Instrument

Description

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Instrument

Development of market infrastructure

Description

The expansion of existing markets or the development of new ones (e. g. assembly or wholesale markets, retail markets, rural markets) is a key prerequisite that enables farmers and their cooperative marketing organisations to increase their sales.

Public investment in local and regional marketplaces can improve the quality of the food on offer and also improve sales opportunities for local producers and traders by providing better access for consumers. In developing countries and emerging economies, unsurfaced marketplaces with inadequate roofing and poor drainage often spoil agricultural goods more quickly and keep suppliers, traders and consumers away, particularly in the rainy season.

Markets should always be established or renovated on the basis of the respective local demand, including the availability of market-related services (e.g. storage, cleaning services and price information) on site and a financial assessment. In theory, improving physical market infrastructure should enable markets and their supply channels to operate all year round.
Users of these facilities as well as chambers of commerce, farmer organisations, and representatives of private sector trading interest or consumer groups should be involved from the beginning of the process, especially in discussions on operating procedures and fees. Information and awareness campaigns might be necessary.

Farmers that are organised in cooperatives may invest jointly in and manage processing, drying, cleaning and storage facilities, etc. This often involves considerable investments in buildings, logistics and management of storage and sales facilities.

Requirements

  • A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
  • Clear and coherent political strategy and targets for policy-makers and public authorities
  • Open-access to all farms, regardless of size and location
  • Participation of all stakeholders involved, e. g. science / research, agricultural advisory services, civil society, public and private sector (incl. farmers and their interest groups)
  • Acceptance / Recognition of the local population
  • Clarification of responsibility for maintenance work
  • Close cooperation and knowledge sharing with farmers' organisations
  • Purchasing power and market demand in a growing rural economy
  • If applicable, acceptance of quality management systems established by private sector actors at state and public administration level
  • Inclusion of municipalities
  • Legal certainty
  • Secure financing both for investment and maintenance

Possible Negative Effects

  • Investments in market infrastructures fail to meet demand and are not sufficiently used
  • Management and supervision quality does not meet market requirements
  • Unequal access to markets due to dominant power structures
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This page was last edited on 18 June 2020 | 15:48 (CEST)
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