Agriculture Marketing as a part of Agri-business - PowerPoint PPT Presentation

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Agriculture Marketing as a part of Agri-business

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Title: 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
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