The marketing of agricultural products is undergoing a revolution. Where spot market transactions were once the 'norm' for farmers, increased attention is now being placed on vertical integration between farmers and other agents in the supply chain. This trend in the global food industry reflects growing consumer demand for attributes such as health, nutrition, convenience and variety; and the technological innovation that has enabled these attributes to be produced. Technological advances in farming include, for example, production of leaner pork and biological control of pests, to satisfy western health concerns. Innovations at the preharvest and post-harvest level in the production and handling of fruit and vegetables have satisfied consumer demand for a nutritious variety of fresh produce. Technical innovations in the handling and processing of food have also enabled production of more convenient foods demanded by the urban consumer. However, these processes often require a greater degree of homogeneity in the quality of raw inputs. The overriding feature of these trends has been the high value placed on certain food attributes and the interdependence of decision making along the supply chain to produce such attributes. This interdependence implies that coordination of decision making allows a greater economic gain in the agrifood industry (Hennessy, 1996; Royer, 1995; Kerallah and Kirsten, 2001). Increasing liberalisation of agricultural markets around the world has meant that developing country farmers are not immune to these changes in the global food industry. The impact of agricultural trade liberalisation on smallholders in developing countries is a hotly debated issue. However, at least in theory, developing country farmers, who have a comparative advantage in the production of some products at the farm level can potentially benefit from participating in the global food industry. One of the significant constraints in the realisation of gains from agricultural production in developing countries is the marketing of these products. These constraints relate to inferior technology in the supply chain, insufficient information, weak institutional arrangements and high transport and handling costs that are the result of weak public infrastructure. Moreover, consumer preferences in the global market for agrifood products are such that economies of scale are significant.
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