Improving Agricultural Market Performance:
Creation and Development of Market Institutions
38
Indeed, the neglect of agriculture and agricultural market of the past decades has made way
for the revival of the sector and its market system. Global market systems, connecting
agricultural markets of developing countries, and their potential as instrument for sustainable
developing, poverty reduction, and realizing the Sustainable Development Goals (SDGs) have
been widely recognized and have received priority on the international policy-making
agendas.
It is in this context - which brings considerable new opportunities for agricultural market -
where market institutions have received substantial attention.69 This particularly concerns
their more moral function70 by providing business development services to individuals,
facilitating linkages between (foreign) agro-processors and individuals, and improving the
wider business environment71 to integrate small-scale famers into global market systems,
ensuring fair, equal, and accessible food at reasonable prices, and improving the livelihood of
small-scale farmers.72
As an example, the revival of agricultural market systems is driven by the need for
cooperatives, farmer associations, and Government-sponsored cooperatives to increase
bargaining power of individual small-scale farmers in order to negotiate contracts with
multinational corporations, optimize the market system’s efficiency, and realize economies of
scale to efficiently purchase inputs and organize extension and training services. 73
2.5 Selected Good Practices of Agricultural & Food Marketing Institutions
This section reviews some of the best practices for the mandates, structures, and operations of
different kinds of market institutions, together with some examples of less successful
institutions, which illustrate some of the common failures that such institutions should seek to
avoid.
This section has focused largely on African countries. More than half the OIC member states
are in Africa, and Africa is the region which, given its fragile food security, low agricultural
productivity, high population growth, inadequate infrastructure, and poor business climate, as
well as its vulnerability to climate change, has the greatest need for well-conceived and well-
managed market institutions and the appropriate policies for them to implement. It is
important, therefore, to identify agricultural market institutions, both in and outside Africa,
that can serve as best practice examples that could be adopted by African OIC Member
Countries. It is also important to identify market institutions, especially in Africa, which have
failed, and to explore the reasons for their failures. These examples can help governments, in
Africa and elsewhere, avoid future failures and adopt good practices.
69 Van Trijp, H. & Ingenbleek, P. (2010), “Markets, market and developing countries: Where we stand and where we are
heading”, pp. 9-16, Wageningen: Wageningen Academic Publishers.
70 Casson, M. & Lee, J. (2011), “The Origin and Development of Markets: A Business History Perspective,” Business History
Review, 85(1), pp 9-37.
71 Poole (2010), “From ‘market systems’ to ‘value chains’: what have we learnt sinc the post-colonial era and where do we
go?,” in Van Trijp, H. & Ingenbeek, P. (eds.), Markets, market and developing countries: Where we stand and where we are
heading, pp. 17-22, Wageningen: Wageningen Academic Publishers.
72 Van Trijp, H. & Ingenbleek, P. (2010), “Markets, market and developing countries: Where we stand and where we are
heading”, pp. 9-16, Wageningen: Wageningen Academic Publishers.
73 Barrett, C. & Mutambatsere, B. (2008), “Agricultural Markets in Developing Countries,” in Blume, L. & Durlauf, S. (eds.), The
New Palgrave Dictionary of Economics, pp. 2-3, London: Palgrave Macmillan.