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 Agriculture Output Marketing Concept of agri-business

Components of agri-business

Concept of agriculture marketing in thechanging agri-business scenario

Prof. Rushen Chahal

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Concept of Agri-business

 Agri-business can be defined as

commercialization of agriculture, which refersto market orientation of agriculturalproduction process.

Transition from subsistence to commercialagriculture.

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Concept of Agri-business

Commercialization of agriculture can take in

to two forms:

- Product commercialization which can occuron the output front 

- Factor commercialization which can occuron the input side

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 Agri-business: shift 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

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 Agri-business: shift 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, corporatebusiness and government 

Low income low risk for farmers

- High income high risk for farmers

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 Agri-business System

AG. INPUT

SUB-SYSTEM

AG. PRODUCTION

SUB-SYSTEM

AG. MARKETING &

PROCESSING SUB-SYSTEM

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 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 Prof. Rushen Chahal

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 Ag. Production Sub-system

Crop planning

Maximize production

Maximize input use efficiency

Food security

Employment

Sustainability of natural resourcesProf. Rushen Chahal

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 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 additionProf. Rushen Chahal

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 Alternate Business Philosophies

Production Orientation:

Focus: Exploitation of technical capability(maize grows well here so we grow

maize)

Objective: Profits through supplying tomarkets where task is one of allocatingsupplies between different markets

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 Alternate Business Philosophies

Selling orientation:

Focus: Promoting the consumption of theproduct that you are able to produce

(Let us sell as much of the maize aspossible)

Objective: Profits through persuading thepeople that what you have is what theyreally want 

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 Alternate Business Philosophies

Marketing orientation:

Focus: Identifying wants and needs of the

consumers and matching those with yourresources

(Income has risen and people want more

vegetables, so let us diversify)Objective: Profits through provision of customersatisfaction by meeting their needs and wants

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Concept of Marketing

 Performance of all business activitiesinvolved in the flow of agriculturalproducts from the point of initialagricultural production until they are in

the hands of consumers

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Concept of Marketing Marketing does not limit to all non-farm

activities in the marketing system

- Marketing begins with productiondecisions on the farm itself 

- no isolation between production and

marketing- Can farm gate become dividing linebetween farming and marketing?

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Concept of Marketing Marketing is management decisions

making.

- it is neither mechanical nor anautomatic operation

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Farm Marketing Decisions Delivery Alternatives

- local market - commission agent at farm

- regulated market 

- processing plant - international market 

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Farm Marketing Decisions Storage alternative

- on farm storage

- commercial facility

- government facility

Product alternative

- raw product - processed products

- branded products

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Farm Marketing Decisions Pricing alternatives

- cash sale

- forward contract 

- as on sale basis

- contracting

Mode of marketing- individual

- cooperative

Prof. Rushen Chahal