tobacco, oils, gur, fruits and
vegetables, spices, cloth, hosiery products and ornaments of cheap
metals are also sold in these markets.
These markets usually serve an area of 10 kms radius but it may
be more, ranging from 10 to 50 kms, depending upon the availability of
communication and transportation facilities, nature of commodities
handled and the location of the market with respect to other markets.
The basic function of these markets is to serve as assembling
centres for the local produce but they also function simultaneously as
distributive centres for local consumption. Although, these markets are
unorganized, they do, serve the useful purpose of providing a common
meeting place for buyers and sellers.
In spite of being situated in rural areas, the prices ruling in these
markets are influenced by those prevailing in the wholesale markets.
(2) Secondary MarketsThese markets, also known as ‘Mandis’, are regular wholesale
markets and provide a permanent place for daily transactions. The work
starts in them early morning and continues till all transactions are over.
These markets are generally situated in the towns, districts, and
important trade centres. Usually they are situated near railway stations.
Shops or ‘Arhats’ are built in these markets. Postal, Banking and
telephone facilities are available at such places.
(3) Terminal MarketsA terminal market is the place where the produce is either finally
disposed of to the consumer or to the processor or assembled for exports.
Such markets are usually situated in metropolitan cities like Delhi,
Bombay, Madras and Calcutta etc. In these markets, merchants ere well
organised and use modern marketing methods.
how agricultural marketing activities are organized. This calls for a clear
understanding of types, structure and functionaries of agricultural
markets.
Classification of Markets
The various basis on which agricultural markets may be classified
are:
1. FrequencyOn the basis of the frequency at which the markets are held, they
can be classified as daily, weekly, fortnightly, etc.
2. Types of products tradedDifferent markets deal with different products. While some might
deal with all products, a few markets might specialize in some products.
On the basis of the type of product traded, they can be named as Grain
markets, Cotton markets, Fruit & Vegetable markets, etc. It is relevant to
quote ‘gur mandi, noon mandi etc.’ in Ludhiana and Amritsar. They
specialize in one single commodity only, although now-a-days they are
dealing with other products also.
3. Types of transactionOn the basis of their transactions, the agricultural markets can be
classified as spot and forward markets. The spot markets undertake
those transactions only in which the exchange is affected at the current
prices; while in the forward markets, the commodities are traded for
future delivery. The future markets resemble with the future trading
system of stock market.
4. Area ServedDepending upon the type of area served, the agricultural markets
can be classified as Local, Central, etc. The local markets cater to the
needs of only the local population, while the central markets are located
in the city center and cater to the needs of the entire city or the region.
The latter are much bigger in size and area of operation.
Other bases of classification
It may, however, be noted that there is no rigidity in these
classifications and one classification overlaps the other. However, for our
discussion, let us classify agricultural markets into primary, secondary
and terminal markets.
(1) Primary MarketsThese are periodical markets locally known as ‘Haats’. They are
generally held once or twice a week. The days on which these markets
meet are fixed so that traders can visit the area. They are generally held
in the open and along roadsides in important or centrally situated
localities.
These markets are situated in the producing areas and
commodities produced in the surrounding tracts are mainly sold in them.
A part of the produce is purchased by the small retailers who, further,
sell it to the non-farm rural population. During the lean season, a part of
the produce might be sold back to the cultivators themselves. The rest of
the produce is purchased by intermediaries and finds its way to the
wholesale market. Besides agricultural produce, a number of other
articles required by rural folk such as salt, tobacco, oils, gur, fruits and
vegetables, spices, cloth, hosiery products and ornaments of cheap
metals are also sold in these markets.
These markets usually serve an area of 10 kms radius but it may
be more, ranging from 10 to 50 kms, depending upon the availability of
communication and transportation facilities, nature of commodities
handled and the location of the market with respect to other markets.
The basic function of these markets is to serve as assembling
centres for the local produce but they also function simultaneously as
distributive centres for local consumption. Although, these markets are
unorganized, they do, serve the useful purpose of providing a common
meeting place for buyers and sellers.
In spite of being situated in rural areas, the prices ruling in these
markets are influenced by those prevailing in the wholesale markets.
(2) Secondary MarketsThese markets, also known as ‘Mandis’, are regular wholesale
markets and provide a permanent place for daily transactions. The work
starts in them early morning and continues till all transactions are over.
These markets are generally situated in the towns, districts, and
important trade centres. Usually they are situated near railway stations.
Shops or ‘Arhats’ are built in these markets. Postal, Banking and
telephone facilities are available at such places.
(3) Terminal MarketsA terminal market is the place where the produce is either finally
disposed of to the consumer or to the processor or assembled for exports.
Such markets are usually situated in metropolitan cities like Delhi,
Bombay, Madras and Calcutta etc. In these markets, merchants ere well
organised and use modern marketing methods.
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