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Suggested Topic Activities

1.a)Students to work in groups of 10 and give local examples of agricultural goods where the following marketing activities are carried out.

  • buying and assembling.
  • processing.
  • storage.
  • grading.
  • packing.

b).the student can visit an industry or a local farm where these activities are carried out.

2.Discuss any agricultural goods that you know and how their change in demand is influenced by

  • Price of related goods.
  • Change in taste.
  • Change in income.
  • Beliefs and customs.

3. The following is a demand schedule for rice in Mombasa. Amount bought in (kg) 2200..2400..2600 2800...3200 ..4000 ..4200 Price(per kg) KShs ..... 60....50....45 ....40... .35 ... 30 .....25 Using a suitable scale and axis, plot the demand curve for the above schedule. 4. Give examples of agricultural goods and services whose supply is influenced by
a. Price of related goods.
b. Price exceptions.
c. Weather.
d. Number of sellers.

Background information


In form one you learnt about marketing records. in this topic you will study the marketing processes of agricultural product.



Belief � A person religious conviction or firm opinion.
Co-operative � is an organisation of people who pool their resources together with a common aim of mutual economic benefit.
Custom � A particular or specific established way of behaving.
Demand � Ability to purchase a product at a given time and price.
Equilibrium price -is the price at which quantity demanded and quantity supplied are equal.
Grading � organizing into uniform lots of certain qualities
K.T.D.A � Kenya Tea Development Authority
Market � an institution for exchange of goods and services
Marketing � any economical activities which involves the presentation and distribution of produce to consumers.
Packaging � Putting products in containers convenient for handling.
Perishability � Condition where Agriculture products rot and lose their quality.
Price � is the amount of amount of money paid for a good or service.
Seasonality � refers to a condition of abundance experienced during harvest time.
Supply � This is the quantity of goods and services which sellers are willing to sell at a specific price in a given market and time.




By the end of this topic, you should be able to;

  • define market and marketing,
  • describe the various types of markets,
  • describe how the law of supply and demand affects the price of agricultural goods,
  • state various marketing functions, agents and institutions,
  • iIdentify problems in marketing agricultural products,
  • list various agricultural organizations,
  • Describe the role of each agricultural organization.

Agricultural Economics V(Agricultural Marketing and Organisation)

Click the play button to see the video on open air market.

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Market and marketing:

A market is an institution for the exchange of goods and services or a place where buyers and sellers carry out business transactions.


A market is a place for exchange of goods and services.

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These are activities involved in the flow of goods and services from raw agricultural products to consumption.

Types of markets:

There are two types of market;Perfect market and imperfect market,A perfect marketis where a buyer can buy from any seller the seller can sell to any buyer.

Imperfect market: In this type of market the buyers sellers or both are not aware of the prices offered by each other.

Marketing functions.

These are activities which are involved in the marketing process. They include.

  • Buying and assembling.
  • Transporting and distributing.
  • Packing.
  • Sorting and grading
  • Storage
  • Processing.

Problems of marketing agricultural products.

The problems of marketing agricultural produce, include; Seasonality: Agricultural products are only abundant during the harvesting time.


Most agricultural products lose their quality very quickly they must be sold immediately.

Poor Storage:

Lack of storage facilities and poor storage methods have lead to loss of agricultural produce.


Poor road infrastructures have lead to poor and delayed transpotation.


Most agricultural produce occupy a large space, are heavy and have low value per unit weight.

Poor market information:

Due to poor dissemination of market information, some farmers do not have appropriate market and market prices for their produce.

Solutions to marketing problems.

Perishability can be solved through canning or drying of the product. Seasonality can be solved by producing off season agricultural produce.

Storage can solved by constructing modern storage facilities such as bins and silos.

Bulkiness problem can be solved by construction of factories closer to the farms or plantations.

Poor transport systems can be solved by costruction of better roads net work and all season road.

Lack of market information can be solved by getting information from mobile phones, radio and TV and adverts.

Price theory.

Relationship between supply and demand.

Price is the amount of money paid in exchange for good or service. It is determined by market forces [supply and demand]. Determination of market price. In a liberalized market, price of agricultural goods are determined by the demand and supply forces. When the quantity of goods supplied is equal to the goods demanded this is known as equilibrium or market price.


Demand is the amount of product or service that consumers are willing and can afford to purchase at a particular price in a specific period of time .

Law of demand.

The law of demand states that the quantity of goods and services demanded varies inversely with the price.The higher the price the less the quantity demanded and vice varsa.

Factors influencing demand

Factors influencing demand of a commodity are,

  • Population
  • Preference and taste.
  • Price of related goods.
  • Beliefs ,customs and taboos.
  • Price expectations.


The law of supply states that the quantity of goods and services sold is directly proportional to price.Therefore the higher the price the higher the supply.

Factors influencing supply.

These factors are;

  • Price of related goods (substitutes) :when the price of cabbages in the market is high famers will tend to supply more of cabbages than kales. when price is expected to rise famers tend withhold goods expecting to make more money.
  • Tehnology increases productivity hence the supply.
  • Government policy: cess/tax reduce supply of commodities on the market.
  • Number of sellers. many sellers of the same commodity increases the supply of that commodity on the market

Associations and unions:

These are organizations that promote and popularize agriculture among famers and young people. They include; 1. Agricultural society of Kenya (ASK) ASK has the following functions; -holding agricultural shows. -encourge proper breeding methods in crops livestock. -running young famers clubs.

2. Young farmers clubs of Kenya.

It has the following functions; -participating in ASK shows and exhibitions. -participating in national tree planting activities. -participate workshop and seminars.

3. Kenya national farmers union.

Functions  of the Kenya national farmers union are; -bargaining for better producer price. -ensure adequate and timely supply of inputs. - Provision of loan facilities. -offering technical services to the farmer.

4. Agricultural based women groups.

Functions of  Agricultural based women groups include; -establishing income generating activities. - enlighten women on modern farming methods. -assist members with loans when necessary.

Marketing boards

Marketing boards include ;

  • Pyrethrum board of Kenya.
  • Cotton board of Kenya.
  • Kenya sugar board.
  • Horticultural crops development authority.
  • Kenya meat commission (KMC)

Pyrethrum board of Kenya.

Has the following functions; -buying pyrethrum from farmers. -carry out research production, and processing of pyrethrum. -advising farmers. -marketing processed products. -manage pyrethrum nurseries.


Cotton board of Kenya.

The board has the following functions: -regulate cotton growing and ginning . -licensing and controlling quality of raw cotton. -carry out of research -regulate export and import cotton lint. -Train farmers on cotton production.


Kenya sugar board.

The board has the following functions; -advice farmers on sugarcane production. -formulate price of produce price of sugar. -offer cane testing services and cane quality control. -advise all aspects of sugar processing -register all cane producers.


Horticultural crops development authority.

This has the following functions; -collecting produce from farmers. -sorting and grading produce. -marketing produce locally and abroad.


Kenya meat commission (KMC)

Has the following function; -buying cattle from farmers. -slaughtering cattle. -grading carcass. -marketing beef locally and a broad. Long shot photo of Kenya meat commission headquarters.


This is an organization of people who pool their resources together with a cmmon aim of mutual economic benefit.

Steps in cooperative formation:

For a cooperative society to be formed it requires a minimum of ten adults who have similar needs. The group then selects an interim committee, give the cooperative a name provide it�s constitution and registers it with commissioner of cooperatives

Functions of cooperatives.

They include the following;

  • marketing farmers produce.
  • Negotiating for fair prices.
  • Educating farmers.
  • Recording cooperative activities.

Principles of cooperatives include the following;

  • Open membership:members join voluntarily upon payment of registration fee.
  • Equal rights: it is run democratically-one man one vote.
  • Share limit: a member is allowed to buy shares upto a specific limt
  • Interest on shares: dividend are distributed to members on the basis of share contributions.
  • Withdrawal from membership: members are allowed to withdrw from the cooperative voluntariry.
  • Loyality:members are expected to faithful and loyal to their cooperative society.

Education: members should be educated and trained in relevant cooperative skills.

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