Farm Economic - Agri-Marketing

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Marketing, in agriculture, includes all the various activities involved in the transformation of commodities sold by farmers into food and fiber products purchased by consumers. The most obvious aspect of this transformation is a change in physical appearance or form. Form changing activities for agricultural commodities range from washing and grading apples to processing wheat into Wheaties. Another important marketing function is transportation. Agricultural commodities must somehow get from the farms where they are grown to the retail outlets where they are bought, in some cases moving across a country or half-way around the world. Time is another important aspect of marketing. Many agricultural commodities must be harvested at a specific time, but can be stored for later use and in some cases be consumed year-round. Finally, in a specialized economy, most consumers are not producers. Marketing involves the transfer of ownership or possession from those individuals who produce, ultimately, to those individuals who consume the food or utilize the fiber.

Market transformations change the value of commodities by changing their form, place, time, and ownership as they move through the marketing system. Each of these functions creates value but also adds an associated cost. Profits result whenever the value added by marketing functions such as processing, transportation, storage, or brokerage, is greater than the costs of performing those functions. These basic principles of marketing may seem simplistic; however, they are the fundamental concepts upon which vertical expansion of farming into marketing must be built.



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