MARKETING AND CREDIT

The structure of rural markets influences the incidence and persistence of rural poverty, because it is instrumental in determining the way in which trade takes place and the processes governing the terms of exchange. Marketing systems in developing countries are diverse in structure and often complex. They comprise arrangements for credit, storage, transport and involve a hierarchy of intermediaries: e.g. large and small operators, cooperatives and state agencies engaged as traders, processors, distributors, wholesalers and retailers. The one common characteristic shared by many developing countries is that transactions, especially by the poor, tend to be relatively small. The rural poor participate in those exchanges as producers of small quantities of cash crops or food surpluses to sell, as net purchasers of food and other basic necessities for their own consumption, as petty traders in staple food-producing areas, and as labourers in agricultural production, food processing and local distribution.

Plans to expand production can often be unsuccessful because insufficient attention is paid to marketing, finance and agro-processing issues. FAO technical cooperation is typically focused on the provision of marketing facilitating services by member governments in the context of market liberalization and support to the private sector, on policy and operational advice, and on the creation of viable and sustainable rural financial systems. As regards agro-processing, FAO promotes value-added transformation technologies, within an appropriate policy environment.

For references to specific Normative Frameworks and "best practice" project examples, see:

• Agricultural Marketing and Processing
  
• Rural Finance

USEFUL FAO LINKS:

• Agricultural Support Systems Division
  
• Agriculture 21
  
• Agricultural Marketing
  
• Rural Finance