MARKETING OF AGRICULTURAL PRODUCT SUbMITTED by: AShUTOSh&ANIL SUbMITTED TO: MbA (bE), bATCh(2011-13) PROF. MUKESh RANGAINSTITUTE OF bUSINESS MANAGEMENT, C. S. J. M.UNIVERSITy KANPUR
AGRICULTURAL MARKETING Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing, distribution, advertising and sale. Some definitions would even include “the acts of buying supplies, renting equipment, (and) paying labor", arguing that marketing is everything a business does. Such activities cannot take place without the exchange of information and are often heavily dependent on the availability of suitable finance.
The agro Industry is broadly categorizedin the following types: (i) Village Industries owned and run by rural households with very little capital investment and a high level of manual labour; products include pickles, papad, etc. (ii) Small scale industry characterized by medium investment and semi-automation; products include edible oil, rice mills, etc. (iii) Large scale industry involving large investment and a high level of automation; products include sugar, jute, cotton mills, etc
MARKETING OF AGRICULTURALPRODUCTSThere are two important aspects to the marketing of agricultural products. Thefirst has to do with thephysical process that brings products from producers to consumers; thefundamental stages of thisprocess are the collection, packaging, transport, processing, storage and lastlythe retail sale ofagricultural products. This first aspect shall be dealt with in detail in the factsheet on post-harvestmanagement. The second aspect, which is addressed here, involves the marketpricing mechanism.Emphasis will therefore be placed on the market mechanisms that contribute tothe pricing ofagricultural products and on the way that producers can obtain acceptableprices for their crops.
AGRICULTURE MARKETING The bridge that links producer & consumer
WhAT IS MARKETING? The process of determining the needs and wants of consumers & being able to satisfy those needs & wants Marketing includes all of the activities necessary to move a product from the producer to the consumer
WhAT IS A MARKET? Buyers SellersAgricultural Marketing Training Program
WhAT IS A MARKET? • A market is made up of buyers & sellers • Buyers are people who need or want a product or service and have the money to buy it • A market must also have sellers who are willing & able to produce goods & services for saleAgricultural Marketing Training Program
Two Types of Markets Input market Product market – The input market includes – This is the market where items like metal, fertilizer, final products are sold to seed & wood consumers – These types of products – Eggs and potatoes from are purchased by farms producers – Shoes from shoe storesAgricultural Marketing Training Program
Types of Agricultural Markets Input markets Product marketsAgricultural Marketing Training Program
CLASSIFICATION OF AGRICULTURALPRODUCTS Food grain items Oilseed produce Horticulture produce Fiber products Beverage items Cash items Animal produce
Process Of Sale Functionaries at mandi level Important functionaries at Mandi level are: a) Arthatias; b) Brokers; and c) Co-operative Marketing Societies. a) Arhatias The most Important functionary to be found in bid mandis are ‘Arhatias’ who include both buyers on commission and outright buyers. Broadly speaking, the Arhatias can be grouped under two heads, viz., Kuchha Arhatias and Pucca Arhatias.
Process Of Sale i) Kuchha Arhatias: They are small commission agents. Their sphere of activity is purely local and they act mainly as middlemen or an intermediary between the primary producer or seller and the buyer in the large wholesale market. Such a person seldom buys on his own account. His main business is to establish contact between producer-seller and the buyer in the assembling market. He also advances money to the cultivators and village banias on the condition that the produce will be disposed of through him alone and hence, changes a very nominal rate of interest on the money advanced.
Process Of Sale ii) Pucca Arhatias: They are generally big firms of some substance and they mostly deal in grains, oil-seeds, and other agricultural products either as agents or act on their own account. They also help in assembling of the farm products by financing the operations of the ‘Kuchha- Arhatias’ and small traders. b) Dalal (Brokers) Their main function is to bring buyers and sellers together. They differ from the Arhatias in the sense that they have no fixed business of their own. They charge commission from the buyers and the sellers. c) Co-operative Marketing Societies These have been established under the integrated Rural Credit and Marketing Scheme initiated under the Second Five-year Plan. The main function of these societies is to sell the produce of their members. They also undertake outright purchases, provide storage facilities for storage and grading, and thus save cultivators from exploitation by traders, and help the farmers in securing a fair price for their produce.