Are market agents relevant?

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Those who believe that market agents are no longer relevant remind us that more than 50 years ago, when supermarkets started buying directly from farmers, markets and market agents did nothing about it.

Working as a market agent

They simply wrung their hands in dismay and complained about the disloyalty of some farmers.

To this day, there are markets that still have not responded to this development and they wonder why they are losing market share.

Fortunately, in more recent times, most market agents have corrected this deficiency, and serve both their supermarket and producer clients admirably.

However, some producers insist they don’t need the market as a price-determining mechanism. They know their costs, they claim, and are therefore able to negotiate supply deals with supermarkets and other buyers.

Well and good, but can this be said of every farmer? I doubt it.

By using a market agent and the commission market system, a farmer is able to establish realistic prices for his products. Used correctly, the agency model adds value to a farmer’s products and ensures that he is rewarded commensurately for his efforts.

Satisfying both sides
When a market agent operates within the parameters of the agency system, the result is satisfied customers on both sides of the spectrum. If we delve deep into the functions of a market agent within the agency model, we find that there are many areas of this service that contribute to the agent’s ‘relevance’.

Everybody shouts about the agent getting a good price. As important as this might be, it’s only one part of a much larger equation.

Competition sorts the good from the bad
Agents charge a commission for their services and must ensure that their clients – the producers – get value for their money. Agents would soon lose their relevance if they failed to do so.

The highly competitive nature of fresh produce marketing ensures that any market agent worth his or her commission is indeed highly relevant.

Michael Cordes is an agricultural journalist, consultant, trainer and former farmer.