Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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 Developing institutional innovations – Developing the innovation so that it can be
taken to a next level and they can be distinguished from traditional institutional
approaches. The Islamic Republic of Iran introduced Integrated Pest Management
(IPM) as an approach in the 1960s in response to addressing the negative effects
associated with applied intensive agriculture technologies and the impacts of the
green revolution on human health and the environment. The initial attempt was not
successful and led the Government of Iran to further develop IPM according to the
Farmer Field School (FFS) concept as the solution to the socio-technical and
institutional shortcomings of conventional approaches in Iran. The first IPM/FFS was
established in 1999 and empowered farmer communities to acquire necessary
decision-making skills for individual and group action towards sustainable production.
 Converging institutional innovations – Innovative institutions gain momentum
through a critical mass of participants implementing the innovative institutions. In
Benin, the Songhai Centre’s integrated production model is an example of a converging
institutional innovation. This production model is considered innovative in the sense it
creates a solid and integrated network of regional hubs that excel in sustainable
production and which have established local markets for sustainably produced goods
that are accessible and affordable for the majority of Benin’s population.
1.4 Conceptual Framework for the Study
Bringing together the previous sections on market systems, the agricultural and food market,
and the position of agricultural market institutions leads to the Conceptual Framework of this
study . The agricultural and food market is a strategic sector for nearly all OIC
Member Countries given its potential to address some of the most pressing concerns. A well-
functioning agricultural sector can support Governments to realize (agricultural) policy
objectives such as food security, food self-sufficiency, food stabilization, equal and fair access
to food, and reasonable prices. In a broader sense, a well-functioning agricultural sector may
support policy objectives such as competitiveness, industrialization, and rural poverty
alleviation. Therefore, it is not surprising improving agricultural market performance is the
heart of the economic growth in most of the OIC Member Countries and is a fundament of the
COMCEC’s strategy.
Governments rely on a number of agricultural market institutions to actively carry out these
types of agricultural market interventions. These market institutions are classified and defined
as follows:
1. Commodity market regulation authorities , which directly shape the agricultural
and food market through rules and regulations on, for instance, property protection,
governance, accountability systems, quality standards, and grades.
2. Cooperatives, which coordinate production, transportation, improve bargaining
power (and hence counterbalancing imperfect competition), and distribute inputs.
3. State-owned economic enterprises, which carry out producing, processing and
wholesale activities on behalf of the Government.
4. Marketing boards, which are commodity-specific organizations responsible for
various parts of the commodity’s market system such as production, processing,
distribution, transport, and trade, as well as promotion of domestic consumption and
exportation.