By: Hanks Saisai
Every farmer desires to have a target market for their produce. In essence, the ultimate goal of farming is for one to engage in the production of commodities that can be sold to generate an income.
However, farmers face several challenges when marketing their products, making it crucial for them to understand the different enterprise-specific marketing channels available in Namibia.
Livestock farmers must be cognisant of the respective marketing channels at their disposal and understand the critical components of each marketing channel. Firstly, a cattle farmer must understand the abattoir as a marketing channel for livestock.
Cattle farmers can have access to abattoirs such as MEATCO and BeefCor that slaughter cattle to produce beef, which is sold to export markets such as the EU, United Kingdom, USA, China, and Norway. Abattoirs can offer secure marketing channels with predetermined prices according to cattle categories, age, and meat quality. However, the downside of abattoirs as a marketing channel is that a farmer will usually be a price taker.
Additionally, when there is a disease outbreak, farmers cannot market their livestock to abattoirs. The second marketing channel for livestock farmers is usually auctioning.
Auctions are held in most cattle-producing regions in Namibia, such as communal areas South of the Veterinary Cordon Fence. Auctions are conventionally organized by auctioneers such as AGRA, Blauwberg Auctioneers, Namibia Livestock Auctioneers (NLA), and Windhoek Livestock Auctioneers (WLA) and Karoo Ochse auctioneers that are responsible for bringing sellers (farmers) and buyers together to market livestock on offer successfully. Prices are usually determined through bids and offer that the buyers suggest for the respective livestock being sold. Most prominent auction venues are typically equipped with weighing scales to assess livestock prices.
Auctions have the following advantages: the price is known, costs are known, competition among buyers results in reasonable prices for sellers, they are regularly organized, and money transfer to the seller is always immediate.
On the other hand, some disadvantages of auctions are: Low livestock numbers may result in fewer buyers; buyers can collude on purchasing prices. At times, a farmer may risk going back home with unsold livestock.
The third livestock marketing channel is permit days which are usually common in communal areas. Usually, permit days involve a single buyer agreeing with a community or group of farmers to buy livestock at predetermined prices on a given day at a given venue.
In well-organized communities, the buyer agrees to purchase livestock of different classes at extraordinary prices.
Usually, prices and venues are announced on the radio for interested sellers to bring livestock to permit days. The livestock has to be weighed one by one when sold.
Advantages of permit days are price is known, money is readily available for the seller, most buyers are willing to take all livestock on offer, and permit days are regularly organized. The disadvantage is that prices may be below due to a lack of competition from buyers.
In the case of crop farmers, there are several marketing channels for their produce in Namibia that are formally recognized. The first available marketing channel for crop producers is to offer their cereal grains to local millers in their respective areas, who usually process the grains into a staple powder used to prepare consumables such as pap, porridge, oshifima and others.
This channel offers a reliable market; however, farmers get low prices due to an oversupply of the produce. The second marketing channel available to crop farmers in the informal market is usually in the form of street vendors who procure produce directly from the farm gate.
This market is reliable for farmers near urban areas, and usually, farmers do not incur any transport costs as the buyer collects the produce from the farm.
Additionally, the farmer is always a price setter in this marketing channel. However, a significant disadvantage of this marketing channel is that not all products will be sold by the farmer and may result in wastage if the product is not bought on time. Crop farmers also can sell to wholesalers and retailers.
However, these are highly sophisticated marketing channels with numerous terms and conditions that a farmer must adhere to. These marketing channels offer competitive prices, and all the farmer’s produce can be purchased provided that it meets food safety, grading and sorting standards. Farmers may be provided with a formal supply agreement valid for 2 to 3 years. This agreement will outline the quantity that must be delivered weekly or monthly for each respective commodity.
For example, a farmer may be contracted to supply 10 000 kg of tomatoes monthly to enable wholesalers or retailers to distribute to their respective outlets.
This being the most reliable and most sought-after market for horticultural products always requires farmers to have well-planned production schedules for them to meet the demand patterns of markets.
The biggest challenge with this marketing channel is that farmers find it hard to keep up with demand patterns. Hence, they become a supply risk to wholesalers and retailers who opt to import produce from advanced agricultural setups such as South Africa.
Success in most farming businesses relies on marketing channels available to farmers. Hence, farmers are always urged to study markets and analyze paradigm shifts in the sector.
Additionally, before deciding on which marketing channel to focus on, farmers are advised to carefully study and understand each channel’s advantages and disadvantages to make informed decisions. *Hanks Saisai, Technical Advisor: Crops & Poultry at AgriBank
For enquiries, kindly contact the Marketing and Communications Division Tel: 061 2074308/10/55 Fax: 061 2074206 Email: info@agribank.com.n.
