The Role of Trade in Marketing Rural Products

Overview

Trade has an important role to play in marketing rural products beyond regional and national borders.The sales markets for rural products vary considerably according to the country and product. Transportation and being connected to the road network is a very important location factor. The following article explains....

The role of trade in marketing rural products beyond regional and national borders

The sales markets for rural products vary considerably according to the country and product. In most of the Least Developed Countries (LDCs), trade beyond regional or national borders is relatively unimportant. In many emerging economies, on the other hand, and especially in Asia, the rural economy is very much oriented towards international markets. This applies both to agricultural products such as rice and fruits and to non-agricultural products of the rural non-farm economy (RNFE), such as textiles. Trade relations are usually characterised by two specific features. Firstly, export, or marketing outside the producer’s region, is rarely carried out by the producers themselves; it usually involves intermediaries or – in the case of suppliers and contract farming – the parent company. Secondly, goods are usually transported via hubs situated near cities.

Ports and sea routes are vital to trade: a ferry in East Timor.

					Thailand		Viet Nam
	Sector				Food		Textiles and clothing		Food
	Number of companies questioned		N		76		30		21
	Sales markets (as percentage of total sales)
	Own province and neighbouring province		%		46.5		10.8		25.0
	Other inland provinces		%		23.5		27.5		26.2
	Neighbouring countries		%		1.3		0.6		0.5
	High-income countries		%		12.8		53.5		37.0
	Rest of the world		%		16.4		7.7		11.2
	Export rate 2006		%		30.4		61.7		48.7
	Source: University of Giessen / DFG FOR 756, Company survey in the provinces of Korat, Ubon Ratchathani, Nakhon Phanom and Buriram (THA) and Dak Lak, TT Hué and Ha Tinh (VN), 2007.