A. Preliminary Activity Check
B. Criteria for Screening and
Prioritising Market Improvements
C. Market Survey Check
D. Marketing Policy
E. List of Further Reading on
A. Preliminary Activity Check
This appendix provides a check list of the basic information
and issues that will need to be considered in formulating a market
infrastructure development project. Subsequent detailed costing, project
feasibility studies, final design, preparation of bills of quantities and other
tender documents, and final construction are not considered here.
1. INITIAL BACKGROUND INFORMATION
- has a basic list of markets been drawn-up
and their locations mapped?
- have official statistics on agricultural
production and urban consumption and background information on marketing been
- have arrangements been made to undertake
preliminary surveys of existing markets?
2. FACTORS TO BE CONSIDERED IN IDENTIFYING THE PROJECT AND
DEVELOPING A DESIGN BRIEF
The Policy Context
- has the basic purpose and function of the
project been defined?
- how does this fit in with other policies?
- what are the priorities in event of conflict
with other policies?
- what is its relationship to and impact on
- what are the main operational elements or
functions to be included in the project?
- what is the demand for the project and its
relationship to existing facilities?
- who are the likely stakeholders and how
will they be involved in the planning stage?
- what are the available financial resources
- are there any defined capital and operating
cost limits and are there any time limits for expenditure?
- what building standards are required to
Marketing Operational Factors
- what are the activities to be incorporated
in the project?
- what specific factors govern the layout,
relationships and priorities of the project?
- are there specific occupational and work
- are there specific environmental requirements?
- what will be the method of operation and
what types of equipment will be required?
- is there any likelihood of change in the
future and what flexibility is required?
- what will be the administrative and management
- is it possible to define details of staff
- what outside services (e.g. cleaning, caterers)
or franchises might be used?
- what communications systems are required?
General Factors in Market Master Plan Preparation and
- what are the main features of the sites
- what are the characteristics of the site(s)
and what planning and other constraints are likely to effect the project?
- what type and quality of internal and external
environments are envisaged (heated or cooled, landscaped, etc.)?
- are there critical dimensions and/or areas
- (such as a target turnover
- per square metre) or other specific requirements?
- are specific groupings of functions in the
- what are the basic accommodation requirements,
such as the number and size of traders units?
- has the traffic (pedestrian and vehicular)
system been clearly defined?
- are specific provisions under construction
and environmental legislation required?
3. FORMULATING THE MARKET PROJECT
Analysing Market Conditions
- has the information on existing throughput
and the market channels been correctly analysed?
- have projections been made of future market
- have estimates been made of sales space
requirements and site area?
- have ancillary needs and services been defined?
- are the targets and priorities for the development
- has the management structure been defined
- are the staff training needs defined?
Designing the Project
- has an overall master plan of the market
site been prepared?
- are there preliminary designs for individual
buildings and infrastructure components?
- have specialised equipment needs been defined?
Evaluating the Project
- has an assessment been made of the potential
benefits of the project in meeting its objectives?
- have capital and recurrent budgets and cash
flow forecasts been prepared?
- have the development options been evaluated
and ranked so a clear solution is identified?
- have the financial and economic returns
been calculated for the preferred option? (pre-feasibility study)
- has the preliminary master plan been adjusted
to conform with evaluation results and finance available?
- have the legal, environmental and social
impacts of the project been evaluated?
- have the mode of implementation, sources
of finance and follow-up actions been defined?
B. Criteria for Screening and
Prioritising Market Improvements
Among rural and urban retail markets there may be a large
number of potential candidates for improvement. At the identification stage it
will be necessary to prioritise these so that a realistic improvement programme
can be drawn-up. The factors used in the selection criteria and the
prioritisation process can be given equal weighting, can be ranked (so that a
particular factor which is of importance to the development programme can be
emphasised) or can be used in a sequential manner to provide a decision
The most important criteria for selection of markets for
improvement are likely to be whether:
- the markets are presently in an unimproved
- they have a special function, such as an
assembly market (used by producers) or are serving a large rural or urban
catchment area. Rural primary markets and urban street markets that have solely
a local retail function may not be either financially or economically viable;
- they trade in fresh produce (with the majority
of permanent and visiting traders selling fresh fruits, vegetables, fish or
- the sites are on land already owned by local
government, a market body or authority, or the local community;
- they can be subject to a formal agreement
where the developments would be implemented through market committees established
with the agreement of the traders;
- there is a willingness on the part of the
market traders to improve the efficiency of the present market operations
and to accept higher fee or rental charges as a condition of improvements
- assurances have been obtained that adequate
financial revenues from the improved markets could be generated to cover all
operational and maintenance costs and provide funds for further market improvements;
- the private sector is willing to take responsibility
for improving individual sheds and stalls, and the project limits its activities
to investment in the upgrading of common basic infrastructure,
- site preparation, fencing, parking areas, internal road works and main
covered sheds and open sales areas;
- a simple surface/stormwater drainage system, sanitary accommodation
and a water supply; and
- garbage collection points, collection carts and shade tree planting.
RANKING OF MARKET PROPOSALS
Generally, market improvements are only likely to be viable if
the levels of investment are relatively modest. The incremental benefits of
undertaking the market improvements should provide sufficient revenues to cover
all operating costs, including putting aside a fund for future market expansion.
Revenues are often unlikely to be sufficient to cover repayment of capital and
interest Ð even assuming a long repayment period and a grace period before
repayment. The returns are very sensitive to the daily charges. Thus, after
meeting the selection criteria outlined above, the short-list of proposals
should be evaluated and ranked according to:
- whether they make a significant contribution
(in terms of volume turnover) to the trading of fresh produce;
- their importance in the overall market system,
with priority given to unimproved major markets;
- whether it is possible to use an improved
existing market site. A new market site should only need to be considered
if it is necessary to replace an existing congested site or if there is an
urgent need for expansion because of population growth; and
- whether they comply with the local development
planning policy framework:
- the improvements can be linked to other related programmes, such as
parallel marketing initiatives, the rehabilitation of rural roads or small-scale
civil works (drainage and flood control works, culverts and bridges, in
areas adjacent to marketing access roads) that would allow the market
to function more effectively;
- the local community is willing to make an undertaking to maintain the
facility once it has been improved;
- the selected markets are compatible with areas targeted under a needs-based
policy (such as high density areas deficient in services) or a sustainable
- there is a correspondence with existing lending, donor and NGO programmes;
- there is a lack of alternative funding sources; and
- there is the possibility that a programme of works could be packaged
together to form viable construction contracts for a series of market
C. Market Survey Check
The following appendix provides a check list of the type of
preliminary surveys and studies needed for identification and pre-feasibility
studies for design of a market development project. Depending on its
availability the information can be derived from desktop studies (such as
published statistics and maps, other studies, planning reports and policy
statements) or from preliminary surveys. As surveys are costly and time
consuming, it is important to only collect the information needed and to avoid
undertaking too early the type of detailed surveys which will be needed for a
full feasibility study. *
* Details of survey methodologies and examples
of questionnaires are provided in the FAO Agricultural Services Bulletins No. 90
(Wholesale markets: planning and design manual, Chapter 11, 1991) and No. 121
(Retail markets planning guide, Chapter 3, and Annexes A and B,
1995).1. BASIC PLANNING INFORMATION
The information required would normally include the
- What are the existing wholesale and retail
market channels for fresh produce and other foodstuffs? Where are the products
sold (in wholesale and retail markets, supermarkets, through institutional
buyers or through direct sales to consumers) and what is the estimated throughput
and role of these different channels?
- Background details on existing traders,
their type, location and scale of operation.
- Estimated existing and projected throughput
of the new market facilities. For simple markets this can be based on a survey
of just the overall quantities of produce traded. For assembly and wholesale
markets a more comprehensive food balance approach is needed:
- the quantity of production in a sub-region or town, including what
is produced at home or in hobby gardens;
- the quantity of horticultural and other food supplies into a sub-region
or town - from elsewhere in the country and from abroad;
- products not marketed because of post-harvest losses; supplies to agri-processing
facilities; what goes into temporary storage; what is used for animal
feed and seed requirements; and what is directly consumed by the consumer;
- the existing and projected consumption of food products in the sub-region
or town, including that coming from the consumers own sources; and
- what would be the share of trade that is likely to go through the new
market, in the short and long term.
- Legal and financial data relating to the local authoritys marketing
department, a market authority or private company.
- Details of any relevant background studies on horticulture and/or marketing,
including existing and planned wholesale and retail trade developments.
2. PHYSICAL CHARACTERISTICS
Although detailed design will not be undertaken until the
feasibility stage some data on the physical characteristics of the market site
will be needed to prepare an outline master plan. The scope of the information
required, which would usually be derived from desk and on-site studies, would
normally include the following:
- market-site location map (and/or aerial
photography) and a calculation of its extent;
- details of local planning factors, including
the compatibility of the market with surrounding land uses;
- a broad description of topography and soil
conditions, including flood and other hazard risks;
- details of the existing (and any proposed)
traffic movement patterns, such as the number of vehicles and the proportion
of different types of vehicles;
- details of any rights-of-way, drainage and
pipeline easements and other legal restrictions on site use;
- the presence of mains infrastructure (power,
drainage, water supply, sewerage and solid-waste collection);
- the existence and condition of existing
buildings and equipment; and
- information on any special physical requirements.
3. DETAILED INFORMATION FOR FORMULATING WHOLESALE MARKET
With wholesale market projects a more rigorous approach is
required in order to make a realistic evaluation. This necessitates further
preliminary design work to be undertaken so that a reasonably comprehensive cost
estimate and financial analysis can be made. For the purposes of the financial
analysis a detailed investigation will need to be undertaken, and this should
include all of the main uses* in the existing wholesale market site and any
proposals for the future facility. The following information will be
- a summary of the general characteristics
of each of the main uses (i.e. working hours and throughput);
- estimates of present and likely revenues
from renting space and from other income sources, such as the hire of equipment
and parking charges;
- the overall area of buildings, the number
of traders, size of trading space and the type of facilities provided, including
equipment, both existing and proposed;
- the numbers and salaries of management personnel
and the services that are provided;
- the capital cost for the future site development
and the construction of buildings, sub-divided into infrastructure, buildings
- the recurrent cost of services and utilities;
- information on the site value and the level
of land taxes and other legal charges.
* Such as: administration buildings; fruit and vegetable retailing
or wholesaling; fruit and vegetable producers retailing or wholesaling; potato
retailing or wholesaling; flower and plant retailing or wholesaling; meat
retailing or wholesaling; dairy, fish and poultry retailing or wholesaling;
dry goods retailing or wholesaling; customs and bonded goods; and ancillary
D. Marketing Policy
The following appendix outlines a number of policy issues
which may have a direct or indirect influence on the design of a market
1. DEFINING POST-HARVEST RESEARCH ACTIVITIES
High levels of post-harvest losses of crops, both in the field
and during storage and marketing, is often a priority problem. Post-harvest
research organizations usually emphasise food technology and post-harvest
management (processing, preservation, handling, storage, marketing, loss
reduction and harvest maturity) of farm products and by-products, but such
activities are not always strongly linked to the needs of the sector. A
marketing infrastructure programme may seek to influence the direction of such
research in order to address specific post-harvest issues,
- the requirements for new extension training
- improved on-farm processing and storage;
- improved packaging, handling and transportation
- improved operational procedures at pack-house
and market level.
2. QUALITY STANDARDS AND PACKAGING METHODS
In many countries produce may either be loaded loose in trucks
or packed in unsuitable cartons. Market improvements may include the promotion
of an improved packaging system. This needs to be approached with some caution
as it can result in an inefficient use of transport, either with return loads of
empty non-nesting crates or with the traders having to double-handle the produce
to put the produce in their own crates.
3. LEGAL FRAMEWORK FOR MARKETING ACTIVITIES
Interventions possible in a marketing system are largely
determined by the regulatory framework for marketing. Frequently, under
legislation, municipalities are given the mandate to establish and manage both
retail and wholesale markets, sometimes with the mandatory requirement that all
fresh produce sold in urban areas should pass through the wholesale market
system. However, the legal context for marketing activities may also be lacking
and this could prevent the development of the required infrastructure. This may
have a direct impact on the market design if new institutional arrangements are
to be assumed as the basis for operating the market. In that case, a special
decree for the regulation of markets might become a precondition to implementing
the project, requiring the general scope of a new or revised Marketing Law to be
E. List of Further Reading on
ABBOTT, J. C., & J. MAKEHAM, 1979. Agricultural
economics and marketing in the tropics, Longman, Intermediate Tropical
Agriculture Series, Harlow, England.
FAO, 1986. Marketing improvement in the developing
world, FAO Economic and Social Development Series No. 37, FAO,
FAO, 1989. Horticultural marketing: a resource and
training manual for extension officers, FAO Agricultural Services Bulletin
No. 76, FAO, Rome.
FAO, 1989. Prevention of post-harvest food losses:
fruits, vegetables and root crops, FAO Training Series No. 17/2, FAO,
FAO, 1991. Wholesale markets : planning and design
manual, FAO Agricultural Services Bulletin No. 90, FAO, Rome.
FAO, 1993. Guidelines for the design of agricultural
investment projects, FAO Investment Centre Technical Paper No. 7,
FAO, 1993. A guide to marketing costs and how to
calculate them, Marketing and Rural Finance Service, FAO, Rome.
FAO, 1995. Retail markets planning guide, FAO
Agricultural Services Bulletin No. 121, FAO, Rome.
FAO, 1997. Market information services - theory and
practice, FAO Agricultural Services Bulletin No. 125, FAO, Rome.
FAO, 1999. Wholesale market management guide,
FAO Agricultural Services Bulletin (in preparation), FAO, Rome.
KUMAR, K., 1993. Rapid appraisal methods, World
Bank Regional and Sectoral Studies, Washington DC.
MAGRATH, P., 1992. Methodologies for studying
agricultural markets in developing countries, Marketing Series, Volume 2,
Natural Resources Institute, Chatham, Kent.
PRICE GITTINGER, J., 1972. Economic analysis of
agricultural projects, The John Hopkins University Press,
HINE, J., 1972. Transport and Marketing Priorities
to Improve Food security in Ghana and the rest of Africa, Overseas Centre,
Transport Research Laboratory, Crowthorne, Berkshire, UK.
UNDP, 1992. Handbook and guidelines for
environmental management and sustainable development, Environment and
Natural Resources Group, United Nations Development Programme, New
financing be arranged?