2.4. Transportation Cost of Agricultural Produce and Farmer's Income

Cost of transportation of agricultural produce from the farm sites to the market has a great impact on production and income of farmers. This is because transport charges on agricultural produce vary with type of crops, the efficiency of the transport and distance travelled. A significant proportion of the farmer's income had gone to transportation and this is as a result of bad roads in these areas. High cost of transportation would translate to high selling price and if the price is too high when compared with other farmers from other areas, customers will not buy and this may result to selling at a loss.

The importance of an efficient and competitive marketing system has been stressed as a complement to rural transport services (RTS) and infrastructure in promoting development. However, the presence of markets in them also constitutes a means by which the effective demand for transport can be increased. A market acts as a point where goods and people are amalgamated together and thereby concentrating the demand for transport. Where populations are dispersed markets are also likely to be dispersed with long average distances to market and people less likely to make the trip. This is an important consideration for the demand for Intermediate means of transports where, if distances become too large, an Intermediate means of transport may not be viable.

In addition, one of the most effective ways that farmers have of getting the best price for their produce is for them to sell it themselves directly to final consumers at rural or urban markets, and thus bypass the normal marketing system. Although farmers do not have the economies of scale of travelling wholesalers it is often recognised by urban dwellers that the keenest prices are often provided by the farmers. Farmers bringing their own produce to market represent a very important way of limiting the power of the marketing cartels. Farmers rely on travelling wholesalers, traders, parastatals or large private marketing companies they all reduce the farmers bargaining power, and critically, it reduces demand for transport services and the supply of vehicles available for rural people. There is usually little support by the authorities for ‘unofficial’ trading and farmers are frequently harassed as they attempt to sell.