The role of marketing in the allocation of resources within
the agricultural sector is an important one. This role consists in
translating the market demand for various agricultural crops into profit
incentives for the farmers. The marketing system that does not
adequately perform the task of transmitting the profit signals from the
consumers to the producers results in misallocation of resources and
less than optimal application of inputs in the production of
agricultural crops. Despite the importance of the marketing system, the
analysis of the market structure and the dynamics of agricultural
marketing have received little attention in the developing countries.
Several recent works have explored the efficiency aspects of
contemporary marketing systems [7,9]. A recent case study of the
marketing system in Brazil has clarified some of the interrela¬tionships
between marketing and development [23]. Literature on marketing in
Pakistan is scarce and deals mostly with the description of the
institutional system [2, 18,19,20,21]. No attempt is made to test
hypotheses regarding efficiency of the agricultural markets. The
evolution of the marketing system is not systematically
traced.