The Performance of Village Markets for Agricultural Produce: A Case Study of Pakistan

The role of marketing in the allocation of resources within the agricultural sector is an important one. This role consists in translating the market demand for various agricultural crops into profit incentives for the farmers. The marketing system that does not adequately perform the task of transmitting the profit signals from the consumers to the producers results in misallocation of resources and less than optimal application of inputs in the production of agricultural crops. Despite the importance of the marketing system, the analysis of the market structure and the dynamics of agricultural marketing have received little attention in the developing countries. Several recent works have explored the efficiency aspects of contemporary marketing systems [7,9]. A recent case study of the marketing system in Brazil has clarified some of the interrelationships between marketing and development [23]. Literature on marketing in Pakistan is scarce and deals mostly with the description of the institutional system [2, 18,19,20,21]. No attempt is made to test hypotheses regarding efficiency of the agricultural markets. The evolution of the marketing system is not systematically traced.