Agriculture Marketing as a part of Agri-business

1
Agriculture Marketing as a part of Agri-business

• Concept of agri-business
• Components of agri-business
• Agri-business in India issues
• Concept of agriculture marketing in the changing
  agri-business scenario

2
Concept of Agri-business

• Agri-business can be defined as commercialization
  of agriculture, which refers to market
  orientation of agricultural production process.
• Transition from subsistence to commercial
  agriculture.
• From production oriented approach to market
  oriented approach

3
Agribusiness Change in Focus

• Produce and sell homogenous commodities
• - Produce specific attributes and differentiated
  products
• Emphasis on tradition in agriculture
• - Emphasis on innovations
• Emphasis on technical skills
• - Emphasis on managerial skills
• Food security is primary concern for production
• - Production is diversified as per market demand
  

4
Agribusiness Change in Focus

• Marketing is organized in centrally planned
  economy
• - Marketing is conducted in market economy
• Increased role of government to protect the
  farmers
• - partnership web between farmers, corporate
  business and government
• Low income low risk for farmers
• - High income high risk for farmers

5
Agri-business System
AG. MARKETING PROCESSING SUB-SYSTEM
AG. PRODUCTION SUB-SYSTEM
AG. INPUT SUB-SYSTEM
6
Agriculture Input sub-system

• Innovation of new technology
• Availability of inputs to farmers
• in proper quantity
• of good quality
• at appropriate time
• at appropriate cost
• Extension
• approach
• institutions

7
Agriculture Production sub-system

• Crop planning
• Maximize production
• Maximize input use efficiency
• Food security
• Employment generation
• Sustainability of natural resources

8
Agriculture Marketing Processing sub-system

• Identifying the market
• Proper return to farmer
• Higher consumer satisfaction
• Appropriate market channel
• Low marketing cost
• Higher market efficiency
• Low wastage
• Increase value addition

9
Agri-business Current Status and Issues

• The food chain in India from the farmer to the
  consumer involves several intermediaries leading
  to handling at multiple points and longer transit
  time.
• It is estimated that 20 of the food produced in
  India is wasted. This is valued at Rs 50,000
  crores approximately.

10
Agri-business Current Status and Issues

• This wastage is equal to the amount that the
  government spends on food subsidy by more than
  six times.
• Only 25 of the consumers rupees reaches the
  farmer as compared to 50 in developed countries.

11
Agri-business Current Status and Issues

• India produce a wide range of fruits and
  vegetables of both the topical and temperate
  varieties because of the varied climatic
  conditions in our country.
• Unfortunately, less than 2 of our produce is
  processed as against 30 in Thailand, 70 in
  Brazil, 78 in Philippines and 80 in Malaysia.

12
Agri-business Current Status and Issues

• The wastage is estimated as high as over 25 of
  the total production of fruits and vegetables.
• The cold chain system is primitive and under
  developed.
• The existing capacity of 1 million tonnes is
  primarily used for storage of potatoes.

13
Agri-business Current Status and Issues

• The current method of forecasting of agricultural
  produce does not provide for any time to take
  corrective action in terms of crop failure or
  surplus.
• There is need to develop efficient market
  information system.

14
Concept of Marketing

• Performance of all business activities involved
  in the flow of agricultural products from the
  point of initial agricultural production until
  they are in the hands of consumers

15
Concept of Marketing

• It does not limit marketing to all non-farm
  activities in the food industry
• - Marketing begins with production decisions on
  the farm itself
• - no isolation between production and marketing
• - Can farm gate become dividing line between
  farming and marketing?

16
Concept of Marketing

• A mutual interdependence between farmers and
  middlemen
• - competitive or complementary relationship
  between two parties?
• Marketing is management decision making
• - it is neither mechanical nor an automatic
  operation

17
Agriculture Marketing Alternatives

• Delivery Alternatives
• - local market
• - commission agent at farm
• - regulated market
• - processing plant
• - international market

18
Agriculture Marketing Alternatives

• Storage alternative
• - on farm storage
• - commercial facility
• - government facility
• Product alternative
• - raw product
• - processed products
• - branded products

19
Agriculture Marketing Alternatives

• Pricing alternatives
• - cash sale
• - forward contract
• - as on sale basis
• - contracting
• Mode of marketing
• - individual
• - cooperative

20
Concept of Marketing

• Marketing is a value added process
• - It adds form utility
• - It adds place utility
• - It adds time utility
• - It adds possession utility

21
Alternate Business Philosophies

• Production Orientation
• Focus Exploitation of technical capability
• (maize grows well here so we grow maize)
• Objective Profits through supplying to markets
  where task is one of allocating supplies between
  different markets

22
Alternate Business Philosophies

• Selling orientation
• Focus Promoting the consumption of the product
  that you are able to produce
• (Let us sell as much of the maize as possible)
• Objective Profits through persuading the people
  that what you have is what they really want

23
Alternate Business Philosophies

• Marketing orientation
• Focus Identifying wants and needs of the
  consumers and matching those with your resources
• (Income has risen and people want more
  vegetables, so let us diversify)
• Objective Profits through provision of customer
  satisfaction by meeting their needs and wants