rural management (3)

8/3/2019 Rural Management (3)

http://slidepdf.com/reader/full/rural-management-3 1/18

Agriculture Output Marketing Concept of agri-business

Components of agri-business

Concept of agriculture marketing in thechanging agri-business scenario

Prof. Rushen Chahal



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.

Prof. Rushen Chahal



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

Prof. Rushen Chahal



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

Prof. Rushen Chahal



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

Prof. Rushen Chahal



Agri-business System

AG. INPUT

SUB-SYSTEM

AG. PRODUCTION

SUB-SYSTEM

AG. MARKETING &

PROCESSING SUB-SYSTEM

Prof. Rushen Chahal



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



Ag. Production Sub-system

Crop planning

Maximize production

Maximize input use efficiency

Food security

Employment

Sustainability of natural resourcesProf. Rushen Chahal



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



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

Prof. Rushen Chahal




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

Prof. Rushen Chahal




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

Prof. Rushen Chahal



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

Prof. Rushen Chahal



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?

Prof. Rushen Chahal



Concept of Marketing Marketing is management decisions

making.

- it is neither mechanical nor anautomatic operation

Prof. Rushen Chahal



Farm Marketing Decisions Delivery Alternatives

- local market - commission agent at farm

- regulated market

- processing plant - international market

Prof. Rushen Chahal



Farm Marketing Decisions Storage alternative

- on farm storage

- commercial facility

- government facility

Product alternative

- raw product - processed products

- branded products

Prof. Rushen Chahal



Farm Marketing Decisions Pricing alternatives

- cash sale

- forward contract

- as on sale basis

- contracting

Mode of marketing- individual

- cooperative

Prof. Rushen Chahal

rural management (3)

Documents