The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand. Wu-Cheng Liao, Tzong-Ru Lee and Saran Arayarangsarid

Transcription

1 International Symposium Agribusiness Management towards Strengthening Agricultural Development and Trade III : Agribusiness Research on Marketing and Trade The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand by Wu-Cheng Liao, Tzong-Ru Lee and Saran Arayarangsarid Multiple Cropping Center, Chiang Mai University National Chung Hsing University The Ministry of Agriculture and Cooperatives 2001

2 III : The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand 253 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand Wu-Cheng Liao 1, Tzong-Ru Lee 2 and Saran Arayarangsarid 3 Abstract The purpose of this paper is to understand how the vegetable marketing system works in urban cities in Taiwan and Thailand. We choose the third largest city, Taichung, in Taiwan and the second largest city, Chiang Mai city, in Thailand as our research objects. From the introduction of both cities in both countries and the results of questionnaires, Taiwan and Thailand can both get benefit from the experience of the other in order to improve the efficiency of the vegetable marketing systems in each country. 1. Introduction As we know, best marketing systems do not exist in the real world. The reason is that the development of the marketing system in any one country is heavily influenced by its own culture. This is also true for the vegetable industry. Therefore, one way to improve the efficiency of the marketing system in one country is to learn those from other countries. Taiwan and Thailand are both developing countries with long histories and different characteristics in agriculture. Taiwan is good at using high-tech facilities in the work environment and using modern marketing strategies to sell agricultural products. Thailand is good at mass production of agricultural products to obtain the effect of economy of scale. Hence, we choose vegetable as the agricultural products that we will discuss in the remainder of this paper. The general agricultural marketing systems and the vegetable marketing system in Taiwan can be shown as in Figure 1 and 2. Figure 1 shows that government policies have strong influences on the development of agricultural marketing systems in Taiwan. From Figure 2, we can find the main channels for vegetable in Taiwan. That is, farmers shippers (suppliers) or Farmers Association (Cooperative Association) wholesale vegetable markets retailers (supermarkets, hypermarkets) consumers. 68.2% of 1 Professor, Department of Agricultural Marketing, National Chung-Hsing University, Taiwan 2 Associate Professor, Department of Agricultural Marketing, National Chung-Hsing University, Taiwan 3 Lecturer, Department of Agricultural Economics, Faculty of Agriculture Chiang Mai University, Thailand

3 254 Agribusiness Management towards Strengthening Agricultural Development and Trade vegetables in Taiwan are transacted in the wholesale vegetable markets as shown in Figure 2. Hence, we choose the wholesale vegetable market in Taichung city as an example to show the vegetable marketing system in the urban cities in Taiwan. In Chiang Mai, the main vegetable production information is in Table 1. And its channels are shown in Figure 3. So, Taichung city, the third largest city, in Taiwan and Chiang Mai city, the second largest city, in Thailand are the urban cities that we mentioned in the title of this paper. The contributions of the wholesale market are to gather agricultural goods, determine prices of agricultural goods and distribute agricultural goods (Shyu, 1984). Hence, the wholesale market is important to the marketing systems of the agricultural goods. Actually, the marketing systems are analyzed by the efficiency of the wholesale markets in this paper. So, what we will do in this paper is to introduce the wholesale markets in Taichung city and Chiang Mai city. Also, we hope Taiwan and Thailand can each get something from the other, based on the effect of benchmarking. The first wholesalers take the most important role in the market because about 80% of total products are in their hands. The marketing channels of vegetables is shown in the Figure 3 Suppliers Producers Intermediary Organizations (wholesale, retail, transportation, store, process, information, transmission, etc.) Government policy Consumers (markets) Figure 1 The Agricultural Marketing System In Taiwan

4 Wholesale Markets 47% Shippers Suppliers Wholesalers Buyers Jobbers Buyers Retailers, Supermarkets, Hypermarkets Consumers Farmers 53% Farmers' Association, Cooperative Association 40% 10% 68.2% 5% 92% 92% 3% Clients 8% Source: Xu, Wen-Fu, 1997 Figure 2 Vegetable Marketing Channels in Taiwan

5 256 Agribusiness Management towards Strengthening Agricultural Development and Trade Table 1 Planted Area and Yield of Some Vegetables Grown in Chiang Mai in 1999 Name Planted area Harvested area Average yield Total Production (rais) (rais) (kg/rai) (tons) Garlic 51,426 51,191 2, ,546 Cabbage 30,607 29,455 3, ,127 Shallot 20,783 19,009 2,667 50,705 Onion 18,012 13,961 2,919 40,759 Potato 14,725 14,675 1,795 26,335 Cauliflower 7,996 7,996 2,191 17,516 Chinese cabbage (white) 7,933 7,123 2,088 14,875 Chinese lettuce 4,853 4,853 1,822 8,841 Chinese cabbage (green) 2,443 2,443 2,505 6,119 Kale 1,884 1,884 1,506 2,837 Source : Chiang Mai Provincial Office of Agriculture,1999. Marketing channels of vegetables 50% 10% 40% Local assembler 30% First wholesaler 10% 40% 40% Wholesaler in BKK and others Second wholesaler 35% Retailer in Chiang Mai 40% Retailer in BKK and others 40% Consumer in BKK and others 5% Consumer in Chiang Mai 55% Source : Khadkaew,t Figure 3 The Marketing Channels of Vegetables in Muangmai Market

6 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand Literature Review Kohls and Uhl (1998) say that the vegetable marketing system has been influenced by a number of production, product and market characteristics: perishability, large price and quantity variations, seasonality, alternative product forms, bulkiness of product and geographic specialization of production. They also point out the characteristics of the wholesale vegetable market: taking long-distance shipments from shipping point firms, breaking them into smaller lots, and selling to food retail firms and the institutional away-fromhome market. The wholesale vegetable markets in Taiwan have the same characteristics. Rhodes and Dauve (1998) mention that the most visible and generally the most costly part of agricultural marketing are the physical functions: transportation, storage and processing. In our research, we will focus on discussing the transportation function in the wholesale vegetable market. Rhodes and Dauve (1998) also mention that the main contribution of farmer groups is to increase demand at farm level rather than to manipulate supplies. In Taiwan, the government encourages farmers to form farmer groups, naming the production and marketing groups, in order to increase their influences on prices in markets. Actually, the purposes of forming the production and marketing groups in Taiwan have the same goal as the farmer groups in the USA. Shyu (1992) introduces the Taipei fruit and vegetable wholesale market in the perspective of a managerial entity, facility, auction type, auction time, and operational procedure. The author also mentions that the main difficulty in running his wholesale market is that the ground space is not big enough. Liao (1999) forms marketing strategies for the GAP (Good Agricultural Practice) vegetables in Taiwan. That is, doing promotion in media, doing safety inspection intensely, improving the packaging design, building brand, etc.. Now, the percentage of vegetables with GAP marks in wholesale vegetable markets is small so far in Taiwan. But the strategies mentioned in the paper are good references in reality. Cai (1996) makes the following two suggestions for the vegetable industry in Taiwan. To implement the computer auction in each wholesale vegetable market and to build the vegetable distribution centers to obtain the economy of scale benefits. Actually, it is the government policy to implement computer auction in the wholesale vegetable markets in Taiwan. Hong (1996) points out that the cooperative societies in Taiwan apply cooperative marketing concepts, to transport vegetables to the wholesale vegetable markets. The benefits of doing this are that the efficiency of the wholesale vegetable market is increased and the farmers will save energy in transportation. Lee (1992) provides the following reasons to explain why the cooperative marketing is not the major way to sell agricultural products in Taiwan. The main reason is that agricultural groups do not consider

7 258 Agribusiness Management towards Strengthening Agricultural Development and Trade cooperative marketing seriously. Actually, the advantage of cooperative marketing is to save time for farmers because they do need to spend much time in transportation. Liao (1996) observes that direct marketing is getting popular in Taiwan because consumer income has increased during the past decades. Therefore, he uses the retail price as the index to determine how many kg of vegetables he needs to plant. Actually, the wholesale vegetable market should take this concept to determine how much kg of vegetable needs to be auctioned per day in the wholesale market in order to stabilize the prices of vegetables. 3. Introduction of Taichung City in Taiwan and Chiang Mai City in Thailand Taiwan is an island with 21 million people and 36, Km 2 (Kaohsiung city government, 1999; Bureau of Civil Affairs of Taipei city government,1999; Bureau of Civil Affairs of Taiwan Provincial government,1999). Taichung city has 970 thousand people and Km 2 (Bureau of Civil Affairs of Taiwan Provincial government,1999). Taichung city is located in the middle of Taiwan and it is the third largest city in Taiwan. The Mayor is selected by the citizens of the city. There is one harbor and two airports in the city. One is an army airport and the other is a commercial airport. Taichung city is famous for the tremendous number of small enterprises, the aviation industry and a highly competitive business environment. There are lots of supermarkets, hypermarkets, and hotels in this city. Therefore, it is not an easy job to gather and distribute vegetables efficiently in this business city. Currently, this heavy job is done by the Taichung wholesale vegetable market (we call it the Taichung market). The managerial entities of Taichung market are the city government (49% of investment) and the local Farmers Association (51% of investment). Chiang Mai is in the Upper North of Thailand. The topography and climate are suitable to grow tropical and temperate crops. In the lowlands, most of the planted area is irrigated. Farmers grow rice as a subsistence crop in the rainy season and grow many kinds of upland crops as cash crops in the dry season. Vegetables are grown all year round, longan and lichee are important fruit trees. In mountainous areas, many kinds of temperate fruit and vegetables are grown. In Thailand one of the serious agricultural problems is the marketing problem. The quantity and quality of products depends on weather conditions. Farmers take risk in price fluctuations. However, having a market place for the selling and buying of agricultural products is the way to improve and develop the marketing system and help farmers reduce risk. In Chiang Mai City, there are many wholesale and retail markets for agricultural products.

8 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand 259 Some markets belong to local government agencies, some are owned by private business, some are big and some are small. All the markets, however, take important roles in the marketing system in assembling and distributing agricultural products. Muangmai Market is one of the most important and biggest, wholesale markets in Chiang Mai City. It is the center for assembling vegetables from all production areas in Chiang Mai and distributes to consumers in the city and export to Bangkok and other provinces. At the same time, it is the center for assembling fruits from all production areas of the country and distribution to consumers in Chiang Mai and neighboring provinces. Muangmai Market was chosen to be a case study for the vegetable marketing system because there are many kinds of vegetables traded, many traders participate and many marketing activities are done in the market. 4. Comparison of Vegetable Marketing Systems in Taichung City in Taiwan and in Chiang Mai City in Thailand 4.1 Taichung Taichung market auctions vegetables and fruit. In order to gather information of the vegetable marketing systems in Taichung, we developed a questionnaire. The questionnaire contained two parts. The first part was the basic information of the wholesale vegetable market. The second part was to know the behavior of suppliers and buyers, and the way to determine prices in the wholesale vegetable market. The questionnaire was sent out in November, After one week, we had the results as shown in Table 2. From Table 2, we know that the number of employees in Taichung is 67 (=10+57) and Taichung wholesale vegetable market transacts 2,000 tons of vegetables every month on average. The prices of 320 (=2,000*16%) tons of vegetables are determined by computer, which we called computer auction. The prices of the rest of the vegetables are determined manually, which we called manual auction. There are 650 wholesalers registered in Taichung market and around 52% of them are regular wholesalers. The operational procedure of the auction in Taichung market is unloading vegetables from trucks, numbering and grading, moving vegetables to buffer space to wait for auctioning, auctioning (either computer or manually), moving vegetables to trucks and leaving. The vegetables are transported to Taichung market between noon to AM2:00 and the transaction time is from AM3:30 to AM5:30. This indicates that Taichung market is very busy in transactions to satisfy any level of customer needs. From Table 3, we know that there are 1,900 trucks (for vegetable and fruit both) in and out of Taichung market. Given the unloading time (14:00=AM2:00-12:00) and number of trucks (1900) in Taichung, we

9 260 Agribusiness Management towards Strengthening Agricultural Development and Trade can calculate the average number of trucks in and out Taichung market is 136 trucks/hour. What a busy market! From Table 4, we know that there are 300 wholesalers, 400 jobbers, 800 retailers, 20 processors to buy vegetables from Taichung market. As we can see from Table 4 and 5, 286 farmers (whose supply equals to 1% of vegetables auctioned in Taichung market), 10 production and marketing groups (1%), 30 Farmers Associations (6%), 40 cooperative societies (8%) supply their vegetables to Taichung market regularly. Actually, the top three types of suppliers are distributors (supply 40% of vegetables needed in Taichung market), shippers (28%) and the importers (15%). Now, the Taiwan government encourages farmers to form production and marketing groups in order to enlarge their influences on prices. Therefore, we do believe that the number of production and marketing groups will increase in a short time. From Table 6, we know that leaf vegetables, watermelons, weutan pomelos and leaf vegetables are the over-supply vegetables in spring, summer, fall and winter seasons respectively in Taichung market. The top three buyers in Taichung market are retailers (36%), wholesalers (30%) and jobbers (30%) as shown in Table 7. Table 2 Basic Information for the Wholesale Vegetable Market in Taiwan Items Taichung in Taiwan Number of tons of vegetable transacted per month (tons) 2,000 Number of meter squares 39,325 Number of staff 10 Number of operators 57 Number of wholesalers registered 650 Number of regular wholesalers 340 % of products is auctioned by computer 16 Beginning date for using computer auction 1997 Start and end time for transporting products to wholesale vegetable market* 12:00 and 02:00 Start and end time for transaction 03:30 and 05:30 Managerial fee** 4% Notes: * means that the start time is noon (12:00) and the end time is AM 2:00. ** means that the Taichung market charges 2% of auction price per transaction from the suppliers and 2% from buyers as the managerial fee.

10 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand 261 Table 3 Truck Information for Taichung Markets Numbers of trucks below 3.5m.t 5.4m.t--6.4m.t 6.4m.t--7.9m.t 7.9m.t--8.4m.t Above 10m.t (included) Taichung Table 4 Suppliers and Buyers Information for Taichung Market Buyers/ No Wholesaler Jobber Retailer Processor Others Number Suppliers/ No Farmers Production Farmers' Cooperative Others Marketing Group Association Society Number Table 5 Information for Each Supply Organization Supply Percentage of Vegetable in Taichung Supply Farmers Distributor Farmers' Shipper Importer Cooperative Production others org. association* Society* marketing group Percent 1% 40% 6% 28% 15% 8% 1% 1% Note: * means that they use cooperative marketing approach to supply vegetable to Taichung market Table 6 The over-supply agricultural products in four seasons in Taichung market Seasons agricultural products Spring Summer Autumn Winter (Jan.-March) (April-June) July-Sept.) (Oct. Dec.) Leaf vegetables Watermelons Weutan Pomelos Leaf vegetables Table 7 Buyer information buying percentage of vegetable in Taichung market Buyers Wholesaler Jobber Retailer Processor Organizations Others Percentage 30% 30% 36% 1% 2% 1%

11 262 Agribusiness Management towards Strengthening Agricultural Development and Trade 4.2 Chiang Mai General Characteristics of Agricultural Marketing in Chiang Mai: Agricultural products from all production areas are distriburted to consumers inside and outside of Chiang Mai by 3 main channels; (Chiang Mai Provincial Office of Commerce. 1998): 1) Farmers sell directly to wholesalers, retailers and consumers, most products are vegetables but few quantities of them were sold. 2) Local merchants or assemblers buy products at farms and sell to provincial assemblers, wholesalers and retailers to sell to consumers. 3) Provincial assemblers or wholesalers, with some of them having places in urban areas for assembling products, sell to Bangkok and other cities. Type of market 1) Retail market; these markets are situated in town or community. Many retailers offer consumption and non-consumption goods including fresh foods such as meat, fruits and vegetables. 2) Wholesale-retail market; Situated in town or community, good location and transportation. Many kinds of Agricultural products are sold by wholesalers and retailers. 3) Morning market: These markets are scattered in all urban areas. Consumption and non-consumption goods are sold by small retailers. Some small farmers bring their products to sell here, including products from forest and natural grown vegetables. The markets start very early in the morning and have few hours for trading. 4) Special Morning market: This market is developed from the morning market, but usually is held once a week. The main product traded is cattle. Now, this market is popular in rural areas and there are many kinds of consumption, non-consumption goods and agricultural products traded. 5) Assembling products spots; spots are scattered along the production areas, they belong to merchant middlemen for assembling products from farmers. Muangmai Market Basic Information Name: Muangmai Market Operator: Muangmai Market Co. ltd.

12 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand 263 Establish: 1987 Total Area: 15 rai (1acre = 2.5 rai) Building: 2 market places (Each 2,500 square meters) with 200 commercial building Officer & Worker: 20 persons Trader: 300 (50% is vegetable trader) Facility: parking area (1,600 square meters) : parking fee: pick up truck (2.5 ton), 20 baht/day : 6-wheel truck (7 ton), 40 baht/day : 10-wheel truck (10 ton), 60 baht/day : road 8 meters wide, 9 ways (in-out) : announcement service : wheel cart Operation Time: 24 hours : 2 a.m a.m. (time for transporting product into the market) Period of maximum product: end of October, November, December Period of minimum product: June, July Maximum quantity of product traded (rank in kinds) : Cabbage, : Chinese cabbage (white) : Kale, Spinach, Greenpea, Haricot bean, Garlic, Onion, Shallot, Chili, etc. Type of trader in Muangmai Market There are 4 traders in the market which are: 1) Local assemblers: They assemble products at farms and bring their products to sell to transport retailers and wholesalers by small trucks (Pick up car). They, sometimes bring their products directly to wholesalers in Bangkok by their trucks when there is excess supply or product prices are low. Most of the local assemblers in Muangmai market are farmers. 2) First wholesalers: They directly buy products from farmers or local assemblers and sell to second wholesalers and retailers but some who have big business sell to Bangkok and other cities. 3) Second wholesalers: They buy products from first wholesaler or local assemblers and sell to retailers or consumers but most of the products sell to consumers.

13 264 Agribusiness Management towards Strengthening Agricultural Development and Trade 4) Retailers: They buy products from local assemblers or wholesaler and sell to consumers. The marketing channel of vegetables in Chiang Mai: The planted area of vegetables grown in Chiang Mai province is 193,354 rai (1 hectare= 6.25 rai) or about 12% of the agricultural land holding. There are many kinds of vegetables grown in all districts. Historical background of Muangmai Market: Muangmai Market business has been run under the Muangmai Market Co. Ltd. (that is, operated by businessmen from Bangkok) since 1982 with a total area of about 15 rais. It was a formerly a theater named Muang-fa. It is located downtown, near the other two biggest wholesale-retail markets and close to a market which belongs to Chiang Mai Municipal Office. The company administrators improved this area to be a place for agricultural product trading, especially fruits and vegetables. They demolished the theater and built 2 market places, constructed commercial buildings for sale, roads and parking area. Muangmai Market, now, is the biggest wholesale-retail market for vegetables and fruits in Chiang Mai City. In the past few years, the administrators proposed a new idea to improve the market by constructing a new building to replace the old one at 1st Floor Level with a parking area at basement level and apartments for rent on the upper floors. This idea was introduced to the traders but most of them disagreed because they believed that having living areas above the trading area would make business decrease. Finally, this idea was given up, the administrators have stopped any improvement. Traders in Muangmai Market Muangmai Market has two buildings for market places, one is divided into small spaces about 10 meters square to rent. Some traders rent daily, weekly or monthly, but most of them rent weekly and a few rent yearly. The other building is divided into small a booth for daily trading fresh meat (pork, beef, chicken, fish and seafood). There are about 200 units of commercial buildings, which are places for trading and living. There are about 300 traders in Muangmai Market, about half of them are vegetable traders, 2 first wholesalers, 10 second wholesalers, 150 retailers). Close to Muangmai market is Chiang Mai Municipal office market which allows about 30 local assemblers to bring their products to sell here, and small retailers sell their products on the footpaths and roadsides that make this area the most busy trading area for fruits and vegetables in Chiang Mai City.

14 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand 265 Market facilities Muangmai Market provides some facilities for sellers and buyers. A parking area for trucks, 4 Security Guards, 5 Cleaning workers, Announcement Tower, and wheel carts for carrying products inside the market (belong to individuals). The above facilities are not enough to make traders more comfortable, and are not effective in increasing marketing efficiency. From interview, the traders need credit, money clearing, transportation, large scale weighing machines and cool storage services. Trading of vegetables in the market: Physical handling Many kinds of vegetables are grown in a short period (4-8 weeks) and gradually harvested everyday. The kinds of vegetable and quantity harvested are determined by customer orders. After harvesting, cleaning and grading are needed, then sending to customers. Wholesalers receive very simple cleaning and grading, because they have to send their products as fast as possible to reduce damage and weight loss but retailers need grading for setting prices. Many kinds of vegetable are not of the same standard, product prices vary but can be bargained, however, some wholesalers try to keep their customers by giving some discounts, or selling by credit, or pay for transportation costs, if the customers have no trucks. Volume of trading The trading volume depends on climate conditions and customer orders. In the rainy season (June-October), some products are damaged by heavy rain, the prices increase while demand decreases, because they are substituted by naturally grown vegetables with lower prices. In cool dry season (November-February), the climate is suitable for many kinds of vegetables, production increases while the price is lower. In the hot dry season (March-May), some planted areas lack water, production decreases while the prices are higher. Some wholesalers have to be sure they have products in their hands. They sign contracts with local assemblers or farmers to supply products to them by paying money in advance or giving credit both in cash and kind, i.e., fertilizer, seed and plant chemical, etc.. From this point of view, it may be a barrier for new or small wholesalers to enter into the market.

15 266 Agribusiness Management towards Strengthening Agricultural Development and Trade Price determination Theoretically, price is determined by demand and supply. In Muangmai Market prices are determined by buyers and sellers through negotiation. The study found that the wholesalers have the most powerful voice in determining the prices of vegetables. However, product pricing depends on market situation, quality of products and marketing costs of wholesalers. In the cool dry season, the weight loss is less than in the rainy season and hot dry season, while a large amount of products come into the market. In this period, the marketing costs of wholesalers are lower than the other two periods, and the product prices are lower too. In Muangmai Market, the wholesalers try to set the same price levels or small differences and they keep their customers by different services. Business Experiences It is important for wholesalers to have experience in their business. From interview, some wholesalers who succeed in their business took about 5-10 years. Due to a lack of marketing information about product quantities which rapidly changes all the year, they need time to learn and get experience and to increase efficiency in their business. This may be one type of a barrier for newcomers to enter into the market. Generally, the wholesalers do their business with mainly 2-3 kinds of vegetables, with other kinds in smaller quantities. This is, because they want to be known as a specialist in their main crops, it is a way to avoid competition in the market, and to have specific customers Future Prospects The market administrators want to keep the status of Muangmai Market as a traditional local market for local people. They don t want to transform it into a modern market with good facilities and instruments, but everyone has to pay more expense. Constructing commercial buildings for big wholesalers, while inducing small retailers to enter the market are the future plans while fixing all fees or expenses for all traders. For trader opinion, most of them are satisfied with their business scales, which are rather efficient. To increase business volume may encounter high competition and decrease efficiency. Product standardization is most important, and chemical free vegetables for a better quality of life is really needed in the future. However, both traders and administrators agree that keeping all benefits for local people are their goals.

16 The Comparison of Vegetable Marketing Systems of Urban Cities in Taiwan and Thailand Summary and Conclusion The functions of the wholesale vegetable market are to gather, auction and distribute vegetables. Therefore, the wholesale vegetable market is important to the vegetable marketing system. In this paper, we designed a questionnaire to collect data related to the wholesale vegetable market in Taiwan and Thailand. Urban cities are the research objects in this research. From the results of the questionnaire, we know the differences in the vegetable marketing systems in urban cities of Taiwan and Thailand. We do believe that each country can obtain something from the other by the concept of benchmarketing. Physical characteristics of vegetable is one of the key factors to improve the marketing system. To bring products from the production area to consumers efficiently, needs more facilities and laborers who do marketing functions. To study vegetable marketing systems, it suffices not only to emphasize market structures and channels of distribution, but to investigate marketing behavior, and performance of traders and related persons. From the study, we found that traders do not want to encounter each other. They have their own strategies to make some differentiation in products and services including making contracts to guarantee their business, and creating loyalty to permanent customers is very important. For the market operations, the market owner provides facilities, but does not take a role in increasing marketing efficiency and improving marketing systems. One way to improve the marketing system is using an auction system, but this may not work for vegetables due to lack of supporting factors such as scale of business, product standardization, growers cooperation and market information. Improving marketing systems of vegetables in Chiang Mai city is partly dependant on the socio-economic and cultural constraints of local people. However, everyone who relates to the marketing systems of vegetables in Chiang Mai tries to do the best for consumers. References Bureau of Civil Affairs of Taipei city government, 1999, (Online). Available: [1999/11/15] Bureau of Civil Affairs of Taiwan Provincial government, 1999, (Online). Available: [1999/11/15] Cai, Y. X., 1996, The Experience and Development of Vegetables Direct Marketing.

17 268 Agribusiness Management towards Strengthening Agricultural Development and Trade Proceedings of Agricultural Strategic Alliances, National Chung Hsing University. Chiang Mai Provincial Agricultre Office, 2000, Agricultural Statistics of Agriculture in Chiang Mai Chiang Mai. Chiang Mai Provincial Commerce Office, 1998, Marketing Information of Chiang Mai Province Chiang Mai. Hong, Z. C., 1996, The Present and Development of Production and Marketing for Agricultural Cooperative Associations. National Chung Hsing University. Kaohsiung city government, 1999, (Online) Available: [1999/11/5] Khadkaew, T., 1999, Wholesale Market Structure of Vetetables in Chiang Mai. Special Problem. Department of Agricultural Economics,Chiang Mai University, Chiang Mai Kohls' R. L. and N. U. Joseph, 1998, Marketing of Agricultural Product, Prentice Hall. Li, J. L., 1992, The Past, Present and Future of Taiwan s Agricultural Product Common Marketing. Proceeding of How to Strengthen the Relational of Common Marketing and Wholesale Markets, Department of Agricultural Marketing, National Chung Hsing University. Liao, Z. C., 1996, The Experience and Development of Vegetables Direct Marketing Strategies. Proceedings of Agricultural Strategic Alliances, National Chung Hsing University. Rhodes, V. J. and J. L. Dauve, 1998, The Agricultural Marketing System. Holcomb Hathaway publishers. Shyu, R. M., 1984, The Study of How to Enhance the Functions of Wholesale Vegetable And Fruit Markets. Agricultural Finance Review 11: Shyu, Y. F., 1992, The Working Experience of Taipei Agricultural Product and Marketing Company Vegetables Wholesale Market. Proceeding of How to Strengthen the Relational of Common Marketing and Wholesale Markets, Department of Agricultural Marketing, National Chung Hsing University. Xu, W. F., 1997, Agricultural Marketing, Chang Chung Bookstore..