The Agricultural Marketing Project in Ukraine Helps Farmers Identify New Distribution Channels
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| “Dary Adyrova” farm-stand, Bilyaivskiy rayon, Odesa oblast. |
The Agricultural Marketing Project (AMP) is currently working on ways to assist farmers in identifying, marketing, and better distributing their produce to increase incomes, lower expenses, and take advantage of market opportunities.
Challenge:
Vyacheslav Adyrov, the owner of Sonyachna Dolyna farm from Bilyaivskiy rayon, Odesa oblast, spent much time on distribution of his high-quality assortment and accrued large marketing and transportation expenses to get his produce to supermarkets and regional farmers’ markets. Besides, he could sell only a part of his yield and had difficulties identifying and tapping new markets.
Initiative:
After conducting needs assessment, AMP suggested Adyrov to utilize the direct marketing sales method that could provide faster returns, give more control over selling, and reduce the amount of time and logistics expense involved in marketing efforts.
This effective business-model based on low-cost advertising, including roadside billboards and announcements, roadside merchandizing stands (permanent or tents), commodity sales directly from the field, etc., is widely used by farmers in leading agricultural countries and can be utilized by Ukrainian farmers
Based on the favourable location of the farm, AMP suggested Adyrov to start a roadside merchandizing point. With AMP support, a roadside pavilion was purchased and erected. AMP specialists recommended and assisted the farmer in developing his own trademark “Dary Adyrova” to add visibility to the pavilion and build a brand image of the farm. They also suggested using AMP price and client lists to search for new potential buyers.
As the farmer gathers experience and accumulates capital, the current roadside merchandizing pavilion can be reorganized into a full-scale roadside market stand. At a full-scale roadside market stand, several farmers can cooperate to sell commodities under a common distribution point and trademark, dividing the profits among themselves. Also, they can buy produce from other farms and resell them under their own brand. These roadside market stands can function the whole year, using stored produce to sell in the off-season. Also, as the concept develops the markets can sell imported and other products related to the fresh fruit and vegetable sector.
Summary:
As a result of the cooperation between AMP and the owner of Sonyachna Dolyna, the farmer has gained 150,000 UAH in profits, which is 32,000 UAH over the 2003 season. As before, a portion of the farm commodities are sold to supermarkets, but a larger portion of the remaining harvest is sold directly from the field using the roadside stand and sales channels suggested by AMP specialists. A big improvement over the previous year, according to Vyacheslav Adyrov, is that now he has no stored commodities and sells all farm produce, spoilage equals zero. Also, the farmer has achieved higher returns by cutting out sales to intermediaries and reducing transportation expenses by 20 percent.
Additionally, the farmer became aware of the possibility to sell his commodities via new wholesale channels. In the future, the farmer is considering the possibility of working jointly with neighbouring farms to create a roadside farmers market stand.
Quotation:
“In the past, the market information was unavailable. In our first 10 years, we sometimes gained small profits, but often gained nothing. I am thankful that we met AMP. For the first time we have the opportunity to work with professional experts.”
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