2.1. Introduction

An efficient transport system is critically important to efficient agricultural marketing. If transport services are infrequent, of poor quality or are expensive then farmers will be at disadvantage when they attempt to sell their crops. An expensive service will naturally lead to low farm gate prices (the net price the farmer receives from selling his produce). Seasonally impassable roads or slow and infrequent transport services, coupled with poor storage, can lead to losses as certain crops (e.g. milk, fresh vegetables, tea) deteriorate quickly over time. If the journey to market is made over rough roads then other crops (e.g. bananas, mangoes) may also suffer losses from bruising; this will also result in lower prices to the farmer.

Agriculture is best served by consistent high urban, and international, demand. This is best brought about by an efficient, high volume, transport and marketing system where the transporting and marketing unit costs are low. If the margin between what the farmer receives from the sale of his produce and what the urban consumer pays for his produce is high then the effective demand transferred to the farmer will be correspondingly be reduced. Similarly if internal transport costs in a country are particularly high then the scope for agricultural exports will also suffer in comparison with other more efficient countries.

The pattern of agricultural marketing is strongly influenced by the nature of transport services. Many developing countries suffer from monopolistic, low volume and high cost transport and marketing systems. Economies of scale are present in both transport and marketing operations. In the following we will consider transport costs, the impact of roads on rural development, access to markets and the potential use of intermediate means of transport.