MARKETING BOARDS
These are marketing organizations formed by the government to protect producers and consumers interests and to control economic development in the country.
Functions
Improving marketing organization and methods done by regulating quality and packaging standards, sales procedures.
Protecting produces and consumers against price fluctuations.
Protecting government interests.
Obtaining funds for sale production research and extension.
Carrying out research and sales promotion.
Improving bargaining power of producers on both, the foreign and domestic market.
Standardizing (stabilizing) prices using buffer stocks or stabilizing funds, international agreements etc.
Administering laws to maintain quality and standard of commodities.
Ensure steady supply of agricultural products to consumers.
Promoting production by taking part in actual production.
INTERNATIONAL TRADE
It is the exchange of goods/ services across different countries/ nations.
Significance of I international trade
Trade between countries allows each country to specialize in the production of certain goods.
Trade between countries enables to obtain products that can’t be easily raised in their country.
Cause countries to specialize to crops in which have comparative advantages to other countries hence stabilize higher prices.
NB: Payment in international trade is settled in foreign currency and exchange of goods is done across borders of nations.
Terms used in international trade
Terms of trade- ratio between price of export and of import.
Balanced trade- ratio of the value of exports and value of imports i.e. difference between the values of Exports.
Foreign exchange rate: Is the rate of exchange between the currency of one country to another e.g. Tanzania shs vs. Us dollars.
Foreign reserves: Refers to the total value of resources (expressed) in Dollars, gold and Sores i.e. special
Drawing rights held by a certain country
These acts as reserve from which international payments are made
Effects of international trade prices of economic developing cost
For example Tanzania as other developing countries depends on primary agricultural commodities such as coffee, sisal, tea, cotton, to get foreign exchange. Market for such commodities are very unstable because have low income elasticity of demand.
The cost of imports for raw materials expand each year exceeding our exports so we get a problem in “Balanced of payment” i.e. difference between total income and total expenditure.
Prices of our exports are not rising as much as the prices of imports so the terms of trade are getting worse.
NB: Generally developed nations benefit more from trading with UN developed countries/ developing countries.
International commodity agreements
There are some products which have many problems in the World market such as unstabilized prices. E.g. coffee, tea, sugar etc so the need of formation of international commodity agreements became necessary e.g. International coffee commodity.
i. To provide protection to countries which export the primary products against excessive production which may lead to low prices
ii. To protect the exploiting countries this exports the primary products against excessive competition among,
iii. To stabilize world prices for the products.
iv. To set overall out levels for all countries which produce particular product in the World.
v. To allocate quota shaves to each producing country for a particular product e.g. coffee, tea etc.
BALANCE OF PAYMENT
It is a statement that shows a summary of the country’s trading transactions with other countries in the
World.
It consists of income side and expenditure side which must balance.
The balance of payments account shows the total income and expenditure sides of the country for international transactions and the difference between them.
If the difference i.e. expenditure in imports is low compared to the income obtained from exports.
Balance of payment account (A/C) consists of:
a) Capital account
b) Current account
Capital account
It shows the movement of capital transactions including
Foreign loans.
Foreign investment.
Foreign gifts. (Grants).
If payments of this is greater than what the country receives from other countries there is a DEFICIETY in the capital account.
If the situation is vice versa, surplus is generated.
Current account
It shows two main items.
Visible
Invisible
Visible: These are items which can be seen e.g. raw materials, manufactured goods, capital goods etc. Invisibles: These are services such as insurance, tourist services, banking, and interest on foreign loans and profit on investments’. They can’t be seen physically.
When there is a deficit, the country can correct it by:
Selling foreign investments.
Asking debates (foreign countries) to pay back loans.
Withdrawing from accumulated reserves e.g. IMF
Borrowing from foreign governments, institutions, monetary fund’s e.g. IMF
When there is surplus of current account, the government can use it in:
Paying foreign debts.
Granting foreign loans.
Investment abroad.
Adding to the reserve.
Problems of prolonged deficit in balance of payments
i. Devaluation of the local currency i.e. reducing the value of the country’s currency in terms of gold and currency of other countries.
ii. Introduction of floating exchange rates (as opposed to fixed and constant exchange rates).
iii. Review of the country’s fiscal policies such as taxation and subsides.
iv. Total ban on some imports.
v. Introduction strict foreign exchange regulations.
Problems of marketing agricultural products
Seasonality.
Storage problems.
Perish ability.
Bulkiness.
Changes in market demand.
Low state of knowledge about marketing.
Limited elasticity of demand e.g. food products, food is generally basic and once the body has been fed to its capacity, there is hardly any room for more.
The demand for food increases with income only so long as income becomes the limiting factor to the food intake, after that the increase in demand may be limited only to certain food types such as meat, fruits, spices etc.
AGRICULTURAL EXTENSION EDUCATION
Agricultural extension is a general term meaning the application of scientific research and new knowledge to agricultural practices through farmer education. The field of “extension” now encompasses a wider range of communication and learning activities organized for rural people.
Diffusion and Adoption of Agricultural Innovations
Diffusion
Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
There are four elements in diffusion process.
1. An innovation
2. Communication Channels
3. Time
4. Social system Innovation:
An innovation is an idea, practice or object perceived as new by an individual or other unit of adoption. Technology is a design for instrumental action that reduces the uncertainty in the cause effect relationship involved in achieving a desired outcome.
The components of technology are: Hardware (physical) and Software (knowledge base).
A good innovation should have following five attributes:
• Relative advantage
• Compatibility
• Complexity
• Trial ability
• Observability
Re-invention is the degree to which an innovation is changed or modified by a user in the process of its adoption and implementation.
Communication channel:
It is the means by which the messages get transferred from one individual to another. Mass media are good for creating awareness knowledge where as interpersonal channels are good for forming and changing attitude of the people towards technology.
Social System: It is a set of interrelated units that are engaged in joint problem solving t o accomplish a common goal.
Components of a Social System
1. Structure: It is patterned arrangement of the units.
2. Norms: These are the established behavior patterns.
Opinion leader’s exhibit the norms.
i. Heterophily:
It is the degree to which pairs of individuals who interact are different in certain attributes, such as beliefs, education, social status and the like.
ii. Homophily: It is the degree to which pairs of individuals who interact are similar in certain attributes such as beliefs, education, social status and the like.
Time: It is involved in: Innovativeness, Innovation rate of adoption, Innovation Decision Process:
i. Innovation Decision Process:
It is the mental process through which an individual (or other decision making unit) passe s from first knowledge of an innovation to forming an attitude towards the innovation, to a decision to adopt or reject, to implementation of the new idea and to confirmation of this decision.
The steps in Innovation
I. Decision Process is:
a. Knowledge
b. Persuasion
c. Decision
d. Implementation
e. Confirmation
II. Innovativeness:
It is the degree to which an individual or other unit of adoption is relatively earlier in adopting new ideas than other members of a social system.
III. Rate of Adoption: It is the relative speed with which an innovation is adopted by members of a social system.
Adoption is a decision to make full use of a new idea as the best course of action available.
Rejection; is the decision not to adopt an innovation while
Discontinuance; is a decision to cease the use of an innovation after adopting it earlier. Discontinuance, then, is essentially adoption of an innovation, followed by rejection.
Discontinuance is of two types:
1. Replacement: Replacement discontinuance is a decision to reject an idea in order to adopt a better idea that supersedes it.
2. Disenchantment: Disenchantment discontinuance is a decision to reject an idea as a result of dissatisfaction with its performance.
Stages of Adoption
Adoption Process is the mental process through which an individual passes from first knowledge of an innovation to a decision to adopt or reject and to later confirmation of this decision.
Five stages of adoption process:
1. Awareness: At this stage an individual first hears about the innovation. This means that individual is exposed to an idea but lacking detailed information about it. This is somewhat like seeing something without attaching meaning to it.
2. Interest: At this stage individualism motivated to find out more information about the new idea. An individual wants to know what it is, how it works and what its potential may be.
3. Evaluation: At this stage mental trial of new idea takes place. An individual considers the relative advantage of the new idea over other practices/alternatives.
4. Trial: At this stage an individual tests the innovation on a small scale for himself. An individual seeks information about technique and method of applying the new idea.
5. Adoption: If satisfied with trial an individual will decide to use the innovation on large scale in preference to old methods.
Duration and length of time between any two stages varies with each practice and individual. The rate at which different individuals go through the different stages varies with the personal characteristics of the individual and the nature of the group influences on him.
Stages of Adoption Process as Used in Indian Researches
1. First information, most information and final adoption
2. Awareness, acquaintance and adoption
3. Awareness, trial and adoption
4. Awareness, knowledge, trial and adoption
5. Awareness, interest, evaluation, trial and adoption
6. Awareness, interest, trial, evaluation and adoption
7. Need, awareness, interest, deliberation, trial, evaluation and adoption
Adopter Categories
Adopter categories are the classifications of members of a social system on the basis of innovativeness, the degree to which an individual or other unit of adoption is relatively earlier in adopting new ideas than other members of a system.
i. Innovators:
Innovators are also known as “venturesome”. Venturesome ness is the salient value of the innovator. Innovators are very eager to try new idea. They have more cosmopolite social relationship. They have ability to understand and apply complex technical knowledge.
They have ability to cope with high degree of uncertainty about an innovation. They are risky, hazardous and daring in nature. They play gate keeping role in the social system. There are 2.5 percent innovators in a social system.
ii. Early Adopters:
Early Adopters are also known as “respectable”. They are localities and have opinion leadership. Members of the social system consider them as “the individual to check with” before using a new idea. Change agents consider them as “local missionary”. They hold “central position” in the communication structure of the system and are respected by peers. There are 13.5 percent Early Adopters in a social system.
iii. Early Majority:
Early Majority are also known as “deliberate”. They adopt new ideas just before the average member of a social system. They seldom hold leadership position. They Provide “interconnectedness” in the system’s networks. Motto of early majority is- “Be not the first by which the new is tried, nor the last to lay the old aside”. There are 34 percent Early Majority in a social system.
iv. Late Majority:
Late Majority are also known as “skeptical”. They adopt new ideas just after the average member of a social system. They adopt an innovation when they feel that it is safe to adopt. There are 34 percent Late Majority in a social system.
v. Laggards:
Laggards are also known as “traditional”. They are the last in a social system to adopt an innovation. They are the most localities and isolates. They possess almost no opinion leadership. The point of reference for the laggards is the past. They interact with people having traditional values. They are suspicious of innovations and change agents. There are 16 percent Laggards in a social system.
Five stages of Innovation-Decision Process.
1. Knowledge:
At this stage an individual (or other decision-making unit) is exposed to the innovations existence and gains some understanding of how it functions.
2. Persuasion:
At this stage an individual (or other decision-making unit) forms a favorable or unfavorable attitude towards the innovation.
3. Decision:
At this stage an individual engages himself in activities that lead to a choice to adopt or reject the innovation.
4. Implementation:
At this stage an individual puts an innovation into use.
5. Confirmation:
At this stage an individual seeks reinforcement for an innovation-decision already made, but he or she may reverse this decision if exposed to conflicting messages about the innovation.