On the Mechanism of Changing Agricultural Market Structure

Abstract

1. In order to approach to the given subject, I limit my discussion to “marketing” structure in relation to the discussion of the other three speakers. I also limit the object of my analysis to fruits and vegetables as typical agricultural consumer goods in Japan.
2. One of the fundamental features of marketing structure of agriculture commodities is that most of them are marketed through wholesale markets. One of the principal functions of wholesale markets is that of compound physical transit, namely its function of subdividing into physical marketing lots, in addition to the function of keeping a rich assortment of items and of matching demand and supply of every item of every different commercial value. The other function is that of price discovery(defined by F. L. Thomsen). Such features of the marketing structure are also affected by fundamental conditions of agricultural marketing: (a) conditions of production and supply; (b) conditions of consuming and purchasing; and (c) physical featuresof merchandise.
3. The main aspects of changing agricultural marketing structure are (1) the development of cooperative marketing, (2) the expansion of the share of supermarkets, and (3) emerging problems of wholesale markets. These changes have been caused by the changes not only of fundamental conditions of agricultural marketing but also of general condition of marketing ((d) the spread structure of population, (e) conditions of physical marketing, and (f) conditions of labor supply in marketing industry), especially by those factors of (a), (b), (e), and (f).
4. The share of marketing amount of fruit and vegetables through wholesale markets has not yet declined. One of the reasons for this is the advancement of the establishment of central wholesale markets in almost every large city in every prefecture. Another reason is the constraint on the marketing through outside of wholesale markets due to skyrocketing land prices in and around big cities. But there exists a possibility for increased marketing through outside of wholesale markets, because the current transaction system of wholesale markets cannot fully correspond to rapid and structural changes in both agricultural and general marketing conditions. Therefore, it appears beneficial for farmers that the wholesale market system shonld be reformed to more flexible and freer transaction system.