Share this:


  • Agricultural marketing is an economic activity which involves the distribution of farm produce from the farm to the consumer.

Market and Marketing

  • Market is an institution for the exchange of goods and services or a place where selling and buying of goods takes place.
  • Marketing refers to the flow of goods and services from the producer to the consumers.

Marketing Functions

  • Transportation Movement of goods from production centres to the consumption centres.
  • Buying and selling – Purchase of goods from the producer to be sold to the consumer.
  • Storage – Agricultural products are seasonal hence storage is necessary.
  • Processing-Changing of raw form into utili sable form.
  • Grading and standardisation – Sorting into uniform lots of certain qualities.
  • Assembling – Collecting the farm produce from the farm to the market centres.
  • Collecting market information – To know the prices, supply and demand of certain commodities.
  • Advertising Making the consumers aware of the produce.
  • Bearing of risks Such as fire risk, price fluctuation.
  • Financing or expenditure on other processes.
  • Packaging or putting into small packs and labelling.
  • Packing or putting produce In containers such as bags.


Marketing Agencies and Institutions

Middlemen (itinerant trader) are the people who buy from the producer and sell to other agencies.

  • Wholesalers – Buy in bulk and sell to the retailers.
  • Retailers Buy from the wholesalers and sell in small units to the consumers.

    Problems in Marketing Agricultural Produce

  • Farm produce are bulky, that is weight and volume are high but low in monetary value thus difficult to transport.
  • Most of the agricultural products are perishable for example milk, vegetables and fruits.
  • Storage problems (since they are bulky they require a lot of space).
  • Lack of proper transport system since agricultural products are in the rural areas and the market are situated in urban centres.

    Price Theory

  • Price is the amount of money paid in exchange for goods or services.
  • Price theory is concerned with the determination of price of any commodity.
  • Price is determined where demand for and supply of any commodity are equal to each other.


  • It is the quantity of any commodity which is purchased at any price within a given time.
  • The law of demand states that quantity demanded changes inversely with the price. Demand Curve
  • The curve slopes from left to right downwards.
  • This means people buy more at lower prices and vice versa.



Demand Curve

Image From



Factors Affecting the Demand of a Commodity

  • Population
  • Income of the consumer.
  • New inventions.
  • Taste and preference of the individual.
  • Price of the substitute commodities.
  • Price expectations.
  • Culture and social values of the consumers.
  • Price of commodities having joint demand for example tractors and diesel.

    Elasticity of Demand

  • It is the responsiveness of demand to a change in price.
  • Elasticity of demand = Percentage change in quantity demanded Percentage change in price


    Types of Elasticity of Demand

  • Elastic demand is one where the ratio is more than 1.
  • Unitary elasticity is one where the ratio is equal to 1.
    Inelastic demand is one where the ratio is less than 1.



  • Supply is the quantity of any commodity which is offered for sale at any price at a given time.
  • The law of supply states that when price rises, quantity supplied increases and when price falls quantity supplied decreases (other factors held constant).

    The curve rises from left to right upwards.

  • This means that people are willing to offer more for sale at higher prices.



Image From


Factors Affecting Supply of a Commodity

  • Number of sellers
  • Price of substitute commodities.
  • New technology.
  • Price expectation.
  • Peace and security.
  • Weather conditions.
  • Policy of the government.
  • Cost of production of the commodities.

    Elasticity of Supply

    This refers to the rate at which quantity supplied changes due to a change in price level.


. .   Percentage change in quantity supplied

 Elasticity of Supply= Percentage change in Price

Type of Elasticity of Supply

  • Elastic supply one where the ratio is more than 1.
  • Unitary elasticity of supply is one where the ratio is equal to 1.
    In elastic supply is one where the ratio is less than 1.

    One of the problems of agricultural produce is that supply does not readily adjust to price changes.

    Equilibrium Price

  • Is the price at which demand and supply are equal.
  • That means whatever is offered for sale at the market is bought.
  • In the graph below, the quantity supplied and demanded are equal at a price of Shs.300 and quantity of 80kg.
  • At this point the price is higher than shs.300 then the supply will be greater than demand and there will be surplus hence price will fall.
  • If, on the other hand, the price is less than shs.300 demand will be greater than supply hence shortage and rise in price.

Image From



Agricultural Organization

  • Agricultural organizations are agencies which, through their activities, promote agricultural development.
  • These organizations are cooperatives and statutory boards.


  • A co-operative is an organisation of people with a common aim of pooling their resources to achieve their objectives.

    Functions of Co-operatives

    A co-operative society carries out the following functions:

    • Collecting and assembling members’ produce.
    • Processing the farm produce after collection.
    • Transportation of members’ produce to market points.
    • Negotiation of fair prices with the purchasing agencies for the members’ produce.
    • Purchase and distribution to members of farm inputs.
    • Storage of members’ produce before transmission to market points.
    • Provision of credit facilities to members on easy terms.

      Training and education of members on improved farming techniques.

    • Offering farm machinery services to their members on hire terms for farm operations.
    • Co-operatives may invest in other viable ventures and the profits realised are shared among members in form of dividends or bonuses. Formation and Structure of Co-operatives

    The formation of a cooperative takes the following stages:

    • Individuals with common interest collect together to form a primary cooperative society

    • At least ten (10) members qualify for registration.
    • Each primary cooperative society elect their office bearers consisting of chairman, secretary and treasurer.

    • Several primary co-operative societies are usually amalgamated to form a district cooperative union.
    • Tertiary cooperative unions are nationwide organizations to which the secondary co-operative unions are affiliated.
    • Examples are Kenya Planters Co-operative Union, Kenya Farmers Union, Kenya Cooperative Creameries, Co-operative Bank of Kenya, etc.

    • Apex organizations. This is represented in Kenya by Kenya National Federation of Co- operatives which is an affiliate of the International Co-operative Alliance. Problems Facing Co-operatives

    Cooperatives encounter the following problems in their operations:

    • Managerial problems arising from:
    • Financial mismanagement due to poor accounting.

      • Corruption and misappropriation of cooperative resources by the personnel in the system.
      • Lack of advisory services on technical operations.
      • Inability to meet the set obligations of providing credit facilities due to malpractices.
    • The nature of agricultural products and associated problems.

      • Bulkiness hence difficulties in transportation and storage.
        Perishability of produce hence difficult to sustain quality.
    • Inadequate capital to invest in the cooperative undertakings.

    • Transport problems due to poor roads.
    • This hampers the produce getting to the market points in time. Statutory Boards
    • A statutory board is an organization established by an Act of Parliament and charged with the running or managing of a certain industry within the government sector.

    Marketing Boards

    • Some of the statutory boards are charged with the marketing of certain farm produce and are thus called marketing boards.
    • Examples are the Coffee Board, Pyrethrum Board, Cotton Seed and Lint Marketing Board, Tea Boards, National Cereals and Produce Board, Kenya Meat Commission, the Dairy Board of Kenya and others.
    • Their marketing functions are to look for market and better prices.

    Research Organization

    • These are research centres which among other things, carry out research and trials on:
    • Development of new varieties and cultivars of crops.
    • Breeding disease and pest resistant varieties of crops and types of animals.
    • Adaptations of crop and livestock species to ecological conditions of certain areas.
    • Use of fertilizers and pesticides on crops in specific areas.
    • Development of early maturing and high yielding species.
    • Soil testing and crop analysis. Advisory services of agroeconomic aspects.

    Other Organizations

    Kenya National Farmers’ Union negotiates for:

    • Reasonable and affordable prices of farm inputs.

    • Better prices for farm produce.

    • Better credit facilities.
    • Better control of diseases and pest.

    Agricultural Society of Kenya

    • Organizes agricultural shows in the country.
    • Encourages improvement of livestock through exhibitions and educating farmers
      Organizes the running of young farmers’ clubs.
    • Organizes and finances the ploughing contests during which farmers learn the modern techniques of seedbed preparation.
    • Publish Kenya Farmersmagazines.


    Young Farmers and 4K Clubs.

    These are student organizations whose objectives are:

    • To expose the young students and encourage them to appreciate agriculture as a profession in their career.
    • To encourage the youth to develop leadership qualities through assignment of small farming projects.
    • Organizing students exchange programmes with other club members both locally and abroad.
    • To develop better farming skills through judging competitions, annual rallies and camps.

    Agricultural Based Women Groups

    • These are self-help groups whose objective is to uplift the economic status of their members by carrying out agricultural related activities.


Their success depends on the following factors:

  • Commitment of their leaders.

  • Motivation of the members.

  • Sacrifice for each other.





  • In Kenya land use is changing from extensive methods of farming to more productive and sustainable intensive methods.
  • Agroforestry is a method of farming which has become increasingly important.


  • This is the practice of integrating a variety of land use
  • It combines tree growing, pasture and crop production practice on the same piece of land to improve the output of the land.


Forms of Agroforestry

  • Agroforestry;

    • It is a combination of trees/shrubs and crops in agricultural production.
  • Silvopastoral:

    It is a combination of growing tree/shrubs, pastoral and keeping of livestock.

    • It is a combination of growing trees/shrubs, animals, pastures, and crops. Importance of Agroforestry
  • Environmental protection.
  • Source of income.
  • Afforestation for timber production.
  • Maintenance of soil fertility.
  • Aesthetic value.
  • Labour saving in firewood collection.
  • Source of food and feed.
  • Source of fuel wood.


Important Trees and Shrubs for Particular Purposes

  • Eucalyptus Spp;

    • Timber,
    • Bee forage,
    • Fuel wood,
    • Medicinal,
      Production of essential oils.
    • Acacia Spp
      • Leaves and pods eaten by animals,
      • Provision of shade.
    • Cajanus cajan (pigeon peas)
      • Proteinous feed for human,
        Used as fodder
    • Croton megalocarpus(croton);

      • Fuel wood timber for poles
        Handles for hand tools.
    • Erythrina abyssinica (flame tree);

      • Wood carvings,
      • Bee forage,
      • Nitrogen fixation
    • Markhamia lutea (markhamia tree);
      • Timber for construction,
      • Shade,
        Soil protection,
        Bee forage.
    • Grevillea robusta (silky oak.)

      • Timber,
      • Fuel wood,
      • Fodder,
      • Bee forage,
      • Soil protection,
        Wind breaker
    • Sesbania sesban (sesbania)
      • Fodder,
      • Nitrogen fixation,
      • Shade,
        Fuel wood.
    • Calliandra calothyrsus (calliandra)
      • Fuel wood,
      • Fodder,
      • Nitrogen fixation,
      • Shade,
        Bee forage.
    • Persea american (avocado)
      • Fodder,
      • Fruit production,
      • Shade,
      • Fuel wood.
    • Mangifera indica (mango)
      • Fruit production,
      • Shade trees,
      • Wind break,
      • Soil protection,
        Fuel wood.


Characteristics of Agroforestry Tree Species:

  • Fast growth rate.
  • Deep rooted.
  • Nitrogen fixation ability.
    By-product production ability.
  • Be multipurpose in nature.
  • Should not possess competitive ability with main crop ..
  • Have coppicing and lopping ability.
  • Have appropriate canopy – should not shade others.
  • Nutritious and palatable.

Trees and Shrubs to Avoid at Certain Sites and Reasons

  • Eucalyptus Spp.-should not be planted near water sources because it would absorb the water.
  • Eucalyptus Spp. -should not be planted on the arable land as the roots have allelophathic effects on other vegetation including crops.
  • Tall trees should not be planted near farm buildings because they may fall and damaging the buildings, their roots will break the building stones gradually.
  • Bushy trees or shrubs should not be near farm buildings as they may harbour predators.
  • Tall trees planted with main crop of a lower canopy intercept the rainfall, affecting the growth of the main crop.
  • Cypress trees have leaves which produce acidity in the soil preventing undergrowth beneath the tree.
  • These trees should not be planted within the farm but at the periphery. Tree Nursery
  • Tree nurseries are structures used to raise tree seedlings until they are ready for transplanting.
  • There are 2 main types: Bare root nurseries:

These are also known as ‘Swaziland’ beds where the seedlings are raised directly into the soil.


  • Cheap and less time consuming.
    Require less labour
    Occupy a small space.
  • Many seedlings are raised in a small space.
  • Transportation of seedlings is easy.


  • Root damage when uprooting the seedlings.
  • Difficult to transport.
  • Lower survival rate after transplanting.

Containerized nursery:

  • The seedlings in this type of nursery are raised in containers such as pots, polythene bags or tubes and tins.


  • Higher survival rate after transplanting.
  • No root damage.
  • Successful in arid areas.


  • Labour intensive.
  • Difficult to get containers.
  • Sometimes it may be difficult to get the right type of soil to use in the containers.

Seed Collection and Preparation

Seed Collection

Seeds should be collected from;

  • Adaptable trees,
  • High yielding,
  • Healthy
  • Resistant to pests /diseases.
  • The mother plant should be identified first.


The following methods used to collect seeds.

  • Shaking the tree.
  • Gathering from under the tree.
  • Lopping of the tree.
  • Climbing on the trees.
  • Hooking method.


Seed Preparation

  • This done when seeds are collected from a fresh fruit, they should be soaked in water, then washed and dried.
  • Cleaning and sorting: done to remove immature seeds, rotten seeds, broken or damaged seeds.
  • Drying: Done by sun-drying or oven drying.
  • Seed testing: this determines;
    • Seed quality for percentage purity,
    • Seed weight,
    • Moisture content,
    • Germination percentage.
  • Seeds should be stored in dry containers at room temperature.
  • Seed treatment: seeds are treated first to break the seed dormancy and ensure rapid germination;
    • Hot water treatment: used to soften the seed coat to make it more permeable to water.
    • Examples of seeds which require this treatment are leucaenia, calliandra and acacia.
    • Mechanical breaking: done by nicking the seed coat with a knife for easy entrance of water for example seeds of croton trees.
    • Light burning: applied to the wattle tree seeds.


Nursery Management

The following are the practices carried out in the nursery when the seedlings are growing:

  • Mulching:

    • Aim is to reduce excessive evaporation,
    • Moderates the soil temperature,
    • When it decays it improves the soil structure,
    • Reduces the impact of the raindrops.
  • Weeding:
  • Done to reduce competition for growth factors by uprooting the weeds,
  • Use a sharp pointed stick.

  • Done by use of a watering can
  • Done twice a day in the morning and in the evening.
  • Pricking out:
  • It is the removal of seedlings in an overcrowded area to another nursery bed,
  • This allows the seedlings to grow strong and healthy.
    Root pruning:

  • It is the cutting of the roots longer than the pots.

Root pruning is done for the following reasons;

  • Make lifting easier
  • Encourage fast establishment.
  • Reduce damage to the seedlings.
  • Encourage development of a short dense and strong rooting system.
  • Shading:

    • Done to reduce the intensity of sunlight .
    • Dark conditions should be avoided.
  • Pest and disease control:

    • Use of appropriate chemicals,
    • Sterilization of soil through heat treatment,
      Fencing to protect seedlings against animal damage.
  • Hardening off:
    • It is the practice of preparing seedlings to adapt to the ecological conditions prevailing in the seedbed.
    • It involves gradual reduction of shade and watering 1-2weeks before transplanting.
  • Transplanting:

    The practice of transferring seedlings from the nursery bed to the main field where they grow to maturity.

Procedure of Transplanting

  • Holes are dug early before transplanting.
  • Topsoil is mixed with compost manure.
  • The seedlings are watered well a day before transplanting.
  • The seedlings are removed from the nurseries carefully with a ball of soil for the bare root seedlings and roots trimmed for the containerized seedlings.
  • The seedling is placed in the hole at the same height it was in the nursery.
  • The container is removed carefully.
  • The soil is returned into the hole and firmed around the seedling.
  • The seedling is watered and mulched. Care and Management of Trees

    • From damage by animals such as goats and cattle by eating the leaves.
    • It is done by fencing the fields or using small poles around each seedling with or without wire nettings, can be done for individual trees or an entire field.
  • Pruning and trimming:
    • Pruning is the removal of extra or unwanted parts of a plant.
    • The unwanted part may be due to breakage, overcrowding, pests or disease attacks and over production.
    • Pruning initiates growth of shoots and trains the tree to have the required shape.
    • Regular cutting back of the trees is known as coppicing,
    • It is done at the beginning of each cropping season to reduce competition for water, minerals, nutrients and sunlight with crops.
    • The materials pruned or coppiced are used as fuel wood or for fodder crops.
  • Grafting old trees:
    • This is the practice of uniting two separate woody stems.
    • The part with the rooting system is known as root stock (base)
    • The part which is grafted onto the rootstock is called a scion which has buds that develop into the future plant.
    • The ability of the scion and the rootstock to form a successful union is known as compatibility.
    • Methods of grafting include whip or tongue grafting, side grafting and approach grafting.


Agroforestry Practices

  • Alley Cropping/Hedgerow Intercropping:
    • The growing of multipurpose trees and shrubs together with crops.


  • Improve soil fertility through nitrogen fixation and organic matter.
  • Provision of green manure.
  • Used as fence and mark boundaries.
  • Acts as windbreaks.
  • Suppress weeds.
  • Source of timber and fuel wood.


  • Multi-storey cropping
    • This is the growing together of trees of different heights.
    • The system is based on crops which can tolerate shading.
    • The trees and crops form different levels of canopy which look like storey.


  • Increases water conservation for pastures.
  • None of the crops or trees included will be shaded.
  • Act as windbreak for crops.
  • Creates suitable micro-climate in the area.
  • Trees are used for timber, fuel wood and forage.


  • Woodlots (farm forests)
    • These are plots of land set aside for trees only.
    • They are established in the hilly and less productive parts of the farm.
    • Fast growing tree species such as Eucalyptus spp. should be grown.


Sites for Agroforestry:

  • Farm boundaries – provide live fences.
  • River banks – protect water catchment areas.
    Homesteads – provision of shade and windbreak
    Terraces – for soil conservation.
  • Steep slopes – as contour hedges to encourage water seepage.


Tree Harvesting Methods

  • Pollarding
    • This is the extensive cutting back of the crown of the tree about 2-3 meters above the ground level to harvest all the side branches.
    • It stimulates the development of a new crown and branches.
  • Coppicing;

    • Cutting the main stem of the tree completely at a height of 10 – 50 cm above the ground.
    • The tree should be cut in a slanting angle.
  • Lopping or side pruning

    The removal of selected branches of the tree
    Done to produce fuel wood and fodder.

  • Shaking of the tree

    This is a method of harvesting pods and seeds from trees without cutting the tree.

  • Cutting back;

    The tree is cut from the base to allow new growth as done in coffee when changing the cycle.

  • Thinning;

    The removal of some of the trees growing in lines to give the remaining trees enough space to grow.


Share this:

EcoleBooks | Agriculture Form 4 - Agricultural Economics V (Agricultural Marketing and Organizations)


Leave a Reply

Your email address will not be published. Required fields are marked *

Accept Our Privacy Terms.*