Agriculture Reference
In-Depth Information
different categories (according to character-
istics of, e.g. size, etc.), in agreement with
standards (uniform characteristics) estab-
lished by previous evaluation of the prod-
uct (Galdeano, 2002).
The establishment of commercial stand-
ards for horticultural products has con-
sisted, essentially, of the application of
quality regulations established at national
and international levels.
study: (i) the level of
transmission of the
price variations
(for instance, from grower
to wholesaler, from grower to destination,
from wholesaler to destination); (ii) the
level of
symmetry or asymmetry
of the trans-
mission; and (iii) the existence of
time lags.
In the same way, it is frequently of interest
to complement these analyses with a '
cau-
sality
' analysis, for example whether the
price at the origin determines the price at
the destination (or at any intermediate level)
or vice versa.
An acceptable level of price symmetric
transmission, with a time lag that does not
exceed the duration of the distribution pro-
cess, indicates a good performance of the
channel, which benefits all the involved
trade agents, and, especially, the grower and
the consumer. If the prices are well trans-
mitted, we may assume that the same hap-
pens to other kind of flows.
Normally, it is considered that the
larger the number of agents in the channel
the more difficult it is to achieve a proper
transmission, which in principle is logical.
In the hypothetical extreme case of a single
origin agent that would directly reach the
destination, selling directly to the con-
sumer, the price transmission would be, in
principle, perfect. Nevertheless, a situation
of monopoly would occur, which could
involve a darkening of the channel in detri-
ment of its transparency. In any case, there
are few analyses of the channels in pro-
tected horticulture.
Trade channels are usually represented
by means of graphs, which start at the
grower and end at the destination market,
the last step of the trade channel being rep-
resented by the consumer. The set of these
possible routes is called 'marketing chan-
nels'. The charts can reflect volumetric
flows of goods or other aspects (prices,
margins).
Taking the case of Almeria as an exam-
ple, the greenhouse vegetable grower, has
two basic alternatives to market his or her
products (Fig. 16.1): (i) trade them privately
as an individual (mainly at auction)
(Photo 16.2); or (ii) trade them through some
sort of association (cooperative, an associ-
ated growers organization such as SAT),
16.4
Marketing Channels
The trade or marketing channels are the
routes travelled by the product throughout
the trade process, from the grower to the
consumer.
Throughout the commercial channel, a
value adding process occurs and the utility
of the product increases. These increases in
the value are much higher in greenhouse
products than in any other agri-food prod-
uct, such as, for instance, plant oils.
Therefore, studying the marketing channels
in protected cultivation is of maximum
interest.
The main functions of the commercial
channel are: (i) the exchange and transfer of
the ownership of the commodity; (ii) the
physical functions (processing, storage and
transport of the product); and (iii) those
functions that ease the marketing process
(degree of product standardization, fund-
ing, risk assumption and market price
formation).
There are a number of different kind of
'flows' that are generated through the trade
channel, among which we can highlight,
besides the goods and services, the mon-
etary, financial, information and risk flows.
From the flows that pass through the
trade channel, some, such as those related
to the risk or the information are difficult to
analyse, whereas others, such as the finan-
cial ones, linked to the changes in the price
of the product are much more explicit and
easy to analyse. Therefore, usually, the price
transmission analysis is used between the
different segments of the channel to meas-
ure
its performing efficiency.
From the price
transmission, normally, it is interesting to
