Chapter 6
Commodity Marketing

The term ‘commodity’ is commonly used in reference to basic agricultural products that are either in their original form or have undergone only primary processing. Examples include cereals, coffee beans, sugar, palm oil, eggs, milk, fruits, vegetables, beef, cotton and rubber. A related characteristic is that the production methods, postharvest treatments and/or primary processing to which they have been subjected, have not imparted any distinguishing characteristics or attributes. Thus, within a particular grade, and with respect to a given variety, commodities coming from different suppliers, and even different countries or continents, are ready substitutes for one another. For example whilst two varieties of coffee bean, such as robusta and arabica, do have differing characteristics but two robustas, albeit from different continents, will, within the same grade band, have identical characteristics in all important respects. Agricultural commodities are generic, undifferentiated products that, since they have no other distinguishing and marketable characteristics, compete with one another on the basis of price. Commodities contrast sharply with those products which have been given a trademark or branded in order to communicate their marketable differences. Differentiated products are the subject of the chapter which follows.

This chapter is largely descriptive and is intended to merely to give an overview of commodity marketing. Five categories of commodity are discussed in this chapter: grains, livestock and meat, poultry and eggs and fresh milk. Since this textbook ostensibly deals with agricultural and food products marketing and marketing systems internal to developing countries, the exclusion of non-food crops such as tobacco, cotton and rubber, was deliberate. If products like these had been included then de facto, the discussion would have been oriented towards export or international marketing. A companion textbook to Agricultural and Food Marketing Management, entitled “Global Marketing”, has been developed to deal with these topics in some depth.

Chapter Objectives

The objectives of this chapter are to provide the reader with an understanding of:

• The principal stages of agricultural commodity marketing

• The main participants in commodity marketing systems and the roles which they perform, and

• The essential features of the assembly, transporting, grading, processing and consumption of selected agricultural commodities.

Structure Of The Chapter

The chapter has a simple structure. Eight stages of commodity marketing are identified at the beginning of the chapter. This is a general model and therefore not all of the stages it describes are equally applicable to the commodities selected for discussion. This being so, certain stages are given more or less emphasis; and for some commodities specific stages are omitted altogether from the discussion. Thus the chapter gives a generalised impression of agricultural commodity marketing.

Stages in a commodity marketing system

A commodity marketing system encompasses all the participants in the production, processing and marketing of an undifferentiated or unbranded farm product (such as cereals), including farm input suppliers, farmers, storage operators, processors, wholesalers and retailers involved in the flow of the commodity from initial inputs to the final consumer. The commodity marketing system also includes all the institutions and arrangements that effect and coordinate the successive stages of a commodity flow such as the government and its parastatals, trade associations, cooperatives, financial partners, transport groups and educational organisations related to the commodity. The commodity system framework includes the major linkages that hold the system together such as transportation, contractual coordination, vertical integration, joint ventures, tripartite marketing arrangements, and financial arrangements. The systems approach emphasises the interdependence and inter relatedness of all aspects of agribusiness, namely : from farm input supply to the growing, assembling, storage, processing, distribution and ultimate consumption of the product.

The marketing systems differ widely according to the commodity, the systems of production, the culture and traditions of the producers and the level of development of both the particular country and the particular sector within that country. This being the case, the overview of the structure of the selected major commodities marketed, which follows, is both broad and general. The major commodities whose marketing systems will be discussed in this chapter are, large grains, livestock and meat, poultry and eggs, cotton, fruit and vegetables and milk. Table 6.1 identifies the main stages of agricultural marketing and this provides a loose framework around which to structure the discussion of the marketing of these commodities.

Table 6.1 Stages of agricultural marketing

Reporting on the participation of the government, in commodity marketing, in sixteen Asian and Pacific countries, the Asian Productivity Organization noted¹ that:

“In all the reporting countries, the government played an important role in the marketing of farm products. The nature and degree of involvement, however, differed depending on the commodity and marketing functions. In general the involvement was greatest in the case of grains, particularly, rice and wheat, which were staple products in most countries. In some cases, government or state-owned enterprises were also directly involved in the marketing of specific industrial/commercial crops such as tea, rubber, sugar, oil palm and coconuts, which were major export crops of the region. Governments played lesser marketing roles in the case of other farm products such as fruits and livestock.”

Had the study been extended to other parts of the less developed world then a crop such as maize might have figured more prominently but otherwise the findings would have been the same. Governments are particularly interested in influencing the production and marketing of staple crops since the price and level of availability of these impacts upon household food security and farm incomes. These in turn have implications for political stability and the extent to which there are inflationary pressures on wage rates. Government interest export crops is due to the potential in earning foreign currency.

Grain marketing

The principal participants in grain marketing systems are producers, marketing boards, grain elevators, brokers, millers, livestock farmers, animal feed processors, millers, other food manufacturers, grain exchanges and exporters.

Figure 6.1 A typical grain marketing system

The physical marketing system begins with the assembling and collecting points located in the rural areas close to the producers. The next stage involves the storage areas at the national grains marketing facilities owned and operated by an appointed parastatal and/or private grain elevator; and the grain milling companies which in some countries are privately owned and in others are government enterprises. Although the size and methods of operation differ from country to country, the local assembling and collection points usually have grains brought to them either directly by the farmer-producers themselves or by rural entrepreneurs. Thus in the case of grain, the assembly and storage functions are typically combined at this marketing stage. In countries where a marketing parastatal has been given a monopoly in grain trading, private traders are sometimes authorised to buy grains from farmers (i.e. local buying agents) on behalf of the parastatal.

A common feature of grain marketing systems is the co-existence of a government marketing agency (parastatal) and a parallel private marketing channel with myriad's of private traders. Public grain marketing agencies are government appointed parastatals assigned to control or regulate the system. Prior to market liberalisation marketing parastatals were recognised, in many developing countries, as the “official channel” of the maize marketing system, and were responsible for setting the prices for major cereals (i.e. producer, into-depot, ex-depot, into-mill, ex-mill and consumer or retail). Depending on the country, these agencies usually consisted of one or more ministries related to cereals production and influencing public policies affecting food production and consumption and a parastatal established to operationalise the regulatory provisions of the public policies enacted for a given crop. In many developing countries parastatals remain important players in the grain marketing system even though their role may have changed. In the post-market liberalisation era many, but not all, of these parastatals have either been disbanded or have been assigned a specialised role such as acting as the buyer-of-last-resort or maintaining food security reserves.

The second class of actor in the commodity marketing system is private agents. These include private individuals operating in the system as petty assemblers, traders large-scale merchants, millers (both large corporations and small rural operators), brokers and retailers of grain products. The exact quantity of grain flowing through the private channel is often not known. However, most of the agents in the channel operate in rural areas and penetrate the remotest areas of the rural areas to purchase grains. A common justification for establishing parastatals is, that parastatals get to hinterlands that private operators cannot or will not reach. However, lkpi² claims that it is private marketing agents that more often get to remote hinterlands to buy and collect maize from farmers when the government agencies fail. However, in those developing countries where national structural adjustment programme have not yet been initiated, inter-provincial grain movement controls are so strictly policed that private agents in the system cannot legally and profitably transport grain from one production zone to another. For those countries that are already adjusting their economies structurally, market liberalisation is making or will soon make much restrictions on commodity movement irrational and new form of intermediary are coming into being. Among these are commissioning agents or brokers. These entrepreneurs do not take title to the grain but take responsibility for selling the grain. They act as agents for the grain seller who may be a farmer, a grain trader or grain elevator.

Grain storage

Whether storage takes place on the farm or in silos off the farm, increases in the value of products due to their time utility must be sufficient to compensate for costs at this stage, or else storage will not be profitable. These costs will include heating, lighting, chemical treatments, store management and labour, capital investment in storage and handling equipment, interest charges and opportunity costs relating to the capital tied up in stocks. Among the less tangible costs is the risks attached to storage. These include shrinkage due to pilferage, pests, fungal growths and loss of quality due to ageing. Another risk is that demand could fall with adverse effects on prices.

Since the advent of structural adjustment programmes and market liberalisation, some grain marketing parastatals have lost their monopoly of the market and consequently the volumes of grains which they are handling has dropped substantially. This means that they no longer require all of their storage capacity and a number of marketing parastatals now rent some of their storage capacity to farmers, grain traders and other participants in the grain marketing system.

Two types of storage facility, are commonly found, namely: the bulk storage facility where cereals are stored in concrete and/or metal bins, and the bag storage facility where the crop is stored either inside a warehouse or in the open and then covered by tarpaulin sheets. In comparative terms, the advantage of a bulk over a bag storage system are that it is more efficient because it:

• reduces congestion at the depots by not allowing for bagged maize to be dumped all over the depot yard

• reduces handling costs

• saves foreign exchange on bags, tarpaulin and fumigation, and

• lowers storage losses.

Its disadvantages are that:

• the initial invest is high, with a significant foreign currency component

• it is inflexible in terms of not being easily expandable to cope with changes in intake and off-take levels

• it relies heavily on an efficient transport system because a silo complex is only economically viable when throughout is at least 1.6 times its capacity³, and

• it needs skilled manpower to run and maintain the entire system.

On the other hand, a bag system ideally overcomes the problems associated with a bulk system as enumerated above. Its main disadvantages are:

• higher quality losses in storage due to insect pests and rodents

• higher demand for foreign exchange associated with the purchase of bags

• tarpaulin and fumigation sheets.

The depot manager controls the day-to-day operations of the depot. The duties of the depot manager include accepting, checking the quality, recording the quantity and storing the produce brought in by the farmers. Each depot's record of accepted and stored produce are then sent to headquarters for necessary action. With this information to hand, inter-depot or inter-district transfers can be effected.

Grading of grains

It is important to have a grading system which accurately describes products in a uniform and meaningful manner. Grades and standards contribute to operational and pricing efficiency by providing buyers and sellers with a system of communicating price and product information. By definition, commodities are indistinguishable from one another. However, there are differences between grades and this has to be communicated to the market. By the same measure, buyers require a mechanism to signal which grades they are willing to purchase and at what premium or discount. Prices vary among the grades depending upon the relative supply of and demand for each grade. Since the value of a commodity is directly, affected by its grade, disputes can and do arise. In fact, the government may establish grading services to serve as a disinterested third party.

Grading typically occurs at the assembly stage or when a product moves into storage, during storage, or just before it leaves storage. Grading is not normally a separate marketing stage, although it has been separately identified in table 6.1 in this chapter. It is a function provided by the storage firm or the commodity merchant or the government. Prescribed procedures for grading are set forth by the trade members of commodity markets or else are stated in governments regulations. Grading may be undertaken by a member of the trade specialising in a particular commodity. Several lots of grain, oilseeds, and cotton are combined to produce a grade level required for a particular sale. This gives rise to what are known as house grades. A merchant's primary marketing advantage may be a reputation for house grades of consistent quality.

The absence of grades and standards restricts the development of effective and efficient marketing systems. For example, for some time the government of Nepal have been trying to establish an internal food marketing system. It has no nationally integrated market but due to its topography and poor communication routes there is little inter-state trade. Instead each state has closer trade relations with neighbouring Indian states. There are substantial obstacles to achieving an integrated national market as explained by Chong Yeong Lee⁴;

“The lack of a unified measurement system also hampers the development of marketing. In Tarai, grain is measured by weight (1 mand=37.3kg) and in the Hills and Inner Valleys it is measured by volume (1 pathi = 4.54 litres). The same unit of weight, such as “seer”, is equivalent to 0.93kg of meat in the Tarai area, 0.79kg in Kathmandu and 0.25kg in Pokhara.”

Clearly, the confusion which this situation gives rise to, mitigates against the successful development of a national market. Moreover, effective standardisation is basic to an efficient pricing process. Consumers use the price differentials they are willing to signal to suppliers what they want with regard to produce quantities and qualities. If produce is not in well defined units of quantity and quality then the pricing mechanism fails as a device for communicating consumer wants to suppliers. However, Dixie⁵ warns that any grading standards for domestic markets must originate from the industry itself as and when it becomes apparent that the consumer is willing to pay a higher average price for the sorted product. He points out that,

“Although national standards can probably be justified for export, when compulsory minimum standards are introduced for the home market it will put up prices to the consumer”, and that this would,“…lower consumption and reduce the size of the local market”.

Usually samples of different sizes (depending on the size of the load) are taken from each lot delivered to the depot of the buyer and these are tested for compliance with the acceptance standards. The results determine the grade into which the whole lot from which the sample came is classified to determine the price to be paid to the grower. Typical variables used in grading grain include:

• the moisture content of the grain

• the percentage of broken kernels

• degree of discolouration in the grain

• the percentage of material other than grain (MOG) in a sack or load

Case 6.1 Thailand's Rubber Collection And Grading System
    Thailand is a major player in the world's rubber markets. However, both government and those within the Thai rubber industry were becoming increasingly concerned about the quality of rubber coming from the smallholder sector. The Bank for Agriculture and Agricultural Cooperatives (BAAC) became directly involved addressing this problem.
    Research within the smallholder sector identified several problems. One of the principal causes of the high levels of impurities in the rubber delivered to local buying points was the containers used. Smallholders were using tins, cans, plastic containers, buckets a wide variety of other types of container. These were totally unsuitable since they were usually contaminated by residual traces of previous contents. BAAC therefore sponsored a leasing system for standardised milk churns. These churns were of uniform dimensions and were easy to clean. Standardisation on receptacles for the rubber meant that other operations could be standardised including the weighing and storage equipment used at the local buying point as well as the vehicle used to transport the rubber between the buying point and the factor.
    Local buying points were so situated that no smallholder had to travel more than 2 km to deliver his/her rubber. This was important since many smallholders either walked or cycled to the buying point. Preliminary tests at the buying point gave some indication of the level of impurities in the rubber. These tests included one for specific gravity since some of the more unscrupulous smallholders were known to add battery acid to the rubber to increase the apparent volume. Producers were given a receipt for their rubber which was then transferred to the factory where much more sophisticated tests could be conducted on the quality of the rubber. Smallholders were then informed what premium, if any, their rubber had attracted in accordance with its grade.
    Payment was effected through BAAC branches. The actual payment made to the smallholder was the grade price minus any outstanding loans or loan repayments given by BAAC to cover production expenses.

In Sub-Saharan Africa, for example, maize is received in 4 grades, A to D, with A being the highest grade and D the lowest. The system allows for the farmer to dispute the grade awarded to his crop. In such cases, the farmer has to submit a written request within a specific time to the depot through which his crop was delivered.

Typically, after grading is effected, the farmer is issued with a receipt showing details of the type, quantity and grade of the maize delivered. The receipt constitutes an acknowledgment by the agency that it is indebted to the farmer up to the value of the crop detailed on it. From that point on, the marketing risk attached to the crop passes from the producer to the agency/parastatal. It is relevant to point out that it usually costs the same amount to process a grain receipt for 1 tonne as it does for 1,000 tonnes.

Grain processing

Grain processing is about the most important activity from the final consumer's stand point within the marketing chain of the crop. Grain, for human consumption, is usually milled into flour or meal. Usually two types of maize flour are processed in each country, namely: the refined, white and sifted (powdery) flour produced by industrial roller mills and the unrefined and coloured maize meal produced by hammer-mills. The highly refined grade of meal is generally consumed by urban dwellers, while the hammer-mill grain meal is a low-grade “whole maize meal” favoured by rural consumers and the urban poor.

In many countries, the milling industry is highly concentrated, usually with one major company controlling over eighty percent of the maize mill trade. For example, in Kenya, maize milling is controlled by the Mercat Group of Companies (Unga Ltd, etc) (90 percent): while in Malawi, it is GRAMIL, a subsidiary of ARMARC which processes eighty three percent of the maize in that country. In Tanzania, the National Milling Corporation, (NMC) handled about eighty five percent of all maize milled before it fell into financial difficulties in the early 1990s and was allowed to go out of business; in Zimbabwe it is the National Foods which controls eighty percent of maize milling in the country until progressive liberalisation of the market increased the level of competition during the first five years of the 1990s. Grains can also undergo secondary processing and be converted into more sophisticated products such as baked foods, breakfast cereals, baby foods, cooking oils, starches, sugars etc. A considerable amount of grain is also converted to animal feed. Due to this versatility in end use, the marketing chain for grains tend to be long and complex.

Challenges for grain marketing systems

Depot network and distribution of production problems arise because crop production is rarely evenly distributed across a country. In most countries cereals production is concentrated in one or two regions of the country, and the remainder are cereals deficit areas. In these circumstances it usually becomes rational and necessary for the government agency handling grain distribution, where there is one, to construct intake depots in the producing region(s), and storage depots in the major consumption areas. But in most instances, post-independent governments in some of these countries adopted rural income policies that made it mandatory for the whole country to be provided with government agency depots within short distances of every producer. The aim was to overcome political, social and economic injustices of the past. It was a policy which was also pursued in the hope that smallholder farmers would be attracted into the cash economy. In the end, this huge investment in infrastructure was economically unsustainable and most developing countries are now locating storage facilities on the basis of economic efficiency.

Excess stock problems tend to develop because of relatively high producer prices which the governments of the countries concerned establish in order to compensate farmers whose cost for production are high. Unfortunately, these systematic increases in the producer prices usually bring them to levels that are incompatible with international supply and demand conditions. To reduce the effect of these high producer prices some governments in LDCs introduced artificial exchange rates that later did more harm than good to the export economy of these countries. In addition, local demand was low, being limited to only urban demand, for human consumption, and for livestock feed production in rural areas.

Fluctuating grain supply problem results from the crop's susceptibility to weather conditions which determine the level of harvest and, therefore, the export market supply. With each country's domestic demand often varying along with the weather, LDC countries have been known to rapidly move from a surplus to a deficit situation. In a country with high import parity and low export parity prices, the increased risk of stockpiling seems to lower the real cost of storing the excess stocks and so causes government to become indifferent toward streamlining supply with demand requirements. Low levels of intra-regional trade between developing countries is explained by subsidies paid to producers. This masks any competitive advantage in grain production that growers in one country may have over those in neighbouring countries. Where there is intra-regional trade in grains, between developing countries it is most often based on periodic shortages arising from drought civil strife. As such, export demand is usually short-lived and often financed by donor agencies, and the exporting country cannot make any long term plans to develop the trade.

Livestock and meat marketing

At the outset of this chapter it was observed that in an introductory textbook, such as this one, there were severe constraints on the range of agricultural commodities which could be discussed and that the author had to be highly selective. This is equally true of this section where the reader will find that the discussion is largely confined to livestock and meat. There simply is not the opportunity to extend the discussion, in this textbook, to the wide variety of animal by-products that could be exploited after the meat has been utilised. The figure⁷ below lists the most important categories of by-product and reveals that these account for almost two-thirds of the live weight of an animal. The recovery, processing and effective marketing of these by-products can make a significant difference to the level of returns to producers and, therefore, they are worthy of discussion. Perhaps the only consolation is that the same figure also shows that the meat component of an animal typically accounts for eighty to ninety percent of it's value

Figure 6.2 The economic importance of animal by-products

In this section the livestock under discussion are cattle, pigs, sheep and goats. Poultry is treated separately because the structure of this subsector, the scale of operation and methods of production are distinctly different from larger farm animals.

Producer attempts to adjust livestock production in keeping with demand often result in adverse market effects. The problem for livestock farmers is the inevitable lags, between changes in demand and adjustments to supply. In order to expand meat supplies in response to anticipated increases in demand, livestock producers must channel animals into the breeding herd rather than the market. This pushes up meat prices over the short run. Conversely, when prices fall farmers try to reduce production levels by selling off animals. The sell off increases meat supplies and further reduces prices over the short run. Profits are further squeezed by the increase in costs in the form of additional storage and interest charges. This practice of adjusting future production according to present day prices, results in marked output and price peaks and troughs. Periodically livestock prices drop below production costs and this retards the industry since producers become discouraged.

The links between livestock and grains, with reference to both production and marketing, are close and direct. Kohls and Uhl⁸ observe that:

“Livestock are protein converters, transforming vegetable protein into animal protein. These ‘protein factories’ are a form of food processing. Moreover, livestock feeding can be viewed as an alternative way for the grain farmer to market grain.”

Thus, relative prices between grains for human consumption and that of animal feeds will have a direct bearing upon one another. Moreover, the price of grains converted to feed will influence the costs of meat production and, therefore, the price of meat. These interrelationships are as important to government policy makers as they are to the participants in the livestock and meat marketing systems. In many parts of the developing world governments commonly inflate producer prices for grain, often above those on world markets, in order to encourage production. Consumers may or may not be compensated through food subsidies but unless feed processors are also subsidised the price of meat is likely to increase.

The complexity of livestock marketing systems varies greatly. In the most sophisticated systems their is a high degree of specialisation in the production and marketing of livestock and meat as there is, for example, in the case of beef consumed in Japan (see Figure 6.3).

Figure 6.3 The high degree of specialisation in japanese cattle and beef marketing system

The various operations involved in livestock production and marketing could be performed by one farm and in many countries mixed farming, i.e. grain-livestock, is common place. Alternatively, breeding, fattening, slaughtering and packing can be undertaken by specialised farms and other forms of agribusiness. Specialisation in production and marketing, helps in achieving economies of scale, increases the return-on-investment and allows the enterprise to become highly experienced in a narrow range of activities. This should mean that the consumer is supplied with high quality products at affordable prices. It also means that because a producer is only involved in a narrow. At the same time, specialised livestock and meat marketing systems are characterised by longer channels and a high degree of complexity. Thus, there has to be good communications and a steady flow of relevant information between market participants if they are to operate effectively as a system. In countries where the communications infrastructure is poor or marketing information systems have not been put in place it would be difficult for the system to become highly specialised.

In contrast to the highly specialised and complex livestock and meat marketing systems to be found in countries like Japan, there are much simpler, shorter and less sophisticated channels such as that of Indonesia's marketing system for small ruminants¹⁰.

Figure 6.4 Indonesia's marketing system for small ruminants

The Indonesian livestock and meat marketing systems is simpler because some of the production and marketing functions are combined and carried out by fewer enterprises and some are not carried out at all. For instance, there is no formal animal feed sector at the production end and the slaughtering, cutting and boning is often done by the consumer. Put another way, the production and marketing system is shorter, and simpler, because it offers fewer services to both producers and consumers. As disposable incomes increase, in developing countries, meat consumption tends to increase too and the demand for additional services gains in strength. According to Knipscheer et al., ¹¹ this is precisely the pattern which is emerging in Indonesia.

One major difference between the Japanese and Indonesian livestock systems is that in the case of Indonesia, there is no nationally integrated livestock and meat marketing system. The system just described pertains specifically to the East Java region. However, Knipscheer et al., have identified a trend towards a nationally integrated livestock marketing system in Indonesia. Knipscheer et al., state that where there is a strong correlation between marketing margins and distances from the primary area of supply then this represents compelling evidence of a high degree of market integration.

Assembly of livestock and meat

Depending upon complexity of the particular marketing system cattleare assembled to serve one of the following purposes; for slaughter, for fattening or for breeding herds. There are various types of livestock assemblers and assembling institutions.

The grading of livestock and carcasses

At the primal level, there are three dimensions to grading. The first, relates to the differing values attached to cuts of meat and the second to the quality of those cuts. The third dimension is that of carcass yield. The first of these classes of criteria is, in some measure, objective. Depending upon the country and the culture, different parts of the animal are more favoured than others, or are in shorter supply, and therefore attract higher prices. The measures of meat quality, and even yield, are rather more subjective.

Case 6.2 Botswana's Meat Commission Makes The Grade
    Many articles, reports and studies have been written on the Botswana Meat Commission (BMC). The consistent message has been a model, for the developing world, of how to establish and maintain standards of excellence within the beef industry. Beginning in 1958 as a single slaughterhouse, BMC has developed into an international business with a turnover in excess of US$100 million per annum. Most of BMC's reinvestment in its business comes from its own resources, the Commission pays premium prices to local producers and is a major contributor to the national treasury.
    The success of BMC is based upon the establishment of an efficient internal marketing system, maximum utilisation of the animals, strict and independent grading standards that meet international specifications and investment policies which ensure that a significant proportion of earnings are channeled back into the business.
    Botswana is a semi-arid country. whose population is concentrated in the eastern region. Half of the country's 600,000 square km is tribal land, only 4% is freehold and the remainder is state-owned; being mainly dry and having little livestock. Tradition has mitigated against the fencing but the government has been bold enough to tackle this sensitive issue because it sees that fencing is necessary to control the movement of diseased stock. Outbreaks of foot and mouth disease, which have occurred from time-to-time, have largely been kept under control by BMC's stringent animal health controls. Such outbreaks draw a halt to exports and only 20% of Bostwana's beef is consumed within the country
    BMC is able to maintain a steady flow of cattle through its abattoir through a quota system. Producers have to apply for a quota and are heavily penalised if they fail to meet their agreed quota. Enterprising agents have emerged to provide services to producers including the obtaining of quotas and arranging rail transportation. These agents have been instrumental in organising farmers with only one or two animals to sell, into groups so that shipments achieve minimum economies of scale. Co-operatives are also active in supplying cattle to BMC.
    BMC buys livestock according to deadweight and grade. Independent grading is carried out by employees of the veterinary services. Animal movements are strictly controlled. BMC helps farmers plan ahead by publishing prices for each 4 week period. To maintain a steady flow of beasts through the abattoir in the low season, BMC offers high prices from October through February.
    Commodity markets tend to be highly elastic and the international beef market is no exception. Moreover, it is a highly competitive market. BMC's policy is to perform as much processing in the country as possible and to process as much of the animal as possible. Live exports were stopped in 1967. Therefore, Botswana exports a full, range of by-products including tallow, bonemeal, bloodmeal, hides, hoofs, horns etc. Both fresh and frozen meat are also exported along with meat products like corned beef.⁹

With respect to the second dimension of meat value i.e. the quality of the meat the European Union's carcass classification system illustrates the point. This system gives particular importance to the shape of the carcass, known as conformation-, and the amount of fat in the carcass. Conformation influences the meat yielded by a carcass and the trend in Europe is towards reducing the amount of fat in human diets and so the classification systems for meats rate low fat carcasses higher than those with greater amounts of fat. The European system recognizes seven categories of fatness (categories 4 and 5 being subdivided into higher and lower), and eight categories of conformation. The leanest carcasses would be in category 1 and the best conformation class is E.

Figure 6.5 Beef carcass classification in the European Union

The idea of the EEC's carcass classification system is that it enables the marketplace to send clear signals to producers with respect to the type of carcasses the market wants. Figure 6.6 shows how conformation and fatness combine to influence the amount of salable meat in a carcass, in percentage terms. The data was compiled by the UK's Meat and Livestock Commission (MLC) using standard methods of butchering and trimming. For simplicity, data is given here for only conformation class R and fat class 4L.

Figure 6.6 The EU's carcass classification system: conformation, fatness and percentage yield of salable meat

The MLC have also provided illustrative data to show the price differentials, expressed as percentages, that are paid to producers supplying various grades of carcass.

Figure 6.7 The EU's carcass classification system: conformation, fatness and percentage price differentials

The figures show that in these markets, fatness has a greater influence on price than conformation. Nevertheless, livestock and meat grades and their usage by the trade are often cited as a major problem for developing countries who find it difficult to meet the specifications. However, as will be seen in case 6.2, Botswana Meat Commission (BMC) has managed to do so and profits greatly as a result.

Meat packers purchase most of their livestock on a live weight basis. This requires buyers to estimate the carcass yield and quality of live animals in order to arrive at an offer price. Buying is an art rather than a science, and there can be significant variations in buyer and seller estimates of the value of a particular animal. This is a frequent source of conflict in the livestock marketing channel. Moreover, the fact that reliable judgments of livestock can only be acquired over a period of years, can act as a barrier to competition since the inexperienced are effectively barred from entry to the distribution channel.

For some products, grades are established in the processing plants. This is the case with meats such as fresh poultry, beef, and pork. The government installs graders in the cattle auction floors on a fixed-fee basis; the fees collected cover the salaries and other costs incurred by the government in making the service available.

Livestock and meat processing

In contrast with all other sectors of the food industry, the meat packing industry is a process of disassembling. Whilst other food manufacturers combine simple raw materials into a complex, composite product, meat packers breakdown a complex raw product-livestock-into its constituent parts. This reverse manufacturing process nevertheless adds form utility to livestock products. An animal carcass is in reality a bundle of products, each with different markets, demands and values. On average somewhere between fifty five to sixty two percent of a beef animal's live weight is recovered as meat products. For a pig's carcass the figures are seventy to seventy five percent. The carcass yields other by-products of course such as hides, pelts, lard, offal, fertilisers and industrial products.

In some tropical countries slaughtering facilities are closely supervised by government appointed inspectors. This is not so much a system of quality control as a measure to ensure that only disease-free animals are introduced into the human food system.

Livestock and meat consumption

Meats are a versatile food representing a variety of consumer attributes. Meats can be purchased ready to eat, ready to cook or in forms requiring substantial preparation. Most meat is sold fresh, in LDC's, but increasingly such processed items as canned meats are becoming available and these are giving the consumer additional choice. Food processors can combine meats with other foods to add further to consumer choice.

The income elasticity of demand for beef in particular, and other meats in general, tends to be strongly positive in LDCs. As per capita incomes rise in developing countries, the demand for the principal livestock products meat, milk and eggs also rises. Abbott¹² quotes the example of Iran when the population was growing at just under three percent and disposable incomes at five percent. In the same period meat demand rose at around nine percent per annum.

Over the past 30 years livestock populations have grown substantially in LDCs as both disposable incomes and the populations themselves have grown. Indeed, the developing countries have larger numbers of livestock than the developed countries but they produced only one-fifth of the world's meat, milk and eggs. Moreover, a smaller proportion of stock are slaughtered each year and yields per animal are generally much smaller in the developing world. In addition to rising incomes, the rate of urbanisation is a fundamental influence upon the demand for livestock food products. An example, again supplied by Abbott, is that of Dar Es Salaam where urban expansion of eight percent doubled meat demand within nine years.

However there are constraints to the development of livestock industries in developing countries in the form of traditional techniques of food preparation and shopping behaviour. In many cultures it is customary to cook meat for a very long time, especially if the favoured dishes are curries and stews and in these circumstances little interest is shown in paying premium prices for more expensive cuts of meat. Therefore in many Asian and African countries butchers have no incentive to add value to the product by dividing the carcass into various consumer cuts. Moreover, the wealthier members of LDC societies often leave the shopping to servants and basic retailing techniques continue to be acceptable. In the tropics the preference is for freshly killed meat.

Religious factors may also have some bearing on purchasing behaviour. Muslim countries importing from non-Muslim countries frequently prefer to receive supplies on-the-hoof to ensure that Halal methods are employed in the slaughtering methods. Demand for meat tends to be highly seasonal in tropical countries. It is greatly affected by religious festivals like Ramadan, the feast of the ld (Moslem festival) and by the sale of cash crops in places like Ethiopia and Nigeria where demand rises significantly following the coffee and groundnutt harvests.

Case 6.3 Developing Zimbabwe's Small Scale Poultry Sector
    Zimbabwe's poultry industry is typical of that of many developing countries with two distinct strata: the commercial sector, employing modern and sophisticated husbandry, and the small scale sector which produces eggs and meat from bought-in day-old chicks for the family and local market. In 1985 the industry's value was Z$45 million, split 70:30 in favour of the commercial sector over the much smaller but rapidly expanding small scale sector. Some 80 commercial broiler producers were in business in the mid-80's, but two of these produced over 70% of total production. Four of the largest broiler producing companies are vertically integrated i.e. breeding, compounding their own feed, fattening the birds and marketing them. The trend in the commercial broiler industry is towards production becoming increasingly concentrated and the technology increasingly sophisticated. Commercial egg production in Zimbabwe is also concentrated there are only around 140 producers, supplying just over 11 million dozen eggs per annum.
    Most rural farmers produce poultry primarily to feed their own families, with small, and irregular, surpluses being made available on the local village markets. Local markets tends to be limited and easily saturated and the internal market inefficient and incapable of providing reliable outlets for poultry products. Because of the costs involved in production and marketing very few farmers are willing to produce poultry without the security of a contract with a processing firm.
    From independence in 1980 onwards, the situation in the rural areas began to change with increased availability of credit and extension services to the small scale sector. There are signs that these measures are having an impact on the poultry sector. There has, been a 300% increase in the number of day-old chicks purchased by the smallholder sector over a 12 year period. The large increase in communal broiler production is confirmed by the stockfeed industry whose sales to this sector have increased remarkably since 1980. Nonetheless, a good deal remains to be done. Eggs still tend to be sold locally and average egg production per hybrid bird is only 175 eggs per year. This is poor by commercial standards where 300 eggs per bird are achieved. This is because smallholders are still, in the main, using rudimentary husbandry and production methods and technologies. That is, the majority of the smallholder sector is still at stage 1 of Sugiyama's 5 stage model and a small number have progressed to stage 2. It would appear that much of the credit made available through government programmes has been spent either on day-old chicks or on consummables such as imported feedstuffs, vetinery products etc. There has been no significant improvement in the level of investment in capital equipment by communal farmers. Moreover, the small scale sector continues to comprise a large number of small production units of 50-100 birds.

Poultry and eggs marketing

Poultry farmers have three distinct types of bird from which to select their flocks:

Sugiyama¹³ suggests that poultry enterprises pass through distinct stages of development. These are outlined in the following figure.

Table 6.2 Development stages of poultry enterprises

Within the developing world, poultry and egg businesses may be found at all five stages of development, although numerically there are likely to be more at the first and second stages. Among peasant farmers' poultry are allowed to find their own food and water and roost where they can in the family compound. Under these conditions, it is not surprising that productivity is low and mortality rates among the birds is high. Commercial broiler and layer enterprises need to have a much higher level of technology and management. However, they too have their problems. In developing countries, commercial producers are reliant, to varying extents, upon expensive imports of breeding stock, i.e. hatching eggs and/or day-old chicks, animal health products and vitamin and mineral additives for compound feeds.

Assembly of poultry and eggs

It is the case, in most developing countries, that the poultry and egg sector is highly fragmented. Production is, for the most part, carried out by a large number of farmers, each with a very small flock. A minority of farmers have sizeable flocks. Much of the production is sold on markets in the immediate vicinity of the farm.

Egg grading

The principal external features of an egg, which collectively determine its quality are shell texture, colour, shape and condition. In some countries standards have been established for each of these external physical features for an egg. The internal condition of the egg is also of interest when assigning a grade to eggs. These include the position of the yolk within the shell and its colour; the extent of blood spots, if any, and the translucence and firmness of the albumen (white). Egg shells are porous and so another internal feature, which is critical to the quality of the egg, is the size of the air cell inside the shell. Eggs which are stored or transported in high temperatures allow a great deal of moisture to escape. This results in an enlarged air cell and consequent loss of weight. Stewart and Abbott¹⁴ report that, in the Sudan, for example, the extremely high summer temperatures can spoil up to forty percent of the eggs before they can be consumed. In other cases, the problem is not one of a total crop loss but of quality losses that may not become apparent until the egg is used by the consumer.

The internal condition of an egg can be established using destructive or non-destructive tests. The most accurate interior test is to break the egg open on to a glass so that the contents can be inspected. This of course would be done on a sampling basis. Alternatively the non-destructive test of canding can be applied. This simply involves holding the egg before a strong lamp so that the position of the yolk, size of the air cell etc can be seen. By spinning the egg, in the hand, the solidity of the albumen can also be observed. Stewart and Abbott illustrate the kind of quality specifications which might be established as follows:

This suggested grading scheme underlines the fact that the assessment of egg quality is comprised of both objective and subjective measures. Nonetheless, like all grading schemes, for whatever agricultural commodity, the benefits of implementing a systematic and widely understood method of describing the essential attributes, of the product, would be that sales can take place without personal inspection, disputes are more easily settled and more precise price and supply information can be made available.

Poultry grading

The weight of a poultry carcass is a primary attribute when grading the bird. The weight of the carcass will vary by breed, sex and age. It will also vary in accordance with the feeding regime of the bird. The eating quality of poultry meat is of particular concern to consumers. Meat tenderness, juiciness and flavour are the key criteria of quality in which consumers have an interest. Skin colour is another determinant of quality but the preference for white or yellow carcasses varies around the world.

The quality of poultry meat is greatly affected by methods of production. The nature of the feed used has a major influence on the final product. Balanced rations high protein and energy sources such as whole grains and fats, growth promoters such as antibiotics, chemical additives and vitamin supplements. Overcrowding and a lack of veterinary care slows the rate of growth of the birds and increases the incidence of disease and infestation by parasites which, in turn, adversely affect the quality of dressed poultry. In the tropics, climatic conditions make it unsafe to keep poultry carcasses, for more than a few hours after slaughter. For this reason, as well as traditions and culture, consumers generally prefer to buy live or freshly slaughtered birds.

In the industrialised countries detailed standards and grades for dressed birds (i.e. feathers and blood removed) have been established. These grading systems take account of conformation of the carcass, the presence of pinfeathers, skin condition, integrity of bones, and carcass colour/discolouration. However, in most developing countries grading is more informal, less systematic and more subjective. Possibly the two most important ‘quality’ criteria, in the tropics, are age and sex. Younger birds, although lighter, generally enjoy a price premium over older poultry. In the same way, female birds are more highly valued than male birds of the same age. These criteria apart, market intermediaries usually catch a sample of the birds on offer and feel the breast flesh through the feathers and make a professional judgement as to the consumer appeal of the bird.

Opportunities to apply uniform quality standards depend upon the widespread availability of refrigeration. Live birds are difficult to classify save in the most general of ways; age range, sex, type and subjective evaluation through the handling of the bird. Poultry carcasses are much easier to classify with accuracy. Hence the statement that a prelude to the implementation of uniform grading standards is the sale of carcasses becoming commonplace and this can only happen when refrigeration is equally commonplace. Another barrier to the adoption of standardised grading procedures is the size of the poultry enterprise. The great majority of poultry farmers, in developing countries, are small-scale businesses and therefore unlikely to spare the time, or have a suitable staff member capable of learning how to assess poultry quality in a consistent and systematic fashion. Thus the diffusion of standardised grading also depends upon the structure of the industry within a given locality. In geographical areas where producers are predominantly small-scale, it is unlikely that there will be sufficient impetus to develop grading standards.

Poultry and eggs consumption

In the industrialised world poultry, and to a slightly lesser extent eggs, are less of a commodity than they were at one time. Originally these products exhibited a high degree of homogeneity but producers have since differentiated both of them. By manipulating the feed given to poultry. producers have been able to alter the taste characteristics and the appearance of the birds. Poultry has also been differentiated by the way they are preserved, by offering different cuts of the birds, by pre-cooking, coating in bread and in a variety of herbs. With product differentiation producers and food manufacturers have taken the opportunity to brand their poultry and poultry products. The differentiation of eggs has chiefly centred on boxing the eggs and branding them. Some producers, and more particularly food companies, operating in developing countries, have followed suit and have differentiated their poultry products. Eggs, however, continue to be marketed as an undifferentiated commodity.

The marketing of fresh milk

Whilst milk can be converted to a range of dairy products, such as cheese, butter, yogurt, dried powders etc., these are not commodities. It is generally the case that the processing of milk into these products involves a measure of product differentiation. That is, the methods, techniques and technologies, used in manufacturing dairy produce, tend to impart unique characteristics to the finished product. For this reason only milk will be discussed in this chapter.

Milk is an extremely important human food. Not only is it a relatively cheap source of protein, it is also rich in minerals such as calcium and vitamins A, D and B2. The quality of milk is usually judged according to its butterfat content. In addition, buyers are also concerned that it should be free from diseases like tuberculosis.

The relationship between beef and dairy production is an important one. In many countries, beef production is subsidiary to dairy production with sometimes as much as sixty to seventy percent of cattle sold for beef being animals culled from the dairy herd. This can have a significant influence on the characteristics and quality of red meat products since breeds and production methods which give the best milk yields rarely give corresponding results in terms of beef production; or vice versa. In Europe, for example, Friesian cows are a popular breed for milk production. It has been discovered that by crossing the Friesian with the Canadian Holstein, milk yields can be increased substantially. However, this cross-breed gives relatively low meat yields and a meat of inferior palatability. The relationship between the beef and dairy sectors is reversed in some countries. For instance, in Kenya milk production is more a by-product of livestock rearing. Whether it is dairy production which influences beef production, or the reverse, the important point is that the products of one will be determined, to some extent, both in form and quality, by what happens in the other sector; product development and technological change in one will have implications for the other.

In all parts of the world milk production is seasonal but the peaks and troughs are higher in the tropics. Production in the tropics peaks just after the rains when there is lush pasture available and progressively declines the further into the dry season. As in the case of beef production, milk producers have to take into account the lengthy biological lags when trying to match the supply and to the demand for liquid milk. When there is an over-supply of milk then it might be possible to channel some of the excess into making butter, cheese, yogurts and other processed dairy produce. However, the market for these products is finite too and although dairy products can be stored longer higher levels of capital are tied up and interest charges are higher for storing these value added products, in comparison to milk.

Assembly of fresh milk

In the case of fresh milk, the assembly level resembles that of poultry. Milk goes directly from dairy farms to the processing plant. Bulk tanker trucks, visit farms on a regular schedule and collect the milk. It is then moved to a processing plant. Hauling may be done either by the dairy company's own vehicles or by independent truckers under contract to the processor or the dairy farmer.

The collection of milk is most often undertaken either by a marketing board or a cooperative. In the case of marketing boards many of these are now being turned from loss making parastatals into commercial enterprises under economic structural adjustment programmes (ESAP). In the foreseeable future some of these boards will be privatised either in whole or in part.

The transportation of fresh milk

Whilst the tankers which carry the chilled milk from the farm to the factory are becoming ever larger the major remain constraint remains that of the inadequate road infrastructure. During the wet season many roads become impassable and the milk simply is not collected.

Whereas the trucks used to transport other agricultural commodities can be used to move a variety of different types of product, milk tankers cannot. This affects the economics of milk transportation. A haulier moving grain in one direction can often get a return load since the type of truck used can carry any kind of aggregate; be it an agricultural commodity or some other load such as backfill for road building. Milk tankers, by contrast, travel empty in one direction and full on the return journey.

Fresh milk grading

Fluid milk is usually separated into at least two grades. For the purposes of this discussion these will be referred to as grades A and B. Grade A would be passed as fit for human consumption. Grade B would be passed only for use in processed dairy products. Grade B milk is processed at much higher temperatures than fluid milk passes through when being pasteurised and this is why it can be approved for human consumption, albeit if only in the form of processed dairy products.

In general fluid milk attracts higher prices than milk destined for use in processed products. In part, this is explained by the need to compensate market participants for the additional costs of marketing a highly perishable product and moving and storing a very bulky commodity. The second explanatory factor is the fact that fluid milk has a lower elasticity of demand than do processed products¹⁵.

Kiranga¹⁶ outlines the tests carried out by Kenya Cooperative Creameries on raw and processed liquid milk. These are fairly standard throughout the world:

Raw milk obtained from farmers

Processed milk at the factory

In many developing countries, milk processing has been monopolised by a marketing board or other state marketing agency. Even where markets are liberalised the structure of the milk industry has more often been oligopolistic rather than perfectly competitive.

Fresh milk consumption

In rural areas many households either own a cow to provide milk for their own households, and perhaps to make some informal sales to neighbours, or they will purchase milk from a local farmer. If their are localised cooling facilities, and health and hygiene laws permit, untreated milk will be made available in local stores. In Zimbabwe, the Dairiboard, helped establish cooling facilities in remote rural areas. In doing so, Dairiboard helped ensure that rural farmers could sell their milk locally and guaranteed rural consumers a supply of milk. The move also helped Dairiboard reduce its costs since it was previously charged with delivering milk to these remote territories. This involved high transport costs and low volumes.

In addition to these rural exchanges, four channels for distributing fresh milk can be identified, as follows:

In Middle Eastern and African countries, fermented milk rather than fresh milk has been the traditional food. This may be consumed as a drink or as a relish with cereal porridge. Even in this form, the main criteria of ‘quality’ has been the butterfat content.

Summary

Agricultural products whose production methods, postharvest treatments and/or primary processing have not imparted any distinguishing characteristics or attributes. Within a particular grade, and with respect to a given variety, commodities coming from different suppliers, and even different countries or continents, are ready substitutes for one another. This chapter describes commodity marketing processes. Five categories of commodity are discussed: grains, livestock and meat, poultry and eggs and fresh milk.

A commodity marketing system encompasses all the participants in the production, processing and marketing of an undifferentiated or unbranded farm product, including farm input suppliers, farmers, storage operators, processors, wholesalers and retailers involved in the flow of the commodity from initial inputs to the final consumer. The commodity marketing system also includes all the institutions and arrangements that effect and coordinate the successive stages of a commodity flow such as the government and its parastatals, trade associations, cooperatives, financial partners, transport groups and educational organizations related to the commodity. The commodity system framework includes the major linkages that hold the system together such as transportation, contractual coordination, vertical integration, joint ventures, tripartite marketing arrangements, and financial arrangements. The systems approach emphasises the interdependence and inter relatedness of all aspects of agribusiness, namely : from farm input supply to the growing, assembling, storage, processing, distribution and ultimate consumption of the product. The stages of commodity marketing are: assembly, transportation, storage, grading and classification, processing, packaging and distribution and retailing.

The principal participants in grain marketing are producers, marketing boards, grain elevators, brokers, millers, livestock farmers, animal feed processors, millers, other food manufacturers, grain exchanges and exporters. A common feature of grain marketing systems is the co-existence of government marketing agencies and a parallel private marketing channel. In the post-market liberalisation era many of these parastatals have either been disbanded or have been assigned a specialised role such as acting as the buyer-of-last-resort or maintaining food security reserves.

Whether storage takes place on the farm or in silos off the farm, increases in the value of products due to their time utility must be sufficient to compensate for costs at this stage, or else storage will not be profitable. Under market liberalisation, some grain marketing parastatals have suffered substantial falls in the volumes of grains which they are handling and a number of marketing parastatals now rent some of their storage capacity to farmers, grain traders and other participants in the grain marketing system. Two types of storage facility, are commonly found: the bulk storage facility where cereals are stored in concrete and/or metal bins, and the bag storage facility where the crop is stored under tarpaulin sheets. Grading usually takes place in the grain store. Grades and standards contribute to operational and pricing efficiency by providing buyers and sellers with a system of communicating price and product information. However, grading standards for domestic markets must originate from the industry itself as and when it becomes apparent that the consumer is willing to pay a higher average price for the sorted product.

Amongst the major challenges to grain marketing systems in developing countries are: rationalisation of storage facilities in terms of their location, readjustment of farmer prices to accurately reflect production and marketing costs,

Attempts by livestock farmers to adjust production to the prevailing demand are often frustrated by the lags, between changes in demand and adjustments to supply. Meat prices increase as producers withdraw animals in the short term to build up supplies in the long term. Conversely, when prices fall and farmers selling off animals to reduce production levels the act of doing so further depresses prices.

Grains for human consumption and those for animal feeds have a direct bearing upon one another. Moreover, the price of grains converted to feed will influence the costs of meat production and, therefore, the price of meat. These interrelationships are as important to government policy makers as they are to the participants in the livestock and meat marketing systems.

The major players in livestock marketing are rural traders, local cooperatives, order buyers, commissioning agents, auctions, terminal public markets and meat packers. The systems of grading beef cattle and carcasses vary by culture but may include carcass shape, fat content and meat yield. The assessment of these and other criteria is usually subjective.

The income elasticity of demand for beef in particular, and other meats in general, tends to be strongly positive in LDCs. As per capita incomes rise in developing countries, the demand for the principal livestock products meat, milk and eggs also rises. However the development of livestock industries in developing countries is sometimes constrained by the form of traditional techniques of food preparation and shopping behaviour. In many cultures it is customary to cook meat for a very long time, especially if the favoured dishes are curries and stews and in these circumstances little interest is shown in paying premium prices for more expensive cuts of meat and butchers have no incentive to add value to the product by dividing the carcass into various consumer cuts.

The poultry and egg sector is highly fragmented in most developing countries. The principal external features of an egg, which collectively determine its quality are shell texture, colour, shape and condition. The internal condition of an egg can be established using the non-destructive tests of candling. Of particular importance are the position of the yolk within the shell, yolk colour; the extent of blood spots and the translucence and firmness of the albumen and the size of the air cell inside the shell.

The weight of a poultry carcass is a primary attribute when grading the bird. The weight will vary by breed, sex, age and in accordance with the feeding regime of the bird. The eating quality of poultry meat is expressed in terms of meat tenderness, juiciness flavour and skin colour. Poultry is less of a commodity than it was at one time.

There is a close relationship between beef and milk production. In many countries, beef production is subsidiary to dairy production with sometimes over two-thirds of cattle sold for beef being animals culled from the dairy herd. The breeds and production methods which give the best milk yields rarely give corresponding results in terms of beef production; or vice versa. Milk production is seasonal with peaks just after the rains when there is lush pasture available and a progressive declines the further into the dry season. Assembly is simple and direct with milk going direct from diary farms to the processing plant. Milk collection is usually undertaken by either a marketing board or a cooperative. In general fluid milk attracts higher prices than milk destined for use in processed products. This is due to the additional costs of marketing a highly perishable product and moving and storing a very bulky commodity. The second explanatory factor is the fact that fluid milk has a lower elasticity of demand than do processed products.

Key Terms

Review Questions

From your knowledge of the content of this chapter, briefly answer the questions below.

1. According to Knipscheer et al., what evidence existed to suggested that there was a trend towards integrated markets for small ruminants in Indonesia?

2. What are the principal advantages and disadvantages of bulk over bag storage of grains?

3. Explain the role of an order buyer.

4. What are the main determinants of the tenderness, juiciness and flavour of poultry.

5. What does a Resazurin test measure?

6. Name as many of the 8 stages of commodity marketing as you can and in their sequential order, as presented in textbook.

7. What are the particular problems that livestock farmers face when attempting to adjust the supply of their products to the prevailing levels of demand?

8. Name the criteria used in classifying or grading beef carcasses within the European Union.

9. Explain the term ‘candling’.

10. Why does fluid milk attract higher prices than that destined to be used to make cheese, yogurt and butter etc.

11. How is the quality of milk assessed?

12. What is meant by the statement, “The income elasticity of demand for beef in particular, and other meats in general, tends to be strongly positive in LDCs”?

Chapter References

1. Asian Productivity Organization, (1990), Marketing Systems For Farm Products In Asia And The Pacific, Asian Productivity Organization, Tokyo, p.2.

2. Ikpi, A. (1990), Components Of A Maize Marketing System In Eastern And Southern Africa: A Teaching Module. Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa, Harare, p. 9.

3. Jiriyengwa, S.J. op. cit.

4. Lee, C.Y. (1974), “Marketing Systems In Nepal”, In: Marketing Systems For Developing Countries, INCOMAS Proceedings, Izraeli, Izraeli and Dafna.

5. Dixie, G. (1989), Horticultural Marketing, Food and Agricultural Organization of the United Nations, Rome, p. 111.

6. Jiriyengwa, S.J. (1993), “Maize Marketing In Zimbabwe”, Proceedings of the Regional Workshop on Maize Marketing. Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa., Harare, pp. 92–107.

7. Scaria, K.J. (1989), Economic Of Animal By-products Utilization, FAO Agricultural Services Bulletin 77, Rome, pp. 3–5.

8. Kohls, R.L. and Uhl, J.N. (1990), Marketing Of Agricultural Products, 6th edition, Macmillan Publishing Company, New York, p.385.

9. Abbott, J.C. (1987) Agricultural Marketing Enterprises For The Developing World, Cambridge University Press, pp. 157–165.

10. Soedjana, T.D. Knipscheer, H.C. and Sugianto, (1984), “The Marketing Of Small Ruminants In East Java,” In: Sheep and Goats In Indonesia, pp. 179–183.

11. Knipscheer, H.C., Sabrani, M., Soedjana, T.D. and De Boer, A.J. (1987) The Small Ruminant Market System in Indonesia: A Review, Agricultural Systems, pp. 87–103.

12. Abbott, J.C. (1984), Marketing Improvement In The Developing World, Food and Agriculture Organization of the United Nations, Rome.

13. Sugiyama, M. (1990), “Innovative Approaches To Agricultural Marketing: Selected Cases”. In: Marketing Systems For Farm Products In Asia And The Pacific, Asian Productivity Organization, Tokyo, pp.62–96.

14. Stewart, G.F., and Abbott, J.C. (1961), Marketing Eggs And Poultry, Food and Agriculture Organization of the United Nations, Rome, p. 17.

15. Kohls, R.L. and Uhl, J.N. op. cit. p.412.

16. Kiranga, F.L. (1994), “Marketing Of Dairy Products In Kenya”, In: Proceedings of the Regional Workshop on Livestock And Products Marketing. Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa, Harare, pp. 198–199.

17. Kiranga, F.L., op. cit. pp. 195–196.