PowerPoint Presentation

Market Oriented Extension Service Berhanu Gebremedhin, Scientist, ILRI1

Three key elements in market oriented agriculture Improved technology and practices

Information/Knowledge

Skills Commercial transformation of smallholder agriculture Commercial transformation of agriculture in Ethiopia

Market oriented agriculture?

Market orientation in production planning

Market participation in output markets

Why commercial transformation? Better income and wealth accumulation

Commercial transformation Commercial transformation requires extension service include:Promotion of improved technologies and practicesAdvising and supporting farmers to produce profitable market oriented commoditiesFacilitating market linkagesProvision of market informationBuilding marketing and agribusiness capacity of farmers Facilitating organization of farmers to conduct collective marketing The production-oriented extensionHistorical emphasis on food security through own production

Extension: technology and production oriented

Lack of awareness about market-oriented extension

Lack of capacity to provide market-oriented extension (MOE)

Training of DAs and SMSs oriented towards production technologies and productivityMarketing, agribusiness, farm planning and management, market oriented extension methods mainly missing.Mid career program good start From Production-oriented to Market-oriented extensionShift towards commercialization implies attention to:market-oriented production planningInput and output marketing support services

Hence, commercial transformation requires expanded mandate of the extension serviceaim is to support to rural households and their enterprises to earn better incomeNeed to combine technology promotion and productivity enhancement with market supportPromoting Market Oriented extension Raise awareness about the importance of MOE and

Build the capacity to provide MOE service

Enhance understanding of front-line workers about market-oriented production, agricultural marketing and value chains

Equip extension agents with tools and methods of market-oriented extension

What is market-oriented extension?Total effort of extension service to:Advise and support farmers to plan and produce profitable commodities using appropriate technologies and practices

Build marketing capacity of producers

Collect and communicate market-related information

Identify profitable markets and buyers

Link farmers to buyers

Facilitate and support collective marketingKey Principles of market-oriented extensionBusiness principle

Commodity development approach

Based on value chain framework

Bottom-up and participatory

Roles of the market-oriented extension agentFacilitator of identification of profitable commoditiesPromoter of agricultural technologiesSupporter and advisor of business plan developmentFacilitator of linkages with input suppliers, credit providers, transporters, processors, and output buyersRole (2)Builder of marketing capacityCollector, processor and disseminator of market information Repository of technical and market related informationFacilitator and supporter of collective marketingFacilitator of market infrastructure development and market service development

Facilitating the supply of market information

Market information:All the information about the buying and selling of agricultural productsMore than just information on prices and quantitiesMarket information service: The function of collecting and processing market data systematically and continuously, and of making it available to market participants in a form relevant to their decision-making.Market information becomes more important in distant markets and as market orientation of farmers increasesIdentifying market opportunities

Fundamental considerations:Current and future size of the market

Current and predicted profitability of the marketTypes of market opportunitiesExiting products, existing markets

Existing products, new markets

New products, existing market

New products, new markets

Niche marketing

Organic marketing

Diversifying export markets

Brand promotion

Encouraging local consumption

Adding valueFacilitating collective marketingCommon marketing problems faced by smallholdersLow volume of supply and high per unit marketing costQuality and standard problemStorage problemTransportation problemLow marketing skillsLittle prior contact with buyersLow bargaining powerInadequate market information

Advantages of collective marketingEconomies of scaleMaintaining product supplyImproving product qualityMaintain existing marketsDevelop new markets

Activities in collective marketingIdentification of marketsIdentification of quality attributesEnsuring produce quality standardsDeveloping market infrastructurePerform marketing functions

Organizing farmers for collective marketingFormal collective marketing

Informal collective marketingKey considerations to avoid collective marketing failureRight to supply

Quality assurance

Side-selling

Profit sharing arrangementsTHANK YOU!