Analysis and Explanation of Olive Product Marketing Networks in Rural Areas of Tarom County

Introduction1.
Marketing agricultural products is a key strategy for accelerating the development of rural areas. It enhances income, well-being, and the quality of life for rural households. Tarom County, with its semi-tropical climate and the Qazal Ozan River, has unique capabilities for producing agricultural products, particularly olives. In recent years, olive production has been a significant part of the economic activities in rural areas. However, evidence suggests that the distribution network and value chain for olives in Tarom County are not efficient. Most olives produced are sold raw to neighboring counties for processing and sale. This situation, along with factors such as small-scale production units and structural weaknesses in production, sales, and supply, has led to instability and low-income levels for olive producers in rural Tarom. Furthermore, according to the Agricultural Jihad report for Tarom County in 2021, only half of the olive crop is processed locally. The structural weaknesses in production, sales, and marketing have resulted in low profitability and product value in Tarom County. Improving these conditions could enhance agricultural activities, increase product value, and boost exports in the region. Recognizing the importance of market regulation and addressing barriers to efficiency in rural economies, this study aims to achieve three objectives: Identify the most common marketing networks and channels for olives in Tarom County. Analyze the profit margins and net returns for olive producers from marketing in rural Tarom. Identify factors and obstacles affecting the efficiency of olive marketing networks in rural Tarom County.
 

Methodology

This research is classified as descriptive and survey-based. Additionally, it is quasi-experimental in terms of the ability to control variables. The study employs both quantitative and qualitative methods based on its scientific nature. Initially, a targeted interview approach is used to identify marketing factors and assess the most suitable marketing pathways for olives in the study area. The statistical population for this section includes all stakeholders involved in the olive marketing system in Tarom County. The sample size was determined based on theoretical saturation for information collection. Interviews with major olive producers were analyzed chronologically. Following this, interviews were conducted with buyers and sellers of olives, as well as others involved in the olive marketing cycle. Finally, interviews with experts and specialists were arranged to complete the information gathered. Due to the fact that most identified samples were not present in the study area except during the olive harvest season, access to targeted samples was limited. Consequently, only a few samples available in the region were selected for interviews. These interviews continued until theoretical saturation was reached. To further enhance the information, interviews were also conducted with experts in agriculture, horticulture, and agricultural jihad in the study area. The second section examines the factors influencing olive marketing networks. Given the breadth of the marketing topic, especially in agricultural management and economics studies, relevant indicators and factors were collected based on frequency and analysis of similar studies. For the quantitative part of the research, a researcher-designed questionnaire was used as the data collection tool.
 

Findings

Olive producers do not sell their products directly to consumers; instead, they sell to various marketing agents responsible for delivering the product to consumers. After purchasing olives from producers, these agents incur costs for transportation, packaging, warehouse, loading, etc. These costs, along with their profit margins, contribute to the final selling price of the product. To identify the most suitable marketing model for olives, the “marketing margin” model was utilized. Initially, the margin and final selling price of olives by each marketing agent in the study area were determined. By calculating the difference between the final selling price at the farm gate and the margins of each marketing agent, the most suitable marketing model was identified. The highest share of the final price received by olive producers (olive growers) was in the first channel, which plays a primary role in the olive marketing network. In this channel, the producer's share of the final price of olives was 49.47%. This marketing pathway includes the olive producer, private companies, retailers, and consumers. In the second section of the research, the criteria affecting olive marketing were examined. A total of 236 olive growers participated in this section. Most of them are men aged between 45 and 65 years, with education primarily at the elementary level. Their main activity is olive cultivation, typically in orchards ranging from 1 to 5 hectares. The average monthly income of the growers varies throughout the year; however, they reported an income range of 1 million to 1.5 million tomans. The daily activity of the growers in their orchard’s averages between 2 to 5 hours, with this level of activity varying throughout the year and peaking during the olive harvest season (spring and summer).
 

Discussion and Conclusion

Olive products are strategically important for Zanjan Province, especially in Tarom County. Activities related to the cultivation and processing of olives engage many residents of rural areas, and numerous institutions and rural agricultural industries are involved in the processing of this product in Tarom County and Zanjan Province. Olive growers have extensive experience in cultivation, and economic motivation is the primary criterion for their production activities. Retailers, wholesalers, brokers, and private companies are the main marketing agents for olive products. Evaluating the final profit obtained by growers through these marketing channels reveals a significant margin with low profits for farmers from the final value of the product consumed. These findings align with the research conducted by Ashouri (2012) and Jazvini et al. (2012), which also examined olive products in Tarom County. However, the focal point remains the examination and identification of barriers to the efficiency of olive marketing. Asoga et al. (2012) and Faris et al. (2019) indicate that the profitability and livelihoods of farmers depend on the marketing methods and networks, with the profitability of agricultural units being a critical factor for success in agricultural marketing. Moreover, Naghipour (2015), Kumar (2015), Vadaloo and Kareen (2013), and Rahman et al. (2012) highlight that product pricing, lack of awareness, and lack of information dissemination, as well as the presence of intermediaries and lengthy marketing and product transfer routes, are the main challenges and problems in marketing. The results of these studies indicate farm-level factors that were also considered in this research, such as pricing, production, production costs, institutional criteria, and demand. Nonetheless, individual and social components are also significant influencing factors following the farm-level aspects. Education, expertise, and the limited skills of growers in marketing Activities encompass individual and social dimensions. According to the research findings, marketing activities in rural areas are often conducted traditionally, without any scientific support, including modern sales methods. Growers typically rely on buyers and brokers to whom they have previously sold their products, lacking any information about the market and the final profits they obtain from their sales. Enabestani and Tohalabinajad (2018) identify physical factors as the main challenge in marketing agricultural products. Tarom County, particularly its rural areas that produce olives, regularly suffers from inadequate agricultural services and infrastructure for agricultural development. These factors were also the focus of the research, indicating a low level of infrastructure services and long distances between orchards and farms. Undoubtedly, the development of marketing activities depends on the improvement of transportation structures and infrastructure services. Based on the research results, in rural areas of Tarom County, despite the flourishing of small and micro-enterprises related to olive processing, there is a lack of development capabilities at the county and provincial levels. The growth of these businesses is also highly dependent on the development of infrastructure components, including processing factories and the establishment of olive sales stores.