Agricultural Central Trading Limited ACT ist ein landwirtschaftliches Unternehmen, das landwirtschaftliche Betriebe in ganz England, Wales und Schottland liefert. Unsere beträchtliche Kaufkraft, verbunden mit unseren niedrigen Betriebskosten, bedeutet, dass wir den Landwirten erhebliche Einsparungen bei den beliebten Markenprodukten sowie denjenigen zukommen lassen können, die wir unter unserem eigenen Label 8216Action8217 verkaufen. Bei der Auswahl von Produkten, die den Bedürfnissen unserer Kunden gerecht werden, ist das übergeordnete Ziel von ACT, ein gutes Preis-Leistungs-Verhältnis zu bieten. Das bedeutet, genaue Aufmerksamkeit auf Qualität sowie Preis. Jedes Jahr ACT liefert Landwirte von Cornwall zu den Orkneys mit Millionen von Pfund wert von wesentlichen Inputs. So warum don8217t Sie an den Tausenden der Landwirte, denen wir geholfen haben. Sie don8217t müssen Mitglied werden, aber Sie müssen ein Handelskonto eröffnen. Und diejenigen, die Aktionäre werden, profitieren von einem Anteil unserer Gewinne, die jedes Jahr an unsere Kundenaktionäre zurückgegeben werden. Um mehr über unsere Produkte zu erfahren oder ein Konto zu eröffnen, rufen Sie uns unter der Rufnummer 08000 275 276 an. Linien geöffnet von 8.45am - 5pm Montag bis Freitag. Aktuelle Nachrichten von ACT Winter News Letter Der Winter 2016 Action Update News-Brief ist jetzt zum Download von dieser Website KAPITEL 1 Agricultural And Food Marketing Als Individuen innerhalb einer Gesellschaft werden mehr spezialisiert auf ihre wirtschaftlichen Aktivitäten, sie kommen auf andere verlassen, um mindestens liefern Einige der Produkte und Dienstleistungen, die sie benötigen. So beginnt ein Austauschprozess zwischen Käufern und Verkäufern. Für eine Weile Käufer und Verkäufer bleiben in unmittelbaren Kontakt und jede Partei ist in der Lage zu bestimmen, was die anderen Bedürfnisse und Werte und ist daher bereit zu tauschen. Da die Wirtschaft die Zahl und die Arten des Austausches erweitert, besteht ein gleichzeitiger Bedarf an zunehmend spezialisierten Marketing-Dienstleistungen wie physikalische Verteilung, Lagerung, Sortierung, Marktinformationserfassung und so. Die Zahl der Teilnehmer erhöht sich auch mit vielen der spezialisierten Dienstleistungen, die von Vermittlern zwischen dem Verkäufer und Endkäufer zur Verfügung gestellt werden. Nur wenige Käufer und Verkäufer sind in direktem Kontakt miteinander und die Kommunikation zwischen ihnen ist durch ein komplexes Marketing-System geleitet. Dieses einleitende Kapitel widmet sich der Erforschung der Natur von Marketing - und Marketing-Systemen. Dieses Kapitel soll dem Leser helfen: Die Bedeutung des Marketings für die Agrar - und Ernährungswirtschaft in den Entwicklungsländern Die Bedeutung des Marketingkonzepts Warum es notwendig ist, das Marketingkonzept in Lebensmittel - und landwirtschaftlichen Marketing-Systemen umzusetzen Die Funktionen des Marketings und Die Modi der Betrieb von einigen der wichtigsten Arten von Agrar-und Lebensmittel-Marketing-Unternehmen Die Eröffnung Abschnitt verfolgt und Argument, warum Marketing ist von zunehmender Bedeutung für die Lebensmittel-und Agrarsektoren in den Entwicklungsländern. Dies führt zu einer Erklärung des Konzepts der Vermarktung. Die Art der Marketing-Systeme wird auch diskutiert. Darauf folgt eine Beschreibung der wichtigsten Marketingfunktionen und Vorschläge, wie diese kundenorientiert umgesetzt werden können. Es werden dann die Veränderungen berücksichtigt, die die Entwicklung in die Nahrungsmittelindustrie der Entwicklungsländer und die Folgen für die Landwirtschaft als Lieferant von Rohstoffen für diese Industrien mit sich bringt. Der Rest des Kapitels widmet sich einem Überblick über die Operationen der wichtigsten Formen des Agrar - und Lebensmittelmarketing-Unternehmens, die in den Entwicklungsländern zu finden sind. Neben dem privaten Unternehmen werden die Aktivitäten von Marketing-Boards und Genossenschaften diskutiert. In vielen Ländern und nahezu allen weniger entwickelten Ländern (LDC) ist die Landwirtschaft die größte Einzelindustrie. Die Landwirtschaft beschäftigt in der Regel über fünfzig Prozent der Erwerbsbevölkerung in den LDCs, wobei Industrie und Handel davon abhängig sind als Rohstoffquelle und als Markt für Fertigwaren. Daher argumentieren viele, dass die Entwicklung der Landwirtschaft und die Marketing-Systeme, die auf sie treffen, das Herzstück des wirtschaftlichen Wachstums in den LDCs sind. Darüber hinaus verweist der Verbraucher, wie Kriesberg 1 in LDCs hervorhebt, häufig über fünfzig Prozent des Einkommens der Haushalte für Grundnahrungsmittel aus, was in hohem Maße sowohl hinsichtlich der Qualität als auch des Nährstoffgehaltes unzureichend ist. Im Gegensatz dazu geben die Amerikaner etwa zwölf Prozent ihres verfügbaren Gesamteinkommens aus. In Westeuropa reicht die Zahl von etwa sechzehn bis neunzehn Prozent des verfügbaren Einkommens. Während in den entwickelten Ländern die Armen relativ wenig an Zahl sind und daher es wirtschaftlich möglich ist, spezielle Nahrungsmittelverteilungsprogramme aufzustellen, um ihren Bedürfnissen gerecht zu werden, ist das Ausmaß der Armut in den meisten LDC so, dass das kommerzielle Marketing-System angewiesen werden muss Führen Sie die Aufgabe der Verteilung von Lebensmitteln an arme und nicht-so-arme gleichermaßen. Dies ist so, ist es zwingend erforderlich, dass das Marketing-System effizient arbeitet. Die ökonomische Entwicklung selbst ist der Impuls für anspruchsvollere und effizientere Marketing-Systeme. Dixie 2 schlägt vor, dass, da Länder das Wirtschaftswachstum erleben, ihre Rate der Verstädterung tendenziell stark zunimmt. Während das Bevölkerungswachstum in den Entwicklungsländern im Durchschnitt etwa drei Prozent pro Jahr beträgt, erhöhen ihre Städte und Gemeinden ihre Bevölkerung mit etwa vier Prozent pro Jahr. Im Wesentlichen bedeutet dies, dass sich die Zahl der Menschen in städtischen Gebieten, die von den Landbewohnern gefüttert werden müssen, innerhalb von sechzehn Jahren verdoppeln wird. Dies hat klare Auswirkungen auf die landwirtschaftliche Produktion und die Vermarktungssysteme, die diese Produktion leiten und die Produktion an die Verbrauchspunkte verteilen. Die Subsistenzwirtschaft wird wahrscheinlich an Bedeutung verlieren, da die Landwirte auf die erhöhten Chancen reagieren, die die Entwicklung und die Verstädterung bewirken, dass die landwirtschaftlichen Betriebe ihre Zahl verringern werden, während die Größe zunimmt und die Landwirtschaft wahrscheinlich weniger arbeitsintensiv und kapitalintensiver wird. Dixie unterstreicht auch den potenziellen Beitrag des Agrar - und Lebensmittelmarketings zu Versuchen, die ländlichen Einkommen in den Entwicklungsländern zu verbessern. Die Ungleichheit der Einkommen zwischen den ländlichen und städtischen Gebieten zieht die Menschen weg von der landwirtschaftlichen Produktion und legt großen Wert auf die Infrastruktur und die sozialen Dienste der Städte eines Landes. Nirgends wurde dies dramatischer gezeigt als in Nigeria, als Erdöl in den 70er Jahren entdeckt und dann ausgenutzt wurde. In den städtischen Gebieten entstand eine große Zahl von Arbeitsplätzen, und die Menschen verließen die landwirtschaftliche Produktion in großer Zahl. Nigeria wurde ein Nettoimporteur von vielen landwirtschaftlichen Produkten, von denen es früher ein Nettoexporteur gewesen war. Für solange der Weltpreis für Erdöl blieb hoch die Wirtschaft gedieh und konnte sich die Nahrungsmittelimportrechnung leisten. Jedoch, sobald der Weltpreis für Öl fiel, wurde die Nahrungsmittelimportrechnung eine ernste Last. Nigeria hätte dieses Szenario nur vermieden, wenn es in der Lage gewesen wäre, die Menschen zu motivieren, in der Landwirtschaft fortzufahren, und dies wäre nur möglich gewesen, wenn das Ungleichgewicht zwischen städtischen und ländlichen Einkommen verringert worden wäre. Ländlich gegründete Unternehmen, darunter Kleinbetriebe, können ihr Ertragspotenzial durch eine Marktorientierung erheblich verbessern. Sie können ermutigt werden, Wert zu Rohstoffen hinzuzufügen, indem sie zu ihrem Nutzen addieren. Wertschöpfung Produkte haben in der Regel eine höhere Marge als Rohwaren. Eine weitere Entwicklung, die in jüngster Zeit das Interesse an Marketingpraktiken erhöht hat, ist der Trend in vielen Entwicklungsländern zur Marktliberalisierung im Rahmen der Wirtschaftsstrukturanpassungsprogramme (ESAP). Die Ansicht, dass direkte und indirekte staatliche Beteiligung an Produktion und Vertrieb strukturelle Verzerrungen in den Volkswirtschaften herbeigeführt haben, ist weithin akzeptiert worden. Maßnahmen zur Korrektur dieser Verzerrungen umfassen eine Rückkehr zu den Marktpreisen für alle Produkte und Ressourcen, die Förderung eines wettbewerbsorientierten Privatsektors und die Kommerzialisierung und manchmal die Privatisierung aller oder einiger Funktionen des Vermarktungsparastatals. All dies erfordert ein besseres Verständnis der Marketingpraktiken und - prozesse innerhalb des Landes, die ESAP, im Allgemeinen und in den betroffenen landwirtschaftlichen Vermarktungsparastatalen, insbesondere betroffenen, durchführen. Bisher wurde diese Diskussion im Zusammenhang mit kommerziellem Marketing gesetzt, aber auch das soziale Marketing sollte anerkannt werden. Social Marketing identifiziert menschliche Bedürfnisse in nicht-wettbewerbsfähigen Volkswirtschaften und Sektoren der Gesellschaft und definiert die Mittel zur Bereitstellung von Produkten und Dienstleistungen, um diese Bedürfnisse zu erfüllen. Der Marketing-Mix von Social-Marketing-Strategien wird mit ganz anderen Kriterien von denen bei der Beurteilung rein kommerziellen Marketing-Strategien bewertet. Kriterien wie der prozentuale Anteil der Zielgruppe, die mit der Technologie, Produkten, Prozessen oder Dienstleistungen erreicht werden, die produzierten Mengen und die Verteilung und die Aufnahme des Produkts, Dienstes oder der Technologie werden häufiger angewandt. Die Leistungen werden an den Entwicklungszielen gemessen, wie zum Beispiel verbesserter Ernährungsstatus oder erhöhte ländliche Einkommen. Die Verwendung von ökonomischen Kriterien ist in der Regel auf diese begrenzt und die Auswahl der kostengünstigsten Strategie, um ein quantitatives Ziel zu erreichen. Allerdings sollten die Kriterien für die Bewertung kommerzieller Marketingstrategien nicht automatisch beseitigt werden, da diese die Effizienz einiger Aspekte der Social-Marketing-Strategie verbessern, ohne die Erreichung sozialer Ziele zu verhindern. Marketing ist nicht einfach eine Erweiterung des Produktionsprozesses, sondern sein einziger Zweck, wie Adam Smith betonte, als er in seinem Text The Wealth of Nations (1776) sagte: ldquoConsumption ist der einzige Zweck der gesamten Produktion und das Interesse der Produzent sollte nur so weit besucht werden, wie es für die Förderung der des Verbrauchers notwendig sein kann. rdquo Dixie 2 bezieht sich, was er als Definition des Marketings beschreibt, die ist: ldquoThe Reihe von Dienstleistungen, die beim Bewegen eines Produktes (oder einer Ware) Der Punkt der Produktion zum Punkt des Verbrauchs. Dies ist eine Definition, die viele Organisationen und Regierungen als ihre eigenen Tätigkeiten im Warenmarketing beschreiben würden. In vielen Entwicklungsländern beschreibt sie in der Vergangenheit, oder in einigen Fällen, die Funktionen, die durch die Vermarktung von Parastatalen in Bezug auf Grundnahrungsmittel ausgeführt werden. Wie Dixie selbst jedoch hervorhebt, lassen die Definitionen zwei Schlüsselelemente jeder Definition der Marketingproduktion aus, um das Marketingkonzept, d. h. eine Kundenorientierung und eine eingebaute Nachhaltigkeit, zu verwirklichen. Gaedeke und Tootelian 3 bieten eine alternative Definition, die die Probleme, die durch diese beiden Auslassungen verursacht werden, überwindet: ldquohellip eine Managementorientierung, die alle Aktivitäten der Organisation auf die Befriedigung der Kundenbedürfnisse und - wünsche fokussiert und damit dazu beiträgt, die Organisationen langfristige Ziele zu erreichen Eine Kundenorientierung, und da die langfristigen Ziele der Organisationen ihre eigene Existenz einschließen, berücksichtigt sie die Notwendigkeit der Nachhaltigkeit. Darüber hinaus schließt diese Definition des Vermarktungskonzepts keine gemeinnützigen Organisationen aus. Marketing ist für Entwicklungsprojekte, Hilfsorganisationen, Erweiterungsdienstleistungsorganisationen und dergleichen ebenso relevant wie für kommerzielle Unternehmen. So ist das Marketing-Konzept, dass eine Organisation ihre Ziele durch die Bereitstellung von Kundenzufriedenheit erreicht. Setzen Sie einen anderen Weg, Marketing ist die integrative Kraft, die Produktion auf Kundenbedürfnisse und Zufriedenheit übereinstimmt. Marketing ist keine Aktivität, zu der eine Organisation ihre Aufmerksamkeit am Ende der Produktionsphase wendet. Vielmehr Marketing muss die Produktion in Übereinstimmung mit klare Signale aus dem Markt als das, was von Kunden benötigt wird. Das Marketing-Konzept muss nicht nur die gesamte Organisation, sondern das gesamte Marketing-System angenommen werden. Ein System ist ein Komplex von miteinander verknüpften Komponenten oder Teilsystemen, die ein definiertes gemeinsames Ziel haben. So umfasst eine landwirtschaftliche und Lebensmittel-Marketing-System umfasst alle Funktionen und Agenturen, die diese Tätigkeiten durchführen, die notwendig sind, um gewinnbringend nutzen Chancen auf dem Markt. Jede der Komponenten oder Untersysteme ist voneinander unabhängig, aber eine Änderung in irgendeinem von ihnen wirkt sich auf die anderen wie auch auf das System als Ganzes aus. Es besteht die Gefahr, dass das Marketingkonzept von einigen Teilen des Systems übernommen wird, aber nicht von anderen. So kann beispielsweise ein Lebensmittelhersteller versuchen, das Marketingkonzept umzusetzen und Produkte anzubieten, die die genauen Bedürfnisse eines Zielmarktes erfüllen. Wenn jedoch der Hersteller sich auf eine noch sehr produktionsorientierte Landwirtschaftsgemeinschaft für Rohstofflieferungen verlassen muss, dann können die allgemeinen Marketingziele vereitelt werden. In der gleichen Weise, wenn nur einige Funktionen nach dem Marketing-Konzept durchgeführt werden, dann das System als Ganzes kann nicht eine Marktorientierung zu erreichen. Beispielsweise kann die Marketingabteilung den Markt für qualitativ hochwertige Obst - und Gemüsesorten anbieten, für die sie Prämienpreise erhalten kann, aber wenn der Transport mit denselben offenen Massengutträgern durchgeführt wird, die zur Beförderung von Getreide und anderen Zuschlagstoffen verwendet werden Dann ist es unwahrscheinlich, dass das Unternehmen das Produkt in der richtigen Bedingung für den Zielmarkt liefern wird. Abbildung 1.1 Alternative Geschäftsphilosophien Die Lehre aus all dem ist ganz einfach. Wenn die Entscheidung getroffen wurde, das Vermarktungskonzept zu übernehmen, müssen die Implikationen für jeden der Teilnehmer und die Funktionen innerhalb des Vermarktungssystems berücksichtigt werden. Wenn ein oder mehrere Elemente des Systems anders als marktorientiert sind, muss entweder eine Änderung der Marketingphilosophie in diesen Elementen eingeführt werden oder eine Änderung in der Konfiguration des Marketing-Systems erfolgen. Rosson 4 konzipiert landwirtschaftliche und Lebensmittel-Marketing-Systeme, bestehend aus 4 Haupt-Sub-Systeme Produktion, Vertrieb, Verbrauch und Regulierung. Abbildung 1.2 Die Subsysteme eines Marketing-Systems Die wichtigsten Akteure in der Kette von Aktivitäten, die Lebensmittel und Landwirtschaft verbinden, sind der Landwirt (oder andere lsquoproducersrsquo wie Fischer), Vermittler, Lebensmittelverarbeiter und Verbraucher. In der Praxis sehen sie das landwirtschaftliche Lebensmittel-Marketing-System aus einer Perspektive des Eigennutzes und diese Interessen sind manchmal in Konflikt. Beispiele für einige der typischerweise auftretenden Konflikte finden sich in Tabelle 1.1. Tabelle 1.1 Interessenkonflikt bei landwirtschaftlichen Lebensmittelvermarktungssystemen Geringer Kaufpreis, hohe Qualität Das Interesse der Landwirte ist darauf ausgerichtet, die beste Rendite aus seinem Erzeugnis zu erhalten, was in der Regel dem Höchstpreis für unbegrenzte Mengen entspricht. Die Hersteller wollen möglichst kostengünstige, beste Qualität aus dem Landwirt, so dass er es zu wettbewerbsfähigen, aber profitabel, Preise zu verkaufen. Händler und Einzelhändler wollen hohe Qualität und zuverlässige Lieferungen vom Hersteller oder Landwirt, zu den wettbewerbsfähigsten Preisen. Die Verbraucher sind daran interessiert, qualitativ hochwertige Produkte zu niedrigen Preisen zu erhalten. Offensichtlich gibt es hier widersprüchliche Interessen. Fall 1.1 Venezuela wird durch Elefanten überrannt Es wird gesagt, dass, als ein älteres Mitglied seines Hofes ihn ernstlich mißfiel, der König von Siam diese Person ein Geschenk eines weißen Elefanten bilden würde. Der weiße Elefant ist selten und wird in Siam als heilig betrachtet. Die Siam-Tradition ließ es nicht zu, daß weiße Elefanten gearbeitet wurden und so der unglückselige Besitzer keinen wirtschaftlichen Gewinn aus dem Besitz dieses heiligen Tieres machen konnte. In der Tat, Besitz eines weißen Elefanten führte in der Regel zu finanziellen Ruin, da der Besitzer musste das heilige Tier auf einer speziellen Diät zu ernähren und Elefanten neigen dazu, eher einen großen Appetit haben. In den 1970er Jahren investierte Venezuela US20 Millionen in 6 Maniokverarbeitungsbetriebe mit dem Ziel, die bereits lokal angebaute Manioka zu dehydratisieren und als Zutat für Futtermittel zu verwenden. Die Absicht war, das lokale Produkt für 21.600 Tonnen importierte Getreide (hauptsächlich Mais und Sorghum) zu ersetzen und mehr als 600 Arbeitsplätze zu schaffen. Darüber hinaus könnte Manioka marginale Länder in die Produktion bringen, da diese Ernte auf Böden gedeihen kann, die für Sorghum oder Mais zu arm sind. Alle 6 Maniok-Verarbeitungsbetriebe wurden lsquowhite elephantsrsquo. Regierung unternahm eine unangemessene Preispolitik. Die Hersteller wurden mit staatlich subventionierten importierten Futtergetreide versorgt, um die Einzelhandelspreise im Getreide zu halten, um die Einzelhandelspreise zu senken. Lokale Landwirte konnten nicht konkurrieren, da importiertes Sorghum zu den Futtermühlen an US142 pro Tonne geliefert wurde, während inländische Versorgungsmaterialien US151 pro Tonne waren. Die Situation wurde noch schlimmer, als die Regierung einen Anstieg der Bauernpreise um 30 Prozent verkündete. Venezolanische Futtermittelhersteller konnten Maniokpellets aus Thailand zu niedrigeren Kosten erhalten, als sie von lokalen Mühlen waren. Darüber hinaus waren Futtermittelhersteller, die Sorghum bei US150 pro Tonne kaufen konnten, nicht geneigt, lokal produzierte Maniokpellets auf US250 pro Tonne zu kaufen. Von Anfang an war es offensichtlich, dass die Investition in die Maniok-Verarbeitung wirtschaftlich marginal wäre. Die Machbarkeitsstudie schlug vor, dass nach dem zehnten Jahr die Rendite 11 Prozent erreichen würde und die interne Rendite nur 7 Prozent betragen würde. Jedoch war Venezuela ein ölreiches Land geworden und Kapital war nicht Mangelware. Dies erklärt vielleicht, warum es beschlossen wurde, dass die technologisch fortschrittlichsten Geräte von führenden Herstellern für die Verarbeitungsbetriebe gekauft würden und dass Heizöl nicht zum Trocknen, sondern zum Trocknen verwendet würde, wie in den meisten Teilen der Welt. Die Fragen der Rohstoffversorgung seien unzureichend berücksichtigt worden. In einem 213 Seiten Bericht nur 1 Seite berührt dieses Thema. Schließlich hatten venezolanische Landwirte eine lange Geschichte der wachsenden Maniok. Allerdings gab es keine nennenswerte Zunahme der Hektar von Maniok und Landwirte, die Maniok zum Verzehr von Menschen mit US75 pro Tonne verkaufen konnten, verweigerten das beste Angebot, das die Maniokfabriken von US45 pro Tonne machen konnten. Venezolas Maniok Verarbeitungsbetriebe gescheitert und wurde lsquowhite elephantsrsquo. Die Planer des Projekts berücksichtigten weder das Marketingkonzept noch die Art des Marketing-Systems. Die Bedürfnisse der Rohstofflieferanten, der Landwirte und der Futtermittelhersteller sollten sorgfältig studiert werden, bevor das Projekt entworfen wurde. Es gab keinen Versuch, das Projekt an die Landwirte zu vermarkten, die nach wie vor den gleichen Preis für Cassava forderten, der für Tierfutter bestimmt war, da sie für die für den menschlichen Verzehr verarbeitete Cassava erhielten, obwohl die Wirtschaftlichkeit beider Sektoren sehr unterschiedlich war. Kein Programm wurde eingeleitet, um die Idee des Anpflanzens zusätzlicher Bereiche von Manioka zu fördern. Die Wirtschaftlichkeit der Futtermittelherstellung wurde ähnlich ignoriert, so dass die Manioksprozessoren Schwierigkeiten hatten, ihre Pellets zu verkaufen. Möglicherweise könnten die Kosten für die Herstellung von Maniokpellets mit einem angemesseneren technischen Niveau auf einen Punkt gesenkt werden, an dem sie mit importierten Maniokpellets, Sorghum und Mais konkurrieren konnten. Hinweis: Elefanten sind nicht indigenen Venezuela. Das lsquowhite elephantrsquo ist jedoch in praktisch allen Ländern der Welt gefunden. In einer idealen Welt sollte es eine Form der strategischen Partnerschaft zwischen diesen Schlüsselspielern geben. Es ist offensichtlich, dass auf lange Sicht eine der vier Gruppen es schwierig finden würde, zu überleben, wenn die anderen nicht. Doch im wirklichen Leben sind Einstellungen nicht die der idealen Welt oder der längerfristigen. Sie konzentriert sich mehr auf den kürzeren Begriff und auf die Wahrung der Interessen jeder Gruppe. Nur indem es jeder Gruppe erlaubt, sich um ihre Interessen zu kümmern, kann sich eine ausgewogene längerfristige Beziehung entwickeln. Dies muss berücksichtigt werden, wenn man bedenkt, was die Lebensmittelindustrie von der Landwirtschaft erwartet. Darüber hinaus werden diese Erwartungen je nach dem Niveau der Raffinesse der Märkte der Lebensmittelindustrie selbst zu dienen versucht variieren. Ein wenig früher wurde es gesagt, dass ein Marketing-System hat zwei verschiedene Dimensionen. Eine dieser Dimensionen sind die Institutionen, Organisationen und Unternehmen, die an einem Markt teilnehmen, und die zweite ist die Funktionen, die diese Teilnehmer durchführen. Kohls und Uhl 6 haben die Funktionen, die in landwirtschaftlichen und Nahrungsmittelmarketingprozessen involviert sind, wie unter drei Sätze von Funktionen eines Marketingsystems A eingestuft. Austauschfunktionen 9. Market Intelligence Jede dieser Funktionen fügt dem Produkt einen Mehrwert hinzu, und sie benötigen Eingaben, so dass sie entstehen Kosten. Solange die Wertschöpfung zum Produkt positiv ist, finden die meisten Firmen oder Unternehmer es rentabel, um die Dienstleistung anzubieten konkurrieren. Einkauf: Das Marketingkonzept sieht vor, dass die Bedürfnisse des Kunden von größter Bedeutung sind. Ein Produzent kann eine Marktorientierung angenommen haben, wenn die Produktion gezielt geplant ist, um spezifische Anforderungen oder Marktchancen zu erfüllen. So wird ein Vertrag Bauer, der die Bedürfnisse eines Lebensmittel-Prozessor-Herstellung von Sorghum-basierte Malzgetränke erfüllen will nur kaufen, verbesserte Sorghum Saatgut. Heshe wird jegliche Eingaben vermeiden, die die Lager - und Verarbeitungseigenschaften des Sorghums beeinträchtigen und ständig neue und bessere Inputs anstreben werden, die seinen Kunden in den Augen des Kunden einen weiteren Mehrwert verschaffen werden. Bei der Herstellung seiner Kaufentscheidungen seine unterlegene Betrachtung wird die Wirkung auf die Attraktivität seiner Produktion auf die Märkte, die er sucht zu dienen. Das Käufermotiv ist die Möglichkeit, Gewinne zu halten oder sogar zu steigern und nicht notwendigerweise z. B. die beste Qualität zu liefern. Durch die Verbesserung der Qualität werden die damit verbundenen Kosten zwangsläufig erhöht. In einigen Fällen ist der Markt unempfindlich für Verbesserungen in der Qualität, über einen gewissen Schwellenwert, nicht verdienen einen Prämienpreis. Unter solchen Umständen ist der Erzeuger, der einen lsquobetterproduktrsquo ausübt und produziert, nicht marktorientiert, da er die wirklichen Bedürfnisse des Verbrauchers ignoriert. Die erfolgreichste Agrarwirtschaft ist diejenige, die den größten Unterschied zwischen den erhaltenen Preisen und den entstandenen Kosten ergibt. Verkauf: Von den neun Funktionen aufgelistet, ist dies wahrscheinlich diejenige, die Menschen finden am wenigsten Schwierigkeiten bei der Verknüpfung mit Marketing. In der Tat zu viele der Begriffe Marketing und Verkauf sind synonym. Kotler 7 schlägt vor, dass: ldquoMost Unternehmen üben das Verkaufskonzept, wenn sie über Kapazität haben. Ihr unmittelbares Ziel ist zu verkaufen, was sie machen können, anstatt zu machen, was sie verkaufen können. rdquo Es ist nicht zu leugnen, dass lsquohigh Druck sellingrsquo praktiziert wird, wo die Interessen der Verbraucher sind weit von vorne im Kopf des Verkäufers. Dies ist nicht Marketing. Unternehmen nehmen die Marketingphilosophie an, indem sie sich bewusst werden, dass ihre eigenen langfristigen Ziele nur durch konsequente Bereitstellung der Kundenzufriedenheit realisiert werden können. Während der Verkauf könnte ein Verbraucher zu schaffen, ist das Marketing über die Schaffung eines Kunden. Der Unterschied ist, dass Marketing ist über die Gründung und Pflege von langfristigen Beziehungen mit Kunden. Selling ist ein Teil des Marketings auf die gleiche Weise, wie Promotion, Werbung und Merchandising Komponenten oder Sub-Komponenten des Marketing-Mix sind. Diese alle auf Überzeugung gerichtet und werden zusammen als Marketing-Kommunikation eines der vier Elemente des Marketing-Mix bekannt. Abbildung 1.3 Die Austauschfunktion Lagerung: Die landwirtschaftliche Produktion zeichnet sich dadurch aus, dass sie saisonabhängig ist, während die Nachfrage das ganze Jahr über konstant bleibt. Daher die Notwendigkeit der Lagerung, um einen reibungslosen, und so weit wie möglich, ununterbrochenen Produktfluss in den Markt zu ermöglichen. Weil er mit einem biologischen Produkt zu tun hat, genießt der Züchter nicht die gleiche Flexibilität wie sein Herstellungsgegenstück, um das Zeitverhalten des Angebots an die Nachfrage anzupassen. Es wäre übertrieben zu behaupten, dass ein Hersteller die Produktion auf - und abschalten kann, um die Nachfrage zu decken - sie haben auch ihre Einschränkungen -, aber sie haben mehr Alternativen als der landwirtschaftliche Produzent. Ein Hersteller kann zum Beispiel Überstunden, Unterauftragsarbeiten und über einen längeren Zeithorizont arbeiten lassen, kann der Hersteller die Produktionskapazität erhöhen oder verringern, um die Stärke der Nachfrage zu erfüllen. In der Landwirtschaft und insbesondere in den LDCs übersteigt das Angebot die Nachfrage in der unmittelbaren Nacherntezeit oftmals. Die Glut reduziert die Erzeugerpreise und die Verschwendung kann extrem hoch sein. Für einen Großteil der Erinnerung an die Zeit vor der nächsten Ernte kann das Produkt knapp sein, denn Händler und Verbraucher müssen Prämienpreise zahlen, um alles zu retten, was knappes Angebot zu haben ist. Die Speicherfunktion ist eine der Ausgleich von Angebot und Nachfrage. Sowohl Erzeuger als auch Konsumenten profitieren von einem Marketing-System, das die Produkte zur Verfügung stellen kann, wenn es benötigt wird. Ein Bauer, Kaufmann, Genossenschaft, Marketing-Board oder Einzelhändler, die ein Produkt speichert bietet einen Service. Dieser Service kostet Geld und es gibt Risiken in Form von Verschwendung und Einbrüchen in Marktnachfrage, Preise, so dass der Anbieter der Lagerung hat Anspruch auf eine Belohnung in Form von Gewinn. Transport: Die Transportfunktion ist vor allem eines, um das Produkt dort zugänglich zu machen, wo es gebraucht wird, ohne unangemessen die Gesamtkosten des Erzeugnisses zu addieren. Eine adäquate Leistung dieser Funktion erfordert die Berücksichtigung von Alternativrouten und - typen, um Rechtzeitigkeit zu erreichen, die Produktqualität zu halten und die Versandkosten zu minimieren. Effektives Transportmanagement ist entscheidend für effizientes Marketing. Unabhängig davon, ob ein einzelnes Fahrzeug oder eine Flotte von Fahrzeugen betrieben wird, muss der Transport sorgfältig gehandhabt werden, einschließlich Kostenüberwachung - Betriebsabläufe auf verschiedenen Straßenarten, Kraftstoff - und Schmierstoffverbrauch sowie geplante Wartungs - und Reparaturarbeiten. Das geschickte Management aller Aspekte des Fahrzeugbetriebes kann auch einen wesentlichen Beitrag zu einem effizienten Marketing leisten, insbesondere im Hinblick auf optimale Routing-, Scheduling - und Beladungs-Maximierung der verfügbaren Schichtstunden, wobei die Fahrzeugflotte unter Berücksichtigung der Zeit in einer optimalen Größe gehalten wird Einschränkungen bei der Lieferung, und die Erhebung Zeiten und eine vernünftige Verwaltung von Fahrzeug-Ersatz und Abschreibungen. Verkehrsbetreiber müssen auch die Vor - und Nachteile von Besitz, Vermietung oder Leasing von Transportmitteln abwägen. Verarbeitung: Die meisten landwirtschaftlichen Erzeugnisse sind nicht in einer Form, die für die direkte Lieferung an den Verbraucher geeignet ist, wenn es zuerst geerntet wird. Vielmehr muss es in irgendeiner Weise geändert werden, bevor es verwendet werden kann. Kohls und Uhl 6 feststellen, dass: ldquoDie Verarbeitungsfunktion ist manchmal nicht in einer Liste von Marketing-Funktionen enthalten, weil es sich im Wesentlichen um eine Form ändern Aktivität. rdquo Allerdings ist es aus diesem Grund, dass die Verarbeitung sollte als Marketing-Funktion aufgenommen werden. Die Form ändern Aktivität ist eine davon, die Wert auf das Produkt. Wechselnde grüne Kaffeebohnen in geröstete Bohnen, Maniok in Gari oder Viehbestand, volle Obstbündel in Palmöl oder Zuckerrohr in Gur erhöht den Wert des Produkts, weil das umgewandelte Produkt mehr Nutzen für den Käufer hat. Wie die Form des Erzeugnisses verändert werden soll und die Methode, mit der solche Veränderungen bewirkt werden, sind Marketingentscheidungen. Zum Beispiel wurde vor einigen Jahren, als Äthiopien das Teegeschäft ausweiten wollte, eine Prototyp-Produktionsstätte gegründet. Die Pflanze war fähig, den Tee zu heilen und in einzelne Teebeutel zu verpacken. Zu diesem Zeitpunkt wurden Tests durchgeführt, in denen das Produkt mit anderen bereits auf dem Markt verglichen wurde. Die Ergebnisse waren ermutigend. Doch im Zuge der Marketingforschung wurde auch entdeckt, dass neunzig Prozent des verbrauchten Schwarztees vermischt sind und nicht die reine Sorte, die von den Äthiopiern in Teebeuteln gelegt wird. Indem sie den Punkt des ändernden grünen Blattes in hochwertigen schwarzen Tee überschritten, betraten die Äthiopier einen netten Markt, der nicht ist, was sie beabsichtigten. Rechtzeitige Marketingforschung hätte Äthiopien gerichtet, um die Formwechselaktivität zu stoppen, die vom Sacken abhängt, da zu diesem Zeitpunkt Äthiopien nicht die Anbaufläche des Tees noch die Betriebsmittel hatte, um eine Teemischungsanlage von seinen Selbst zu entwickeln. In ähnlicher Weise kann ein Erzeuger von frischen Früchten auch Abbau - und Konservenfabriken haben, aber wenn potentielle Käufer die Flexibilität der Verwendung der Früchte in einer Vielzahl von Wegen wünschen, dann dienen diese Verarbeitungsstufen dazu, Nutzen und Wert zu verringern und nicht zu vermehren. Natürlich ist die Verarbeitung nicht der einzige Weg, Wert zu einem Produkt hinzuzufügen. Die Lagerung von Produkten, bis sie benötigt werden, fügt Dienstprogramm hinzu und fügt daher Wert hinzu. Ebenso fördert der Transport von Waren zu Einkaufsmöglichkeiten, die für den Verbraucher günstig sind, einen Mehrwert. Kurz gesagt, jede Aktion, die den Nutzen der Ware oder Dienstleistung zu potenziellen Käufern erhöht erhöht auch Wert auf das Produkt oder die Dienstleistung. Zu den erleichterten Funktionen gehören Produktstandardisierung, Finanzierung, Risikotragfähigkeit und Marktintelligenz. Erleichterungsfunktionen sind die Aktivitäten, die den Austauschprozess ermöglichen. Marketing, in einfachen Worten, ist der Akt der Lieferung von Produkten an jemanden im Austausch für etwas wahrgenommen, um gleich oder größer Wert, (in der Regel, aber nicht immer, eine gegebene Geldsumme). Erleichterungsfunktionen sind weder ein direkter Teil des Austausches des Titels noch der physischen Bewegung des Erzeugnisses. Abbildung 1.4 Die erleichternden Funktionen Standardisierung: Die Normung befasst sich mit der Erstellung und Aufrechterhaltung gleichmäßiger Messungen der Produktqualität und - menge. Diese Funktion vereinfacht den Kauf und Verkauf sowie die Verringerung der Marketingkosten, indem es den Käufern ermöglicht, genau das festzulegen, was sie wollen und die Lieferanten, was sie in der Lage und bereit sind, in Bezug auf Menge und Qualität des Produkts zu liefern. In Abwesenheit von Standardgewichten und Maßnahmen Handel entweder entweder teurer zu führen oder unmöglich, insgesamt. In Nepal handelte es sich um die Vielfalt von Gewichten und Maßnahmen, die in Bezug auf Getreide im Land verwendet wurden, dass es für einige Distrikte einfacher war, den Handel mit Nachbarstaaten in Indien zu führen, als mit anderen Distrikten in Nepal zu tun. Zu den bemerkenswertesten Vorteilen einheitlicher Standards gehören: Preisnotierungen sind aussagekräftiger, der Verkauf von Waren nach Muster oder Beschreibung wird möglich. Kleine Lose von Waren, die von einer großen Zahl kleiner Produzenten produziert werden, können zu wirtschaftlichen Lasten zusammengebaut werden, wenn diese Lieferungen erfolgen Ähnlich in der Besoldungsgruppe oder Qualität mit einer Reihe von abgestuften Produkten konfrontiert der Käufer ist in der Lage, die Qualität des Produktes wählen heshe ist in der Lage und bereit zu kaufen. Qualitätsunterschiede bei landwirtschaftlichen Erzeugnissen ergeben sich aus mehreren Gründen. Qualitätsunterschiede können durch Produktionsverfahren und aufgrund der Qualität der eingesetzten Inputs verursacht werden. Auch technologische Innovationen können zu Qualitätsunterschieden führen. In addition, a buyers assessment of a products quality is often an expression of personal preference. Thus, for example, in some markets a small banana is judged to be in some sense lsquobetterrsquo than a large banana white sugar is considered lsquosuperiorrsquo to yellow sugar long stemmed carnations are of lsquohigher qualityrsquo than short stemmed carnations and white maize is lsquoeasier to digestrsquo than yellow maize. It matters not whether the criteria used in making such assessments are objective or subjective since they have the same effect in the marketplace. What does matter in marketing is to understand how the buyer assesses lsquoqualityrsquo. Financing: In almost any production system there are inevitable lags between investing in the necessary raw materials (e. g. machinery, seeds, fertilizers, packaging, flavourings, stocks etc.) and receiving the payment for the sale of produce. During these lag periods some individual or institution must finance the investment. The question of where the funding of the investment is to come from, at all points between production and consumption, is one that marketing must address. Consider the problem of a food manufacturer who wishes to launch a range of chilled products in a developing country where few retail outlets have the necessary refrigeration equipment. This is a marketing problem. It might be solved by the food manufacturer buying refrigerators and leading these to retailers (or arriving a hire-purchase arrangement with retailers). A common marketing problem, in developing countries, is the low level of incomes leading to low levels of effective demand for many products. The challenge to marketing is to somehow channel what income is available into effective demand. In the case of agricultural equipment marketing this might involve offering hire-purchase schemes where the prospective buyer makes payment in regular installments. During this time heshe is deemed to have hired the machine. If payments are not forthcoming, the machine can be recovered since its ownership remains with the seller up until the final payment is made, at which point the farmer is considered to have purchased the machine. Alternatively, the seller might set up leasing, rather than purchasing schemes where again the farmer is making regular payments but never takes title to the machine. Where a food item is being marketed, to a low income market, the seller can consider reducing the until price of the product by making the pack or lot size smaller. Another tactic is to make the product more affordable by using cheaper ingredients andor packaging. Instant coffee can be sold at lower prices by substituting some of the coffee with chicory the price of meat products is reduced by increasing the percentage of cereals in these products and including less meat andor making use of less expensive parts of the animal such as entrails, offal, feet and head. Marketing is also concerned with the financing of the enterprise itself. Here again some creative solutions can be developed. Where internal financing is insufficient for the purposes in view, an enterprise in a developing country can look to several alternatives including: credit co-operatives andor credit unions Where these sources of finance are considered inappropriate, or are simply not available to a particular enterprise, a strategic alliance in the form of a joint venture could be the answer. These are partnerships formed to exploit market opportunities more effectively andor efficiently than either party can on its own. An enterprise, in a developing country, may engage in a joint venture with either an indigenous partner andor with a foreign partner. The agreement between parties to a joint venture normally specifies their respective contributions of resources, share of management control, profit and risk 8 . Case 1.2 Massey-Ferguson Buys Its Own Tractors Agricultural equipment manufacturers periodically undertake major revisions of their product lines. This is a very expensive process since the manufacturing plant required to produce agricultural tractors, combine harvesters, seed drills, straw balers and the like costs million of dollars. When the equipment manufacturer Massey Ferguson (MF) came to develop a completely new line of tractors, in the early 1980s, it sold its existing line of tractors to the state owned Polish tractor manufacturer Ursus in order to offset at least part of the cost of the new investment. The arrangement was rather novel for the industry at that time. Ursus was in such poor financial condition that it could not finance the purchase of the Massey Ferguson manufacturing plant and patents, so MF supplied the plant to Ursus and were to buy-back a proportion of the tractors which Ursus manufactured. They would continue to market these under the MF brand name whilst the remainder would be sold under the Polish manufacturers name. Massey Ferguson planned to supply the older designs to markets in developing countries where these models continued to have a large market share whilst launching the new models in industrialised countries. The agreement between Massey Ferguson and Ursus was modelled on a similar, and very successful, arrangement between the Italian automobile manufacturer Fiat and Polands state owned car manufacturer. However, MFs deal never matched the performance of the Polski-Fiat. The failure of the MF-Ursus buy-back package had several causes, but foremost among them was the inability of Ursus to source components of the MF tractors which Massey Ferguson did not either manufacturer itself nor own the patents to. For example, the fuel injectors were manufactured by the British components supplier Lucas Industries. Poland simply did not have the foreign currency reserves, at that time, to import these and other parts. Consequently, Ursus tractor plant, on the outskirts of Warsaw, with the potential to produce 77,000 units per annum was able to manufacture around 350 units per year. Whilst the MF-Ursus buy-back arrangement was not a success it should not be concluded that buy-back agreements are doomed to failure. The Polski-Fiat deal was, after all, a great success. The MF-Ursus failure was due to very specific circumstances. What should be concluded is that it is possible to devise innovative approaches to the financing of business enterprises. Whatever the source of finance under consideration marketing has a role to play in evaluating the appropriateness of that source as well as identifying it in the first place. A common requirement is that marketing proposals include a forecast of the payback period. Those responsible for developing these proposals are best placed to evaluate the compatibility between the market opportunity under consideration and the alternative modes of financing it. Of specific interest is the prospect of the investment payback period matching the repayment schedule. Enterprises which finance long term investments through short term sources of finance are either badly misinformed or have adopted a high risk strategy. Risk bearing: In both the production and marketing of produce the possibility of incurring losses is always present. Physical risks include the distruction or deterioration of the produce through fire, excessive heat or cold, pests, floods, earthquakes etc. Market risks are those of adverse changes in the value of the produce between the processes of production and consumption. A change in consumer tastes can reduce the attractiveness of the produce and is, therefore, also a risk. All of these risks are borne by those organisations, companies and individuals. Risk bearing is often a little understood aspect of marketing. For example, when making judgements as to whether a particular price is a lsquofair pricersquo the usual reference point is the producer or suppliers costs. However the risks borne are rarely taken into account by those passing judgement and yet, almost inevitably, there will be occasions when the risk taker incurs losses. Stocks will spoil, markets will fall, cheaper imports will enter the country, consumer tastes will change, and so on. These losses can only be observed if adequate surpluses were generated in previous periods. Risk bearing must be acknowledged as a cost since what is uncertain is not whether they will occur, but when they will occur. Market intelligence: As for as is possible marketing decisions should be based on sound information. The process of collecting, interpreting, and disseminating information relevant to marketing decisions is known as market intelligence. The role of market intelligence is to reduce the level of risk in decision making. Through market intelligence the seller finds out what the customer needs and wants. The alternative is to find out through sales, or the lack of them. Marketing research helps establish what products are right for the market, which channels of distribution are most appropriate, how best to promote products and what prices are acceptable to the market. As with other marketing functions, intelligence gathering can be carried out by the seller or another party such as a government agency, the ministry of agriculture and food, or some other specialist organisation. What is important is that it is carried out. The link between agriculture and food continually evolves. In primitive societies, the farmer and consumer were either the same family or close neighbours who bartered their products and services as we see in figure 1.1, but as societies develop other linkages are added. Commodity traders, processors, manufacturers who convert produce into food items and retailers, among others, are interposed between the producer and consumer. A more recently introduced link into the chain is the scientist. Scientists as breeders, plant biologists, nutritionists and chemists have made an immeasurable contribution to the development of agricultural production and food manufacture over the past 50 years. It would appear that we have passed through the age of machines in agriculture, and the age of chemicals, on to the age of biotechnology in agriculture. Biotechnology has great potential for the developing countries since it is likely to be less capital intensive and more research and know-how intensive. Thus its benefits can flow faster into the poorer countries who do not have the capital. Therefore its impact could be faster, more widespread and more significant. As the link between food and agriculture continues to evolve, we see the emergence of an agribusiness i. e. where agriculture and food become a continuum. Multinational companies like Cargill, Brooke Bond Liebig, and Del Monte are examples of vertically integrated organisations with links all the way through from agricultural production to retailing. There is a line of argument which says that it makes sense that those who are closest should the consumer should assess hisher needs and interpret them back to the primary producer. As disposable incomes increase, the food industry will increase the quality and diversity of the products it produces. Food manufacturers will have particular expectations of agriculture as a supplier of their raw materials, including: Quality: To build a profitable business, food manufacturers seek to establish a preference for their products by differentiating those products in some way which is meaningful to consumers. Then, in order to enable consumers to recognise the differentiated product, manufacturers brand that product. Manufacturers can then work on building consumer loyalty to these brands. Brand loyalty is normally only established by delivering high quality consistently. As disposable incomes rise, the market tends to develop more sophisticated needs and the quality of the raw material becomes even more critical. Where agriculture is seeking to serve a food industry, that itself is seeking to meet these more sophisticated needs and wants, it can expect to face increasing emphasis on quality. Equally well, agriculture can expect to share in the better return for innovative improvements in quality. Cost: Next to quality will come cost. With an increased capability to search the world for raw materials, the food industry is able to find the lowest cost source for any given level of quality. For the food manufacturer, the country in which heshe manufactures, or markets, need no longer be the source of agricultural produce. Improved transportation and communications mean that the world is becoming hisher source of supply. This is a significant change in the competitive environment of agriculture which the farming community has to realise, because they have, hitherto, been largely concooned in their respective domestic markets. Non-seasonality: Agricultural products were traditionally seasonal in their production and supply. Modern technology and husbandry practices mean that food manufacturers need not have their production schedules dictated by the seasons. Indeed, the capital intensive food industry cannot afford to incur the high costs of under utilising its capacity. This means that farmers will have to complete in terms of reducing seasonality or fitting into a pattern of social competitiveness. Reliability: A manufacturer who has invested heavily in building up his brand will be very keen to get reliable supplies in terms of quality, timing and cost. Producers of agricultural produce will be increasingly judged on their reliability in all of these respects. Processing: Ease of processing will become an increasingly important expectation of the food industry. Like all industries, reductions in the costs of capital equipment, wages and inventories are important objectives. For example, farmers who can deliver on the lsquojust-in-timersquo principle will contribute towards reducing a manufacturers working capital and space requirements. Farmers who can do part of the secondary processing andor performing functions such as the post harvest treatment of the crop or transporting will be adding another advantage. Crops that are specially bred or designed to facilitate processing (e. g. seedless fruits, featherless chickens, coffee beans without caffeine, low cholesterol meats) are another type of advantage that the food industry could expect from agriculture. In short, the competitive advantage will rest with those able to add most value and can differentiate what they are offering from that of other suppliers. Product differentiation: In competitive brand marketing, the food industry has to innovate continuously to create new products that are different from and superior to existing ones of their own or competitors. The scope of innovation has traditionally been at the processing stage. Whilst this will continue to be an important area for innovation, manufacturers will increasingly tend to look for innovative changes in the agricultural produce itself. This may be in terms of novel tastes, improved texture, more attractive shapes, etc. Health aspects: We have already said that in the more sophisticated food markets, healthy eating can become a priority among consumers. Therefore, farmers will have to consider the health connotations of what they choose to grow. There are two aspects of health to be taken into account. First, consumers may be interested in the food itself i. e. low fat, lowno sugar or lowno salt. It would be a mistake to think that health issues are confined to the more sophisticated food markets or to the wealthier segments of the community. Nutrition is important in all segments of the market. Even where the poor receive adequate amounts of food to fend off starvation, they are often malnourished. Thus farmers have to be concerned about the nutritional value of the produce they grow. Second, the consumer may be more, or equally, concerned about the food production methods i. e. the avoidance of chemicals like herbicides, pesticides etc. This may mean a change to the farmers husbandry practices with implications for the costs of production. The consumer and the food industry will expect the farmer to produce without potentially dangerous chemicals, but at no extra cost to them. This will be another challenge for agriculture. The principal component of any marketing system are the institutions and enterprises of which it is comprised. Three of the principal forms of enterprise to be found in developing countries are discussed in this section. These are: private companies, marketing boards and co-operatives. Private enterprise has much to commend it, including a much higher level of financial independence from government than public enterprises. Moreover, private enterprise is able to adapt, rapidly, to changing circumstances and opportunities and is usually able to provide what consumers want at a lower cost than public enterprises. Abbott 9 highlights several particular strengths of private enterprise, including: Low operating costs Nothing so concentrates the mind on cost control than ownership. The private entrepreneur has every motivation to contain costs since to do otherwise erodes hisher profit margin. High levels of equipment utilisation Since private enterprise has as its prime objective, profit, everything is done to maximise the use of capital equipment, and thereby lower unit costs e. g. concern is shown to keep factories operating at high levels of capacity utilisation, attempts are made to ensure that the firms vehicles have economic return loads as well as outward loads etc. Decision making within private enterprise tends to be quicker, because of the absence of a weighty bureaucracy, than in public enterprise equivalents. According to Abbott, successful indigenous private enterprises, in agriculture, have several distinguishing characteristics. Those cited by Abbott apply particularly to enterprises that are owner-operated. The entrepreneurial spirit is in evidence when an individual shows a willingness to accept calculated risks. Rapid decision making Decision making within private enterprise tends to be quicker, because of the absence of a weighty bureaucracy, than in public enterprise equivalents. Independence of spirit and persistence Entrepreneurs need a good deal of self confidence i. e. they must be prepared to back their own judgements rather than rely on the views and support of others. Moreover, it often takes a fair amount of time before market demand can be built up and new markets penetrated and hence the need for tenacity. Willingness to work hard, for long andor irregular hours There is a direct relationship between effort and the level of success in private enterprise. Rarely is the entrepreneur able to rely on others covering for himher and no-one pursues potential business or seeks to solve management problems with as much vigour as the owner. Relevant experience andor expertise Most successful private entrepreneurs have experience andor expertise which others are willing and able to lsquobuyrsquo. This could be, for example, the ability to judge the quality and quantity of meat a live animal will yield when slaughtered. An understanding of agriculture This of course, relates to agribusinesses and is essential to those seeking to do business with farmers (or fisherman). Knowing how crops are grown and mature and understanding the priorities of producers and the dailyseasonal pressures they face is invaluable in agribusiness. Abbott claims to have identified several areas of marketing where private companies tend to perform better than other forms of marketing enterprise. This class of product is subject to rapid and extreme fluctuations in supply and demand, and therefore price, as well as considerable variation in quality, both at harvest time and subsequently, due to mechanical, pathological andor physiological damage. A private company, with its ability to make quick decisions, in response to an ever changing environment and set of market conditions, is in a better position to prosper in the perishable produce market. Livestock and meat Abbott claims that the marketing of livestock and meat is dominated by private enterprise. He says that this is explained by the fact that direct decision making gives private enterprise the edge because of the need for skilled judgement in appraising quality and value when the product is so variable. Combined purchase of produce and sales of farm inputs and consumer goods Businesses serving rural customers often have to deal in small quantities of supplies and purchases and this requires a great deal of flexibility on the part of the enterprise. It is usually the smaller, private, enterprise which proves willing and able to conduct business in such a way. New and highly specialised activities in marketing The willingness to invest in new, and therefore risky ventures or to invest in highly specialised activities is usually the province of the private sector. The French economist J. B. Say (c.1800) is quoted as defining the entrepreneur as one who ldquohellipshifts economic resources out of an area of lower and into an area of higher productivity and greater yieldrdquo. Committees and government bureaucracies are not especially fond of closing down existing economic activities. They are not much better equipped to generate new ideas or indeed to innovate. Marketing boards are, in most instances a government agency andor statutory organisation having the function of intervening in the marketing process, with a view to serving the cause of efficient and orderly marketing. Less frequently they are voluntary organisations established by farmersproducers. Put another way, marketing boards tend to be born out of government policy rather than by consensus among commercial parties. This is especially true of Marketing boards in the tropics where their chief object is to improve the income of the smallholder, grower, andor livestock farmer. Marketing boards do not normally provide marketing services to large estates or plantations. Prior to the adoption of structural adjustment and market liberalisation in nearly all Marketing boards served as lsquoprice stabilising boardsrsquo. Another characteristic of marketing boards is their focus on durable products. Marketing boards are normally given authority for lsquocontrolledrsquo or lsquoscheduled cropsrsquo. In many countries fewer than 5 crops are controlled. These tend to be traditional crops like millet, sorghum, rice, maize, groundnuts and palm oil and lsquocolonialrsquo crops such as cocoa, cotton, coffee, tea, tobacco and rubber. Some governments have opted for boards that control more than one crop. In some cases, the marketing board performs all of the marketing functions itself but in others it cooperates with private enterprise by, for example, hiring storage facilities or appointing local buying agents. The effectiveness of a particular marketing board is often viewed in terms of three factors:- Its contribution to orderly and efficient marketing The reduction in the capacity of intermediaries to manipulate margins at the expense of producers and consumers The generation of producer-oriented monopoly power In many cases the establishment of a marketing board was a reaction to situations where middlemen andor foreign buyers were perceived to hold monopsonistic power over producers. Hence the role of the marketing boards is frequently articulated as being one of organising producers into monopolistic agencies with real countervailing power to reduce inefficiencies due to unwarranted competition, and duplication of effort between intermediaries. Figure 1.5 Main roles played by marketing boards In theory at least, the marketing board contributes to orderly marketing by acting as an agent for improving marketing practices, as a market regulator and as a provider of facilitating services. For instance: Marketing boards can establish marketing practices and procedures for raw andor processed products. Marketing boards may act as ldquowatch-dogsrdquo over agreed marketing practices and procedures e. g. credit arrangements, weights and measures, quality control etc. Marketing boards may provide all or some of the facilitating services e. g. credit, market intelligence and risk management. The last of these usually takes the form of the guaranteeing of prices. In the case of tree crops prices are announced in advance of harvest. Prices for annual crops are normally made known before planting or sowing. The role of marketing boards in bringing about more efficient marketing is most often framed by policy makers in terms of modifying the market structure. That is, trying to make what is perceived to be an imperfect market structure more advantageous to producers. Of course, in doing so, account ought to be taken of the effect on both consumers and other players within the marketing system. This is not always done and the question is begged whether a market structure which is organised to the principal benefit of one particular set of players is anything other than imperfect to the others. However, the argument in favour of giving producers real countervailing powers is strongest in situations in which the marketing system is characterised by a myriad of largely powerless producers and a relatively small number of powerfull intermediaries. In these circumstances, the price-makers are the middlemen and both producers and consumers are price-takers. One particular way that a marketing board may act to modify an existing market structure is to rationalise the system in an attempt to reduce inefficiencies seen to be caused by unwarranted competition and duplication of effort between intermediaries. For example, there may be duplication of transport, storage and processing facilities to the extent that capacity utilisation cannot rise to economic levels without extremely high charges to compensate. Marketing boards may try to rationalise the system through, for example, a system of licenses. Buying operations of marketing boards: Marketing boards would normally buy at fixed prices. Each season or year, the government sets the price for scheduled crops. In the case of tree crops, this price is announced before harvest and before planting or sowing in the case of annual crops. It is subsequently kept at the same level for a period of time: typically about 6 months. These procedures give some security to producers. Buying takes place at official buying points where there are either appropriate storage facilities for the produce, or transportation so that it can be moved before any significant deterioration in quality occurs. Clearly farmers are concerned that buying points should be conveniently located. However, maintaining an extensive network of buying points adds substantially to a marketing boards operating costs and so the interests of the two parties often conflict. One compromise is for the marketing board to operate mobile buying teams to supplement permanent buying points. In some countries the buying points are staffed by board employees, but the costs of running the buying points and the associated transportation costs can become too high and some governments seek alternative solutions such as transferring buying points to local co-operatives, andor by appointing licensed buying agents (LBAs). It is common in anglophone West Africa to have co-operatives operating as LBAs, in competition with private traders who are also LBAs. The use of buying agents promises some degree of competition, which in view of the fixed prices, expresses itself in the secondary conditions, in particular better service. Case 1.3 Rationalisation Isnt Always Rational The need of marketing boards to delegate the actual buying function is exacerbated by the inevitable shortage of transport experienced in developing countries. In order to make best use of the transportation available, marketing boards can appoint buying agents. An alternative, tried by Tanzania, was to rationalise the crop buying activities of the various boards. In view of the problems the Tanzanians were experiencing in the late 1970s, a decision was made to assign each of the marketing boards a district in which it would have responsibility for buying all scheduled crops. The crop authority generally corresponded to the main cash crop of the district. Thus the Tanzanias National Milling Corporation (NMC) found itself buying a variety of crops in the areas it was assigned and depending, in turn, on other parastatals, the cotton authority, the tobacco authority, etc. to purchase grain in other districts. This arrangement facilitated the allocation of lorry and rail space and avoided the waste involved in lorries of various crop authorities converging on a particular buying centre at the same time. On the other hand, it caused great accounting confusion. Parastatals often did not have separate accounts for the different crops they were buying. When ultimately relinquishing the purchased grain to the NMC and the NMC handed over tobacco, cashew, cotton etc. to the respective authorities, reimbursements were very difficult to determine. In the 1979 these arrangements were discontinued 10 . Selling operations of marketing boards: Some marketing boards, like grain boards, are concerned entirely with domestic consumer markets. These tend to be handling staple crops such as maize, millet and rice. Other boards are dealing exclusively with export markets and, therefore, industrial buyers. The two types of markets are quite different from one another and so therefore are the operations of the boards serving them. A distinction is sometimes drawn between these two types of board by referring to Food Marketing Boards (FMBs) and Export Marketing Boards (EMBs). Among the major differences is the position of governments with regard to them. First, governments have no control over demand in export markets whereas they can, and do, exert control over demand within the domestic market. Second, since governments have to take account of the interests of domestic consumers of staple crops, they sometimes instruct FMBs to adjust their marketing strategies to meet social andor political rather than commercial objectives. The interests of consumers in export markets are of no direct concern to the government of the exporting nation. Selling operations of EMBs: Some export markets are governed by commodity agreements such as the Sugar, Cocoa and International Coffee Agreement, but in the majority of cases they must operate within free or open markets where vigorous competition exists. EMBs tend to favour early sales. That is, they try to minimise the time period between buying and exports. This is sometimes termed a lsquorapid evacuationrsquo policy. It keeps storage and capital investment requirements to a minimum, since the burden of holding and financing stocks is carried by the recipient of the produce. Most EMBs practice lsquoforward sellingrsquo which as the term itself suggests, means signing sales contracts well in advance of delivery. Sometimes it means selling the crops well in advance of their being harvested, or sometimes even before they are planted. The practice of lsquoexport parity pricingrsquo is prevalent among EMBs. This means that the producer price is calculated as a residual of the export price minus marketing costs. There is no particular motivation to minimise those marketing costs in such a system, since a major source of uncertainty for EMBs has always been the instability of prices in the open world markets. As EMBs cannot influence these prices, they tend to take the defensive approach of lobbying for low producer prices. In this way they hope to avoid a trading deficit when world prices fall. Selling operations of FMBs: In many developing countries the FMBs selling price is set by government. Concern for the welfare of consumers often encourages governments to set low prices. This means the gross trading margin of an FMB is often small. The margin is invariably a source of conflict between FMBs and the government. In its desire to please both consumers and farmers, government will often suppress the profit margin and insist upon the FMB reducing its outgoings. The government usually has the upperhand but since it has to bear any deficit it is a hollow victory. Consumers needs determine the timing of the release of stocks. Staple crops, usually have a fairly constant demand throughout the year, and FMBs have to bridge the usual, and considerable, interval between buying after harvest and staggered selling over the year. Stockholding is an important but expensive function of FMBs especially immediately after harvest when there is often insufficient storage space for the incoming produce. Conversely, as the stocks are slowly released FMB stores are under capacity for much of the year. A common objective of FMBs is basic lsquofood securityrsquo in times of shortage. This policy makes a lot of political sense but commercially it presents difficulties. Working capital is required for a longer period, and, if after all there is no shortage, the FMB is left with decaying stocks. Nearly everywhere there is a lsquodual marketing systemrsquo, with a parallel market which allows farmers, traders and consumers to by-pass the FMB. In some countries the parallel market is permitted by the government. Where FMBs have been given a monopoly, parallel markets become black markets, suppression of which has proved impossible. Indeed whether the parallel market is permitted or forbidden, the FMBs have to reckon with its competition. Some boards do not fit easily into the two categories discussed so far. Produce such as groundnuts, sunflower seed oil and palm oil, have both domestic and export markets. Marketing boards handling these products have been mainly been established in countries where a surplus for export exists. These boards are normally classified as export boards. However, there is always the possibility that domestic demand will increase to the point where it absorbs the export surplus, at which point the board becomes a domestic marketing board. Case 1.4 Profitability Comes From Wrapping The Customer in Cotton Wool The Zimbabwe Cotton Marketing Boards responsibilities included: purchasing and storing of all seed cotton grown in Zimbabwe ginning the cotton and marketing the lint and cotton seed and ensuring an adequate supply of certified planting seed for all growers. All cotton growers had to register with CMB and grow varities determined by it. Large producers were required to adhere to delivery quotas by the ginneries. The Cotton Research Institute undertook cotton breeding on the basis of international market requirements. When new varieties were adopted, the Board selected growers to undertake multiplication. They grew for the Board which, in turn, distributed the seed the following season. Planting takes place in October-November with the start of the seasonal rains. In January all large scale growers were required to report the area planted to cotton to the Board and a first production estimate was made. Large scale growers made a second return in March indicating their likely sales. These data, together with estimates of smallholder production, were used to forecast the next harvest. This enabled the CMB to set up its delivery quota system, ginning arrangements and selling schedules well in advance. Farmers delivered to the nearest ginnery with those situated in remote areas delivering to transit depots. Growers marked their cotton with their registration number. On delivery at the ginnery depot, the cotton was graded into one of four classes. The farmer was then paid out, through a computerised accounting system, normally within eight days of delivery. Samples of all bales set below the top priced grade were kept for a period to allow growers to appeal against the grading if they wish. The four grades were based on colour and cleanliness and designed to encourage appropriate production and harvesting practices. A cross-check on the grades was made by experienced lint classifiers who visited the depots on a frequent but random basis during the buying period. After the cotton had been graded for payment to the farmer, a strict quality control system came into operation. Each bale was classified into one of about 40 lsquostackrsquo numbers by appraising its fibre length, strength, fineness and colour. It was then stored in stacks consisting only of bales with identical stack numbers. This system is unique to Zimbabwe. Through the ability of the CMBs system to produce lint of consistent and specified quality, Zimbabwe was able to achieve premium prices for its export cotton. When a spinner set out the characteristics of the lint required, CMB could identify a stack of seed cotton likely to provide it. Samples were then checked at the ginnery and at the sample quality control laboratories in Harare to determine whether they met the requirements of the contract. This system met much tighter quality specifications then those employed in many other countries where the lint is classified only after ginning and ends up more variable in quality. The CMB identified a specific market segment for its product and does not compete against the much larger output of such countries as the USA and the CIS. The entire marketing system - grower, researcher, extension worker, buyer and exporter - is oriented towards meeting the requirements of the market. On the whole the picture of marketing boards in the literature is a depressing one. They are largely portrayed as weak organisations which have achieved little success. There are however some outstanding success stories like the Zimbabwean Cotton Marketing Board (CMB) part of which is related below a . When setting out to evaluate the economic performance of marketing boards, it is all too easy to neglect to acknowledge that to a very great extent they are charged with achieving political as opposed to purely commercial objectives. Indeed policy makers often refer to them as lsquoinstrumentsrsquo. Those who readily identify the ldquomistakesrdquo of marketing boards more often than not neglect to distinguish between those errors which could be rightly attributed to the boards management, and therefore can be corrected by that management, and those lying outside the board itself. Some criticisms would best be addressed to those governing the activities of the board. For example marketing boards are frequently used, by governments, as instruments of national policy, including: the promotion of agricultural and rural development with social goals overriding commercial objectives as instruments of fiscal policy as a mechanism for containing urban wages through price restraint on staple foods as a device to encourage farmers to grow and sell more food and export crops, by pushing higher producer prices as a means of consolidating power by placing political appointees on to the Board 11 . Thus, many of the decisions and activities undertaken by marketing boards which adversely affect profits and cash flow are not the product of poor commercial judgement on the part of management but are attributable to individuals, outside of the boards themselves, who have goals that are entirely divorced from the efficient and effective operation of those boards. The co-operative enterprise has its origins in the 19th century and has become one of the most ubiquitous examples forms of businesseconomic enterprise. Co-operatives exist in all countries of the world and operate under diverse political systems: from communism to capitalism. The majority of these co-operatives are, through their national apex organisations, ultimately in membership of the International Co-operative Alliance (ICA), the representative world body of co-operatives of all types. The motivation to form co-operatives has three particular aspects: the need for protection against exploitation by economic forces too strong for the individual to withstand alone the impulse for self-improvement by making the best use of often scarce resources the concern to secure the best possible return from whatever from of economic activity within which the individual engages whether as a producer, intermediary or consumer. It is the belief that each of these aspirations can most advantageously be pursued and secured in concert with like-minded people that provides the stimulus to co-operative action. The underpinning principles with are those of self-help, voluntary participation, equity, democracy, and a common bond of common need and purpose. The cohesion of the group is maintained by ensuring that individual members cannot secure power or gain advantages at the expense of the others. Co-operatives reward participation in the co-operative venture rather than rewarding capital Self-interest is a primary motivator in co-operative enterprises, with economic gain being the primary objective. In these respects, co-operatives differ little from capitalistic enterprises self-interest is simply pursued in a different way from the capitalist enterprise. Thus, the rate of interest paid on share capital is fixed and limited, and not subject to variation according to the amount of profit made. Secondly the use and distribution of surplus is restricted to one or more of the following purposes: allocation to reserves, where it becomes collectively-owned capital and is thereafter non-distributable for use on, or donation to, common-good, community project distribution to members in proportion to the trade each member has done with the co-operative. In other words, the distribution is made not in relation to capital held, but by declaring a bonus or dividend per cash unit of trade done The Structure and organisation of co-operatives There are two principal forms of co-operative organisations: primary co-operatives and secondary co-operatives. The basic unit in the co-operative systems is the primary co-operative. A primary co-operative is one in which the shareholder are individuals each of them having an equal share in its control. In many cases, primary co-operatives will combine several functions e. g. an agricultural co-operative may provide consumer supplies to its members. Primary co-operatives may also own and run subsidiary enterprises related to their main functions, such as a consumer co-operative with its own manufacturingprocessing or servicing business. While a primary co-operative has individual persons as members, a secondary (or federal) co-operative is one in which other co-operatives are the members. Apart from this basic difference the structure and organisation of both types follow a very similar pattern. The control and management of primary co-operatives The control structure of co-operatives is made up of three tiers as figure 1.4 depicts. The General Meeting of Members makes policy and through this meeting members exercise control. In most countries there is a legal requirement to hold an Annual General Meeting which has the particular responsibilities of receiving and deciding upon an audited statement of account, deciding how any surplus shall be used and distributed, and of electing a committee. Figure 1.6 The management structure of primary co-operatives The General Meeting of Members delegates the operational control of the co-operative to a management committee (or board of directors), which controls the works of the co-operative on behalf of the members. One member of this committee is elected chairman or president. A manager (or secretary) is appointed by the management committee as the chief administrative officer of the co-operative. Heshe is responsible to the committee for the day-to-day control of the business. In small co-operatives heshe may be a member elected to do the work without pay. Federal or secondary co-operatives Secondary co-operatives (also variously described as ldquounionrdquo or ldquofederalrdquo co-operatives) can be organised for many different purposes. It is quite possible, and quite common, for a primary co-operative to be a member of several secondary co-operatives, depending on its needs and the local co-operative structure. Examples of secondary co-operative organisation would be: a local district union of 34 cotton marketing co-operatives to operate a ginning plant a federation of 2, or more, consumer co-operatives to operate a bakery a national union of agricultural co-operatives to manufacture fertiliser a national union of consumer co-operatives to organise wholesaling services and to manufacture merchandise a national federation of co-operatives to run a national bank. Through the device of federation, co-operatives are able to organise very large-scale business operations at the national - or even international - level without detriment to the democratic control of the primary co-operatives by their own members. The secondary co-operative can, because of its larger volume of business or its wider representational base, undertake functions, provide services, and make representations, which would be beyond the capacity of all but the very largest primary co-operatives. Secondary co-operatives are a from of vertical integration providing the opportunity for economies of scale, scope for development and improved administration. Secondary co-operatives can in turn form other secondary co-operatives - sometimes called tertiary co-operatives. In many countries there is one apex federation representative of all other co-operatives in the country and providing, at the national level, representative, advisory and professional services to the co-operative movement as a whole. These national co-operatives can then be affiliated to international organisations such as the International Co-operative Alliance. The control and management of secondary co-operatives is similar in form to that of primary co-operatives. The share holding members - the primary co-operatives - exercise policy control through the General Meeting and elect a management committee to act on their behalf. The management committee in turn appoints a chief officer to manage the operation under its direction. The bye-laws of secondary co-operatives, as with the primaries, set down the organisational rules and procedures and are subject to the approval of the responsible local authority. The operating surplus of a secondary is also used and distributed following the same principles as a primary co-operative. The federal co-operative can tend to become the masters of their member co-operatives rather than their servants. This situation can arise two reasons. Secondary co-operatives engaged in manufacture and trade can usually only operate efficiently given a high level of integration between their operations and those of their members. This requires a commensurate high level of discipline or some from of contractual compulsion. Secondly, the operational size and volume of trade of secondaries can be such, compared to individual primaries, that there is a strong tendency for them to behave as the dominant partner in the relationship. It is a tendency that has to be monitored and, where necessary, checked. The secondary co-operative has as its chief obligation, the provision of services to member co-operatives. Figure 1.7 Primary and secondary cooperatives relationships The potential of co-operatives is immense. Co-operatives appear well suited to the economic, social and institutional needs of development in the rural economy. Co-operatives can provide the mechanism to organise and mobilise people for self-help action in providing the services they require as a farming and rural community. As self-administered rural institutions, co-operatives have the capacity to reflect, and to respond to the needs of their members and, at the same time, to help foster attitudes of self-reliance and self-confidence within a framework of mutual aspirations and mutual action. In the delivery of services to their farmer-members they can provide an essential support to the development objectives of both the farmers themselves, and of national development policy. As business organisations co-operatives also have the capacity to act directly as development agencies. In their steady accumulation of business assets, the expanding range of their services, the acquisition and use of management skills, the employment of staff, they are involved in a positive and measurable development function. Moreover, the flexibility of co-operative organisation, for example through the potential of secondary co-operatives, offers opportunities for collective action in the development of agro-industrial enterprise to help support and strengthen local initiatives, and to give a further boost to rural development. There are few countries where co-operatives are not recognised as potentially important agencies of development. Unfortunately, the potential of co-operatives, and the extent of their development, has, in many cases, fallen for short of expectations. Low standards of performance, bad management, financial failure, corruption and misuse of funds, use of co-operatives for political ends, have been common features of co-operative enterprise in many countries. As a consequence, a great deal of understandable criticism has been levelled at the co-operative system, and many, including some members, have become cynical as to its ability to play an effective role in the development process. There are a number of problems which inhibit co-operative development and adversely affect performance, the more important of which are discussed below. Realism of objectives: Commitment and purpose are two important ingredients in motivation. Achievement of purpose is equally important. Objectives are expressions of purpose and expectation. To serve as motivators and guides to action they have to be attainable. The resources available have to be adequate to achievement of the objectives, and aspirations must be matched to ability. Neither members nor others should expect too much of co-operatives, including expecting them to expand too quickly. Most agricultural co-operatives in developing countries operate in commercial circumstances which any form of business enterprise would find difficult. Like their farmer-members, co-operatives have to operate in very marginal conditions. Their members are usually poor, often subsistence, farmers. High operating costs, low margins, relatively low turnovers, narrow stock inventories, seasonal trading patterns, exposure to the consequences of crop failure, high credit risk, fluctuating demand, are all familiar aspects of trading in such circumstances. Indeed, were it not so, it could be expected that private enterprise would have moved in to exploit a profitable market. It is not uncommon for co-operatives to be introduced to provide essential services because other agencies have either failed, or refused, to do so. Expecting too much of co-operatives is one fault, expecting too much too quickly is another. The mistake is frequently made that once a co-operative appears to be reasonably well established, injection of loan capital from some external source will permit it to rapidly expand its services. Such hasty injection of loan capital can strain management resources, encourage unwise risk-taking, weaken financial judgement, lead to overstocked inventories and promote loss-making enterprise. Co-operatives ought to be allowed to develop at a pace commensurate with the ability of members to manage, control and finance the development. They should be permitted to expand steadily like any other successful business enterprise, finding the resources to do so largely from surpluses made in their own trading operations. Business capacity should not be strained, for example, to meet the objectives of a government development policy. Revolution rather than evolution, will only prove detrimental to both the viability of the co-operative and to the attainment of the policy objectives. Conflict between economic and social purposes: Economic success is basic to the achievement of co-operative purpose for, in the long run, unprofitable enterprises cannot be sustained. However, co-operatives are constrained in the extent to which they can mimic the objectives and practices of capitalist enterprise without abandoning the fundamental values of the co-operative movement. For example, in the pursuit of business growth there can be a strong temptation to weaken member control and concede greater control to professional management, to make the creation of profit a paramount consideration, and to ignore the concepts of equity and fair dealing. The creation of collectively-owned capital by reinvestment of profits (surplus) is a highly important and desirable practice, but has its disadvantages in that if the element of members share capital as a proportion of the total capital structure becomes so insignificant that professional management can afford to ignore it and so ignore member control in making policy decisions. The outcome is an enterprise largely indistinguishable, except in name, from a capitalist enterprise. Misuse of co-operatives to pursue political objectives: Attempts to divert the purpose and resources of co-operatives to the support of particular political objectives adversely affects the co-operative movement. Factional dissension among the group distracts it from the achievement of its economic objectives. Members meetings can become political forums devoted to the advocacy of opposing views. In these circumstances many members can become disenchanted and lose interest, making it easy for a minority group to take control and to attempt to run the co-operative to serve its own ends. Co-operative principles require that membership should not be assumed to imply either political commitment or obligation. Co-operative systems organised and tightly controlled by governments as instruments of state economic policy are rarely conducive to the development of democratically-controlled, member-owned co-operatives. They are created to serve the objectives of politicians and planners objectives which may or may not coincide with those of the members who have little effective control of the enterprise. Case 1.5 Compulsory Co-operatives - A Contradiction In Terms Difficulties are encountered when the principle of the ldquovoluntary co-operativerdquo, is violated. Several countries have experimented with the compulsory co-operative. The most extensive such experiment was the ill-fated Ujamma programme in Tanzania. This required that the whole rural sector should effectively be administered and serviced through a system of village, district and regional administrations. Where it was considered necessary to rationalise the existing population distribution (11 million people were resettled), re-organise the infrastructure, or change patterns of cultivation to meet the objectives of the plan or the requirements of its administrators, this was done by decree. It was a massive effort of social engineering designed to radically and quickly reform and restructure an impoverished rural economy. It failed, largely because the bureaucracy was inadequate to the task it had taken upon itself and because the ability to exercise the necessary authority to secure acquiescence was not there. The Ujamaa experiment was of particular interest to those in the co-operative movement because a well-established co-operative system was destroyed to make way for it, and co-operative assets subsumed into the new structure by decree. When it was eventually abandoned efforts immediately began to recreate another co-operative system based largely on that which had been destroyed. Co-operative attitudes are not best cultivated by compulsion or by subjecting co-operative lsquomembersrsquo to the control and authority of bureaucrats 12 . Management: There has been a tendency to argue that a major cause of co-operative failure is the constraint imposed on the exercise of management skills and authority by the democratic nature of the enterprise. That being so, it is suggested that the authority of the General Meeting ought to be curtailed, leaving committees and managers to get on with the job of management. However, to do so would deny the purpose of the enterprise that being to enable people to run their own business. The solution lies in increasing and improving the level of member participation, not restricting it. Moreover, the standard of management within co-operatives is often inherently poor. As has already been said, co-operatives often come into being in markets and geographical areas considered as marginal in terms of profit potential by most other forms of commercial business enterprise. This being the case, the salaries, working conditions and work location that they are able to offer fail to attract top quality managers. A principal policy question in co-operatives is the procedure to be used in selling members produce. The alternatives are: outright purchase from members, or sale on commission. Outright purchase: In this case members are paid for their produce, at prices fixed by the co-operative, at the time of delivery, and the co-operative takes title to the produce. The co-operative then resells the produce at the most advantageous terms it can secure. Profits made on the transaction will be used first to meet the operating expenses, any surplus balance being used or distributed by decision of the General Meeting. This approach requires the co-operative to have high levels of funds available. Since, in the case of seasonal crops, a lot of produce is being offered within the immediate post harvest period, a serious adverse cash flow situation can arise. This can be alleviated by a two-stage payment system whereby members are paid part of the sale price at the time of delivery, and the balance after the co-operative has resold the produce. The main objection to outright purchase is that the co-operative carries all of the post harvest risks including: fall-off in demand, price fluctuation, reduction of produce value due to down-grading, deterioration giving rise to loss of quality and so value, failure of transport arrangements, spoilage, fire and theft. Some of these can be covered by insurance but most cannot. Generally, this method is only acceptable where the risks incurred are limited and can be reasonably well assessed. For example, where forward contracts have been negotiated. These risks being taken into account, outright purchase has the advantage of permitting the co-operative to add value to the crop and thereby add to the profits of its members. There are three principal ways in which a co-operative might add value to the commodity. Produce can be stored for sale at a later date when prices have improved Value can be added through primary processing of the crop. Cotton ginning is a good example of relatively simple and inexpensive process which is best done close to the fields. The value of baled ginned cotton, is normally considerably more than the sum of the value of the raw cotton plus the cost of ginning. And there is the additional value of the cotton seed Opportunity for adding value exists in the packing and presentation of the crop, or in the case of livestock, improvement in condition or quality before sale. Graded, washed and well packed fruits and vegetables can attract wider markets and premium prices. There is a caveat which ought to be added. Whilst price advantages gained by adding value are of direct benefit both to the co-operative as a whole and to individual members, the additional investment needed to capture the additional return, can be prohibitive. Apart from the risks incurred, outright purchase, storage, packing, processing, transportation, marketing etc. require substantial financing. Moreover, these more complicated operations call for a high level of management skill and judgement, which is frequently a scarce resource. Sale on commission: This far simpler, virtually risk-free, operation leaves the co-operative as the producers agent with no legal title to the goods. All attendant risks therefore remain with the individual producers. The co-operative collects produce from members and sells in the most advantageous markets. It then deducts a commission at a previously agreed rate from the sale price. The co-operative meets the cost of its expenses from its commission income. With the sale-on-commission system the co-operative avoids the need to finance crop buying and it minimises its risks. In addition, much simpler operating procedures are required and expenditure can be more accurately matched to anticipated income. The main disadvantage of sale-on-commission is that neither the member nor the co-operative is able to exploit possible price improvement. Another is the possible delays in the producer receiving cash for his crop. No payment will be made by a co-operative until it has been paid by the customer. Apart from the time taken in an lsquoopen marketrsquo for crops to be sold, it is by no means unknown for parastatal agencies to be dilatory in paying-out for produce received from co-operatives. The argument in favour of agricultural and food enterprises, in developing countries, becoming more customer oriented is a compelling one. Average incomes in developing countries are low and so the marketing systems which deliver agricultural and food products have to be efficient if they are to deliver food and other products at affordable prices. Moreover, when a country does experience economic growth this is normally accompanied by an acceleration in the rate of urbanisation. The end result is that greater demands are placed upon farmers. Marketing systems have to be capable of signalling the needs of both consumers and industrial users of agricultural outputs to the farmers. The marketing system must also motivate and reward all of the parties whose participation is essential to the delivery of commodities and products in the quantities and at the qualities demanded. Yet another development which has increased interest in marketing practices of late is the move towards market liberalisation as part of economic structural adjustment in many developing countries. The marketing concept suggests that an organisation is best able to achieve its long term objectives by orientating all of its operations towards the task of consistently delivering satisfaction to the customer. In order to do so, the organisation must begin by getting to know what it is that will satisfy the customer. The marketing system as a whole has to be customer orientated. A marketing system comprises the functions of marketing (buying and selling, storage, transport and processing, and, standardisation of weights and measures, financing, risk bearing and market intelligence), and the organisations that perform them. Marketing systems have at least four sub-systems, these being production, distribution, consumption and regulation. These sub-systems often have conflicting interests that have to be resolved if the system as a whole is to be efficient and effective. The food industry is a major user of agricultural products and commodities. As disposable incomes increase in developing countries, the food industry will have to meet new and different needs from its more affluent consumers. The food industry will, in turn, require agriculture support its efforts to meet the new challenges and opportunities. In particular, the food industry will demand that agriculture produces a wider range of qualities in its products and commodities with a greater proportion of total supply in the top grades downward pressure will be exerted on agricultural production costs agriculture will be required to supply throughout the year rather than seasonally reliability in the quantity, quality and timing of supplies will become the major determinant in supplier selection innovative producers who can provide differentiated products and products that make food processing easier or cheaper are more likely to survive than those who persist in producing traditional products using traditional farming methods and issues related to the health aspects of food consumption will become increasingly important. The institutions and enterprises that make up a marketing system are critical components of that system. In this chapter three types of marketing organisation have been discussed: private enterprise, marketing boards and co-operatives. These were chosen because historically they have been principal components of the food and agricultural marketing systems of so many developing countries. Private enterprise has often proven to be more efficient (technically and financially) than other forms of enterprise and especially those that are agents of government. Moreover, private enterprise has demonstrated higher levels of capacity utilisation, more timely decision making, greater adaptability to changing market circumstances, higher levels of motivation and personal initiative, and to have better experience and expertise than other forms of agribusiness enterprise. Marketing boards - both food marketing boards and export marketing boards - usually have the function of intervening in the marketplace to aid the process of efficient and orderly marketing. Very often a marketing boards chief goal is to help improve the income of smallholders. Marketing boards generally handle durable products. A marketing board can expect to be judged in terms of its contribution to orderly and efficient marketing, the extent to which it counters the monopolistic practices of market intermediaries and the transference of the balance of power, in the distribution channel, in favour of producers. As a generalisation it has been concluded that agricultural and food marketing boards have failed to achieve expected results in developing countries. It would appear that this is due to social objectives compromising commercial objectives, governments use of the boards as instruments of fiscal policy, manipulation of the marketing boards prices to encourage increased production and contain retail prices for staple foods, and the placing of political appointees to the management of the boards. The formation of co-operatives is often motivated by their potential in: protecting smallholder and small scale business from economic exploitation stimulating self-reliance and improving the return on investment of economically disadvantaged individuals or groups. The management structure of co-operatives - whether these are primary or secondary - invariably has three tiers: the General Meeting of Members, the management committee and the managersecretary. In the case of primary co-operatives all members have equal voting power and members are rewarded in relation to the amount of trade they do with, or through the co-operative and not in accordance with the amount of capital which they have invested in the co-operative. Secondary co-operatives, whose members are primary co-operatives sometimes accord voting power in proportion to the relative size of the primary co-operatives that make up their membership. The chief weakness of co-operatives are: the fact that they operate in marginal economic conditions, they have social as well as economic objectives that are sometimes in conflict with one another, co-operatives are sometimes used to achieve political ends which divert them from their legitimate mission and because of very limited resources and lack of status, they experience difficulty in attracting high calibre people to management positions. Food marketing boards From your knowledge of the material in this chapter, give brief answers to the following questions below. Highlight the main conflicts of interest between the key players in agricultural and food marketing system. What are the 3 physical functions of a marketing system mentioned by Khols and Uhl How is value added to a product or service What is the principal goal of the standardisation of weights and measures for agricultural products What was the Ujamma programme According to Adam Smith what is the purpose of production Name the 4 sub-systems that Rosson suggests comprise agricultural and food marketing systems. In the past, what has been the main function of marketing boards in developing countries Explain the term lsquorapid evacuationrsquo. What are the difficult commercial circumstances in which co-operatives often find themselves Explain the term lsquotertiary co-operativesrsquo. What are the 2 ways in which co-operatives purchase produce from their members 1. Kriesberg, M.(1974) ldquoMarketing Efficiency In Developing Countriesrdquo. In: Marketing Systems For Developing Countries. (Eds.) Izraeli, D. Izraeli, D. and Dafna 2. Dixie, G. (1989), Horticultural Marketing: A Resource And Training Manual For Extension Officers . FAO Agricultural Services Bulletin, Food and Agricultural Organization of the United Nations, Rome, pp. 1ndash5. 3. Gaedeke, R. M. and Tootelian, D. H. (1983) Marketing: Principles And Applications . West Publishing Company, Minnesota, p.11. 4. Rosson, P. (1974) ldquoChanging Traditional Distribution Systems: Fish Marketing In Tanzaniardquo, Journal of Physical Distribution . No. 4, Vol. , pp.305ndash316. 5. Freivalds, J. (1985) ldquoWhite Elephant Tales: Venezuelas Cassava Processing Plantsrdquo. In: Success In Agribusiness . Gower Publishing Company Limited, Aldershot pp.47ndash52. 6. Kohls, R. L. and Uhl, J. N. (1990) Marketing Of Agricultural Products, 6th edition, New York, Macmillan Publishing Company pp. 18ndash21. 7. Kotler, P. (1988), Marketing Management: Analysis, Planning, Implementation And Control . Prentice-Hall, New Jersey, p.16. 8. Selassie, H. G. (1995), International Joint Venture Formation In The Agribusiness Sector . Avebury, Aldershot, p. 9. Abbott, J. (1987), Marketing Enterprise For The Developing World . Cambridge University Press, pp. 181ndash187. 10. Bryceson, D. F. (1985), ldquoThe Organization Of Tanzanian Grain Marketing: Switching Roles Of The Co-operative And The Parastatalrdquo. In: Marketing Boards in Tropical Africa . (Eds.) Arhin, K. ESP, P. and Van Deer Laan, L. KPI Limited, 11. Arhin, K. ESP, P. and Van Deer Laan, L. (1985), Marketing Boards in Tropical Africa . KPI Limited, pp. 1ndash18. 12. Dinham, B. and Hines, C. (1983), Agribusiness In Africa . Earth Sources Research Ltd. London, pp. 115ndash119.
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