Updated: Jan 28
Marketing has mainly contributed to the current markets that are shaped by public regulations, cultural customs, civic norms, and private contracts. Marketing can highly play a role as a driving force behind the unsustainable growth of overconsumption of consumers. However, marketing is also playing a part in the solution for sustainable development especially for agriculture as this brings benefits not only for the environment but also for the farmer communities.
Agriculture marketing plays an important role not only in stimulating production and consumption behavior but enhancing the pace of economic development. When the marketing role has done well, it leads both ways for 2 sides; to higher profit for producers and greater satisfaction for consumers. Agri-food markets, in particular, focus on demand and supply across countries and time-zone throughout the entire food system of the supply chain, starting from farm production, harvesting, processing, packaging, transportation, and including the final step of consumption of retail food products.
Presently, agri-food markets have been changed in the structure especially in developing countries.
Food supply chains have shifted from local and fragmented chains to geographically, due to this has led to a reduction of traditional traders especially in rural areas while the urban wholesale markets are sharply increasing.
Because of this, farmers from rural areas with traditional traders often have limited outlets for their products and are often bound by traditional trading relationships, which may include more credit and benefits to the trader sides.
Besides, opportunities for farmers to take advantage of agro-food marketing as it is greatly developed are therefore restricted. Farming communities in rural areas which are majority coming from small and marginal farmers, who are not yet organized enough to take advantage of world agri-food markets. Lack of resources, inadequate market access, poor knowledge of post-harvest processing, and weak infrastructure have a tendency to put small farmers into disadvantaged positions in competitive agri-food markets. These also combined with the lack of group organization which weakens their bargaining capacity for trading.
To enable small and marginal farmers to earn the advantages of globalization, the government must play an active role in empowering them to take advantage of the market opportunities. There are 3 ways that can be done apart from the government supports to optimize the agriculture marketing system in order to enforce the benefits of farmers in rural areas.
Transparent Policies: we can start by formulating and implementing policies that are transparent with a provision for accountability.
Agriculture Technology: developing appropriate agriculture technologies and practices which match with each condition on every farm. We need to give active solutions to farmers especially to those who do not have access to those aspects.
Trade Marketing Channels: The local government should create fair trade marketing channels for small-farm products especially in marginal areas with poor infrastructure where farms tend to be small, numerous, and scattered. The marketing channel is involving selling and buying, exchanging small surpluses of farm products in local markets. This can give direct transactions between producers, intermediaries, and consumers.
Why Fair Trade is the answer?
When we think about fair trade, the first thing that comes across to mind is a farmer and producer being paid a fair price for their product. Fair Trade in this context means more sustainable trading. It means a system that seeks greater equality in international trade agreements. The rights of workers and farmers in marginalized nations become a top priority. While Fair Trade has tremendous benefits for farmers, however, this platform can be easily shifted into disadvantages. For instance, the story of Fair Trade coffee farmers with strict certification requirements has resulted in uneven economic advantages for coffee growers and lower quality coffee for consumers.
As Fred Pearce (Confessions of an Eco-Sinner, 2008) said “fair trade pays a premium, but on a global coffee price that remains catastrophically unfair to the coffee farmers”
Thus in every local channel for fair trade, the local government should actively involve and monitoring all activities which bring benefits the most to the local farmers.
A fair trade ground rule is to use a market-based approach that empowers farmers to get a fair price for their harvest, helps workers create safe working conditions, and provides a decent living wage.
One of the success stories of Fair Trade coffee farmers in Indonesia is Koperasi Kopi Wanita Gayo (KKWG), originally from rural Aceh, Indonesia. This Fair Trade cooperative is led by women coffee farmers, the first all-women coffee cooperative in South East Asia.
In 2015 the cooperative sold more than 13 MT of coffee on the Fair Trade market, enabling the women to make their own financial and business decisions. On their first Fair Trade premium, they specifically focused on training to improve knowledge in coffee farms and soil fertility.
*Traditional traders: is associated with the distribution network of small retailers, dealers, wholesalers, and distributions. It is a network that serves localized customers demand through regular orders with short lead times and varying rates.
*Traditional trading relationship: when people, firms, or countries trade, they buy, sell or exchange goods between themselves in the short term period with a lack of information sharing and monitoring the transaction.
*Fair Trade: an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships.
*Surpluses: describes products that remain sitting on storage shelves, unpurchased.
*Fair Trade premium: an extra sum of money paid on top of the minimum Fair Trade price. The money from the premium goes into communal funds which are for the benefit of workers and farmers.
Author: Felliesia Regina (Horticulturist - Cofounder of AgriBioTechX)
Source: Fair Trade International | Google
*Note that any firm mentioned above does not sponsor this blog.