AGRICULTURAL

MARKETING
THE GROWTH AND ROLE OF AGRICULTURAL MARKETING
TO ECONOMICS
Syllabus
 1.0 INTRODUCTION to
AGRICULTURAL MARKETING
 1.1 What is marketing?
 1.2 Marketing as the upgrade process of
value-add
 1.3 Subsistence Agriculture and
Commercial Agriculture Practice
 1.4 Growth and the Role of Marketing
 1.5 Food Marketing in the Economy
INTRODUCTION
 Agricultural Marketing: Concept and Definition
 The term agricultural marketing is composed of two
words-agriculture and marketing.
 Agriculture, in the broadest sense, means activities
aimed at the use of natural resources for human welfare,
i.e., it includes all the primary activities of production.
 Generally, it is used to mean growing and/or raising
crops and livestock.
 According to Thomsen, the study of agricultural
marketing, comprises all the operations, and the
agencies conducting them, involved in the movement of
farm-produced foods, raw materials and their derivatives.
1.2 Marketing as the upgrade process of
value-add

 Marketing connotes a series of activities

involved in moving the goods from the
point of production to the point of
consumption. It includes all the activities
involved in the creation of
 Time utility.
 Place utility.
 form utility.
 possession utility.
Marketing adds cost to the product; but, at the same time, it
adds utilities to the
product. The following four types of utilities of the product are
created by marketing:

(a) Form Utility: The processing function adds form utility to

the product by
 changing the raw material into a finished form. With this
change, the product becomes more useful than it is in the
form in which it is produced by the farmer.
(b) Place Utility: The transportation function adds place utility
to products by
shifting them to a place of need from the place of plenty.
Products command higher prices at the place of need than at
the place of production because of the increased utility of the
product.
(c) Time Utility: The storage function adds time utility to the
products by making them available at the time when they are
needed.
1.3 Subsistence Agriculture and
Commercial Agriculture Practice
Kohls and Uhl have classified marketing functions as
follows:

 1. Physical Functions :
 Storage and Warehousing
 Grading
 Processing
 Transportation

 2. Exchange Functions :
 Buying
 Selling
 3. Facilitative Functions
 Standardization of grades
 Financing
 Risk Taking
 Dissemination of Market
 Information
1.4 Growth and the Role of Marketing

 The agricultural sector has contributed to the growth and

major contributors to national income and export earnings.
 It‟s become basis of economic growth and main contributor
in national economy prior to the 1970s.
 The agricultural sector initially derived from the increase in
the production of livestock, fisheries, and other
miscellaneous crops.
 The agricultural industry more valuable cash crops owing to
the increase in earnings from major commodities such as
palm oil, rubber and food commodities.
 It has enabled the sector to retain its workforce and shore
up the economic downturn of the 1997 financial crisis.
ROLE OF AGRICULTURAL MARKETING TO
ECONOMICS

Backbone Of The Economy

 At independence, it contributed 39.3% to
GDP, generated 58.3% of a total
employment and about 50.0% to export
earnings.

 After independence, economy underwent a

diversification, so the contribution
declined.

 In 1980, still contributed 22.9% of total

GDP, 39.7 % to employment and less than
Helpful in Phasing out
Economic Depression
 In recent years, agriculture is
 During depression,
industrial production can
be stopped or reduced but
agricultural production
continues as it produces
basic necessities of life.  The increase in earnings of
 Thus it continues to
create effective demand
even during adverse
conditions of the
economy.
Diversifying And
Shielding The Economy
considered a vital sector to
the economy of Malaysia - it
play its role in diversifying
and shielding the economy
from external shock.
major commodities,
particularly palm oil and
pepper as well as food
commodities, enabled the
sector to retain its workforce
and withstand the economic
downturn of 1997-1998
Development To Rural
Areas.
 By promoting the
agricultural sector, we are
bringing development to
rural areas thus reducing
imbalance in urban-rural
development especially in
the less developed states.
Sources of Foreign
Exchange for the
country
 Most of the developing
countries of the world are
exporters of primary
products.
 If exports of agricultural
goods fail to increase at a
sufficiently high rate, these
countries are forced to incur
heavy deficit in the balance of
payments resulting in a
serious foreign exchange
problem
 Extension of Market for
Extension in Market Size Industrial Output

 A marketing system can become a

direct source of new technical
 The agriculture marketing use
knowledge and induce farmers to
to give some information and
adopt up to date scientific
knowledge to people to
methods of cultivation. As a result
encourage them for buying the
of agricultural progress, there will
agriculture product by
be extension of market for
advertising or promotion.
industrial products.
 If there is more output in  Increase in agricultural
agricultural sector due to farm
productivity leads to increase in
mechanization, it enlarges the
the income of rural population
size of market. If there is more
which is turn leads to more
production, then surplus
demand for industrial products,
production can be export to the
thus development of industrial
other countries of the world.
sector that can increase the
 So, agricultural sector expands percentage Gross Domestic
the market at national and Product for a country.
international level.
1.5 Food Marketing in the Economy
OTHERS…..
 This industry will be providing a lot of
job opportunity to the unskilled labor
in which will improve the income level of
people.
 Improved the role of transportation
for supply chain to operate more
efficiently and at the same time will
lower the cost of transaction.
 Improve the food security. It will
ensure the food supply for the whole
nation.