why do every region produces distinct commodities? answer in one sentence
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Answer:
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.