Impacts of Globalization on Agricultural Marketing

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Table of contents

Introduction 

Impacts of globalization on agricultural marketing 

Conclusion 

Introduction 

Agricultural marketing is an aspect of marketing which involves taking farm produce and other agricultural allied products to consumers for exchange of money. Marketing is an integral part of agriculture. Agricultural marketing is characterized with packaging, preservation, advertising, distribution and sale of agricultural products. Agricultural marketing is very delicate as farm produce are very prone to tissue decomposition and microbial spoilage because they begin to depreciate as soon as they are harvested — they have limited shelf life. 

Agricultural marketing majorly involves movement of heavy physical products. Globalization has lowered cost of cross-border agricultural marketing through technological development and has brought the global markets to one place through internet. 

Read also: Advantages and Disadvantages of Ranching

Impacts of globalization on agricultural marketing 

Access to larger markets 

Globalization has dismantled physical geographical, and political borders. Developments of different means of transportation has enabled easy movement of agricultural products. Globalization balances agro import and export ratio of developing countries, allowing them to harness their comparative advantages. Sometimes, larger market potentials exist in foreign markets than in the local market with globalization making access to the foreign markets almost free, agribusinesses now explore the foreign markets, generate sales with higher profits than what’s obtainable in the domestic market. Globalization is influencing people’s lifestyle, taste for quality agricultural products, purchasing power thereby expanding the agricultural market. The revolution in Information communication technology has facilitated accessibility of agricultural goods worldwide. Internet, networking and social media permeating the nooks and crannies of the remotest parts of the world have enabled smaller agribusinesses to compete globally, regardless of the location of both the seller and the buyer. The larger businesses also leverage on internet to access larger markets. Supermarkets or retail stores like Amazon, Alibaba, etcetera are leveraging on technology for online marketing. Agricultural commodities (cocoa, coffee, cotton, cashew etc) marketers are also engaging on online marketing.

Competition

As globalization expands access to market, competition becomes stiffer as consumers get access to the global markets at the tip of their fingers. With the use of IT searching for products is becoming simplified, consumers are even served with options at the comfort of their homes by targeted ads on social media blogs and websites. Agricultural marketers leverage on the internet to advertise and sell their commodities. 

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Marketing cost 

Transport and logistics are the major agricultural marketing. With the technological advancements on means of transportation, agricultural marketing cost. Cost of advertisement is another marketing cost that has been reduced due to globalization. Social media has given agricultural marketer access to cheap advertisement platforms. 

Price

Prices of agricultural commodities are crashing because of competition. Buyers have access virtually to very market in the world, and would go for cheaper prices where ever. IT revolution is breaking monopoly in every region. Online marketing has led to price equalization — food and agricultural products are sold for same prices to all buyers, irrespective of their locations, only shipment cost makes a difference, dropshipping has also crashed shipment costs. The use of containers, trucks and vessels have led to the movement of quantum of Agro products at cheaper prices. When the cost of marketing is reduced selling prices of the goods equally reduce 

Payment

Rise in the use of Fintech (electronic payments systems) like e-wallets, mobile payments apps, e-invoicing,  others have enhanced agricultural marketing globally. It’s now very easy to receive payments for goods sold anywhere in the world. Globalization has also led to free and easy movement of funds from one country to another, encouraging agro allied companies to invest abroad, and for easy repatriation of profits. There are many international money transfer operators, both conventional and mobile app/ online platforms that carry out international money transfer at ease from the comfort of your home 

Customer Service Management

Internet has enabled fast and 24/7 global customer service. Most businesses have e-database of their customers for effective customer service management. Some have self-service  mobile Apps and online platforms where consumers can get services in real time. 

Quality Standardization

Competitive nature of global market has led to standardization of agricultural products. It takes products that meet international standards to penetrate the global markets. Any good for global markets needs an international certification before it can allowed into the market. It enhances food safety. With globalization, the supply chain are carefully monitored to ensure imports meet food safety regulations and are free from tampering. 

Although, standardization is good for quality assurance, food safety and consumer protection, it does have some negative impacts on agricultural marketing. Global branding hinders products variety, creates entry encumbrances to small, local producers, and rejection of products from developing countries. 

Packaging and Preservation

Agricultural products are mostly fresh produce that go bad after a short period of time. With technological advancements, the shelf life of these perishable goods are improved. Experts have indeed said that fishes are vulnerable to tissues decomposition and microbial spoilage because they begin to depreciate as soon as they are harvested from the water. Through globalization, players in the fish farming value chain now adopt the use of technology in storage and processing of fish products. Refrigerating is used in preserving fish and indeed other meat products like chicken to make them appear attractive. Technology is used to package agricultural products for shipment and sell. 

Policies Reforms

Countries continue to reform their policies on agricultural sector to meet up with globalization. These policies are targeted at protecting their consumer population, local agricultural producers and marketers, and to improve their balance of trade through agriculture. Some of these policies are:

1. Trade policy reform: Globalization has led to continuous agricultural trade policy reforms. Each political government makes frantic efforts to protect its economy by ensuring that its economy takes the advantage of the globalization rather than other economies taking advantage of its own economy. No nation wants to become a dumping ground for agricultural goods. For instance, Nigerian government had to ban importation of rice to protect Nigerian farmers who couldn’t compete with imported rice from other rice producing countries, and to reduce food import bill. In Nigeria, imported rice is cheaper than local rice. Countries like Thailand, India give incentives to their farmers by subsidizing their produce. In the other hand, Nigerian government lifted ban on export of yam to be able to take advantage of  its comparative advantage, allow Nigerian farmers access to international markets. Globalization has facilitated collapse of trade policy barriers by many communist economies, allowing for free flow of agricultural trade.

2. Policies on agriculture incentives: Countries like Thailand, India give incentives to their farmers by subsidizing their produce. 

3. Food Safety regulatory policies and laws: Generally, food safety regulations apply to legislation regulating the production, processing, packaging, labeling, distribution and sell of  food. It therefore covers the regulation of food control, food safety and relevant aspect of food trade. This is to ensure that foods and other agricultural products in the value chain like animal feeds, on-farm controls are unadulterated and are not subjected to any fraudulent practices intending to deceive consumers. 

Read also: 11 Agricultural Marketing Channels

Conclusion 

The impacts of globalization on agricultural marketing can’t be overemphasized. It has impacted the agricultural marketing a great deal. The trend is expected to continue as technology continues to revolutionize enhancing ease of doing business. The global market keep expanding as more adopt the use of technology. Agriculture producers should therefore focus more on improving the quality of their products to global standards to be  accepted globally without which they can't even compete locally.



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