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Marketing of non-farm products in rural areas
Siraj-ul-Hasan
Before describing the marketing mechanism of non-farm products in rural areas, it is necessary first to name and identify these. In the context of rural development, we have to decide which should be termed non-farm products.
Generally, these are synonymous with the manufactured items, but in economic terms these are products which, after processing, become value-added and are traded at premium.
Such activities include tobacco curing, small scale oil-seed crushing, tanning industry on cottage scale etc., besides, milk collection, wool shearing, dates curing, other fruits and vegetables primary processing, raw sugar (Shakkar) and gur-making are some other activities producing the non-farm products.Such small scale industries in rural areas have expanded.
An overview of agricultural marketing: Unlike complex and multi-sectoral operations in urban areas, marketing in rural area is based on the traditional way of assembly and distribution. Bulk of the function is preformed by 'the middleman' or 'the distributor', such as a whole-seller, retailer, or a broker. These also include a multitude of traders-cum-peasants in 'open markets'.
In a comparatively big area - where production of a particular commodity, like chilli in Kunnri, district Mirpurkhas (Sindh), is concentrated, - some permanent markets have tipped.
In the past various development programmes were devised and implemented for increasing the quality of life of the rural people, but these could not produce the desired results, rather helped in creating awareness in regard to improved technology.
The reason for failure was the single purpose approach and the un-sectoral nature and treatment. None laid emphasis on the revival and development of rural marketing of farm and non-farm products. All postulated the ignorance about the modern practices which had been the basic cause of low production.
In other words these past programmes were production-oriented with little stress on the marketing. They failed in passing on the benefits of increased production to the small farmer.
Wider benefits can only be achieved through an efficient marketing system, particularly in the rural markets as these are basic contact points for small farmers to dispose of their produce.
The Integrated Rural Development Programme (IRDP) had some innovative features with peoples participation in decision-making, planning and implementation through the establishment of the branches of various nation-building departments at different focal points. But these too, could not prove effective. The IRDP had the conceptual short-coming of ignoring the marketing aspect. Its centres remained pre-occupied in the supply of various input items.
In view of various constraints, the rural market development and revitalization approach may bring better results. The insufficient marketing facilities compel small farmers to either sell their produce to the itinerant merchants at unfavourable prices, or transport it to some nearby markets with high cost of packaging and transportation, and then to be exploited by the market functionaries.
The evaluation and development of markets have been the result of the availability of surplus goods for exchange. The villages were largely self-sufficient, therefore, the movement of goods continued within, or at the most to nearby villages.With the development of communications and irrigation works, the self-sufficient farming system gave place to the cultivation of cash crops like cotton, sugarcane and oil-seeds.
Consequently, the rural markets of such areas developed from small centres to big ones where the marketing of produce assumed importance for the primary producer. The big farmer shifted from the rural to sub-urban or the urban wholesale markets in expectation of better deals. Some of these regulated under the Agricultural Produce (Market) Legislations became more beneficial. The regulation was aimed at improvements in the practices and scaling down the charges.
These markets are not governed by any legal framework. However, in Punjab a concept of the "Feeder Market" has been translated into practice according to which rural markets have been linked with the adjacent regulated wholesale markets in urban areas. In fact it is an exercise towards revitalization of rural markets under a legal cover.
Non-farm products marketing: The marketing mechanism of non-farm products in rural areas are not problematic like that of the farm produce. Business transactions in non-farm products like edible oils, oilcakes, raw sugar and gur, domestically processed fruit and vegetable products (chutney, achaar, murabba etc.,) cured date, hides and skins, animal bones, wool and hair, plus the items of inputs like seeds, fertilizers, pesticides etc., also take place mostly through commission agents, mostly in the same markets where the farm produce is brought for sale.
A typical example of such a mixed rural market is the Shah Faisal Grain Market in Ghotki. Here traders deal both in farm and non-farm products.
The price determination is based on the open auction of the produce. The price is mostly not fixed;it is negotiated and agreed between the buyer and the seller. The marketing mechanism of certain products like wool and hair resembles with that of farm products. The products which are storable for longer period have a wider market with higher profit margin. Its marketing sometimes is problematic due to lack of proper storage and transport facilities.
Suggestions: Commodities subjected to some small scale processing are the leftover of fresh market, while the end-products are of sub-standard quality. Therefore, it is necessary to discourage this practice, specifically in case of fruits and vegetables.
As most rural areas are deficient in proper infrastructure, therefore communication, transportation, credit on easy terms, and small processing machinery may be provided there.
To end the subservient marketing status of non-farm products, separate walled markets should be established.
The non-farm products of greater importance may be processed in rural areas that have comparative advantage for the same.
A survey may be undertaken in prospective areas, and pilot projects may be prepared and funds may be obtained from the World Bank, the Asian Development Bank, the UNDP, etc,.
Arrangements for proper marketing of items of necessity of rural people like textiles, electric appliances, electronic goods should also be made.
Business Recorder.
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