The farm gate value of a cultivated product in
agriculture and
aquaculture
Aquaculture (less commonly spelled aquiculture), also known as aquafarming, is the controlled cultivation ("farming") of aquatic organisms such as fish, crustaceans, mollusks, algae and other organisms of value such as aquatic plants (e.g. lot ...
is the
market value
Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or ''fair market value'', although the ...
of a product minus the selling costs (transport costs, marketing costs).
The market value is not the same as the price farmers get for their product, as (if an
auction is used), the value they get per weight may be well below the market price. In some cases, the value they get per weight may even be below the
breakeven price.
When selling by auction, the price the farmers get for their product is typically lower than the price they get if they sell directly to the consumer (as they are able to set this price themselves).
Farms that Sell Directly to Consumers May Stay in Business Longer
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The farm gate value is also far lower than the retail price consumers pay in a store as it does not include the additional costs the store makes (shipping, handling, storage, marketing) nor the profit margin the involved companies ask.
References
Definition according to the OECD Glossary of Statistical Terms
Agricultural economics
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