Agricultural, Allied Products, Agro Processed Products, its status in Indian Market. Emerging Issues in the business Agriculture Produces. Agriculture Marketing: Concept, Definition, Scope and Objectives, Upcoming Practices in Agriculture Marketing. Agribusiness-Emerging Branches, Non Conventional Forms of Agribusiness, Retailing & Merchandising of Agri Produces, Export Potential for farm products-Supporting Services. Role of Agencies for promotion of Exports of Agri Products, Role of Agencies for marketing of Agri Products, Standards of Agriculture Produces, Organized Retailing in Agri Inputs and Outputs. Marketing Mix of Agriculture Products, Role of Information and Communication Technology in Agriculture Marketing.

1. EMERGING ISSUES IN THE
BUSINESS OF AGRICULTURE
PRODUCES
(UNIT-1/4)

2. COVERAGE
MEANING OF AGRIBUSINESS
NEED FOR AGRIBUSINESS MODE
SIZE OF INDIAN AGRIBUSINESS
EMERGING AREAS OF AGRIBUSINESS
AGRIBUSINESS OPPORTUNITIES
INDIA’S RETAIL SECTOR
CONTRACT FARMING
RECENT INITIATIVES
EMERGING ISSUES OF AGRIBUSINESS
CONCERNS
RETAIL SECTOR ISSUES
ENTRY OF GLOBAL AGRIBUSINESS FIRMS

3. MEANING OF AGRIBUSINESS..
IN DEVELOPED COUNTRIES
Defined as the total output arising from
farm production and product processing at
both pre- and post-farm gate levels
IN DEVELOPING COUNTRIES
Agribusiness sector encompasses four
distinct sub-sectors, viz. agricultural
inputs; agricultural production; agro-
processing; and marketing and trade

4. MEANING OF AGRIBUSINESS
Defined as science and practice of activities,
with backward and forward linkages, related
to production, processing, marketing, trade,
and distribution of raw and processed food,
feed and fibre, including supply of inputs
and services for these activities
Agribusiness is emerging as a specialized
branch of knowledge in the field of
management sciences

5. NEED FOR AGRIBUSINESS MODE..
LARGE AND CONTINUOUSLY EXPANDING
MARKET SIZE BUT INADEQUATE MARKETING
SYSTEM
PRIVATE TRADE (80% OF MARKETED SURPLUS)
INVESTING LITTLE IN AGRI-INFRASTRUCTURE DUE
TO EXECESSIVE REGULATORY FRAMEWORK
DOMINANCE OF UNORGANIZED SECTOR
INCREASED DEMAND FOR VALUE-ADDED
SERVICES
GEOGRAPHIC EXPANSION OF MARKET BUT
INADEQUATE RURAL INFRASTRUCTURE

6. NEED FOR AGRIBUSINESS MODE..
DIRECT MARKETING FROM FARMERS TO
CONSUMERS NEGLIGIBLE
85% OF RURAL PERIODIC MARKETS HAVE
ABSENCE OF EFFICIENT TRADE
INADEQUATE, ILLEQUIPPED AND MISMANAGED
MARKET YARDS AND SUB-YARDS
HIGH MULTIPLIER EFFECT AND EMPLOYMENT
POTENTIAL IN FOOD PROCESSING INDUSTRY
HEAVY LOSSES DUE TO LACK OF PROPER
HANDLING – CLEANING, SORTING, GRADING AND
PACKAGING

7. NEED FOR AGRIBUSINESS MODE..
30% OF FRUITS AND VEGETABLES AND 10% OF SEEDS
AND SPICES ARE LOST BEFORE REACHING THE MARKET
HUGE LOSSES IN THE MARKETING CHAIN DUE TO
POORLY DEVELOPED MARKETING INFRASTRUCTURE
(AROUND RS. 50,000 CRORES ANNUALLY)
APMR LEGISLATIONS HAMPERING CONTRACT
FARMING OTHERWISE VERY EFFICIENT IN LINKAGING
FARMERS WITH MARKETS
FARMERS SHIFTING TO HIGHER VALUE CROPS FACE
RISK DUE TO FLUCTUATION IN YIELD, PRICE, AND
INCOME

8. NEED FOR AGRIBUSINESS MODE
By increasing the incomes of farmers
Saving the national loss of farm products
along the traditional supply chain
By creating more employment opportunities
Sound development of agribusiness
provides a new frontier by creating an
environment of much needed investment in
agricultural marketing and trade

9. SIZE OF INDIAN AGRIBUSINESS..
Value of agricultural products
marketed at the first point of sale
was Rs 5053 billion which included
Rs 3323 billion of crop products Rs
1387 billion of livestock products
and Rs 343 billion of fisheries
products

10. SIZE OF INDIAN AGRIBUSINESS..
Value of farm inputs marketed was Rs
727 billion which included
seeds, fertilizers,
pesticides/insecticides, repair and
maintenance services, livestock
feed/fodder, organic manure, and
electricity/diesel

11. SIZE OF INDIAN AGRIBUSINESS..
Value of agro-processed products was Rs
4169 billion
in which Rs 2960 billion was from
registered manufacturing units and
Rs 1209 billion from unregistered
manufacturing establishments
These included
processed dairy products, meat and fish,
fruits and vegetables, edible oils, grain
milling products, beverages, tobacco and
leather products

12. SIZE OF INDIAN AGRIBUSINESS..
Total value of agribusiness was at
Rs 9949 billion
(primary agricultural products,
farm inputs and processed
products)

13. SIZE OF INDIAN AGRIBUSINESS..
value addition from trade and hotels
and restaurant activities (GDP) has
been estimated as Rs 4178 billion and
Rs 416 billion, respectively. If atleast 20
per cent of value addition in trade is
considered on agriculture related-
products (and 100 per cent in hotels
and restaurants), these activities are
worth Rs 1251 billion

14. SIZE OF INDIAN AGRIBUSINESS..
Agribusiness also includes trade and
sales of imported agricultural products.
Total value of imported agricultural or
processed products was Rs 228 billion,
which included Rs 111 billion worth of
edible oils

15. SIZE OF INDIAN AGRIBUSINESS..
Total Indian
agribusiness is worth
atleast Rs 11.43 trillion
or Rs 11,43,000 crores

16. SIZE OF INDIAN AGRIBUSINESS..
(STRUCTURE OF AGRIBUSINESS)
The primary producing units are around
121 million operational holdings, of which
63 per cent (76 million) are of less than one
hectare in operating size, on an average,
0.4 hectare of land.
Assembling of farm products from such a
large number of small production units is a
huge task.

17. SIZE OF INDIAN AGRIBUSINESS..
(STRUCTURE OF AGRIBUSINESS)
There are around 5 million wholesale
traders and 11.2 million retailers of
agricultural and other commodities. Out
of 11.2 million retail outlets, 3.7 million
are estimated to be food retail outlets

18. SIZE OF INDIAN AGRIBUSINESS..
(STRUCTURE OF AGRIBUSINESS)
There are 17.0 million units in the unorganized
sector, of which 13.91 million are agro-based.
Out of 13.91 million agro-industrial units in the
unorganized sector, 12.32 million are own
account manufacturing establishments (OAME),
1.2 million are non-directory manufacturing
establishments (NDME) and 0.39 million are
directory manufacturing establishments (DME)

19. SIZE OF INDIAN AGRIBUSINESS..
(STRUCTURE OF AGRIBUSINESS)
There are 5.11 million food processing units
in the unorganized sector, of which 4.62
million are OAMEs, 0.36 million are NDMEs
and 0.13 million are DMEs

20. SIZE OF INDIAN AGRIBUSINESS..
(STRUCTURE OF AGRIBUSINESS)
ORGANIZED SECTOR
There are 35,000 modern rice mills, 20,000 pulse
mills, 5198 fruit and vegetable processing units,
and 400 fish processing units. There are 426
sugar mills, and 3619 ginning and pressing units

21. SIZE OF INDIAN AGRIBUSINESS
(STRUCTURE OF AGRIBUSINESS)
Indian food market comprises 10 per cent processed
segment, 15 per cent semi-processed segment and 75 per
cent as fresh food segment. Processing is reported to be
around 2 per cent in fruits and vegetables, 37 per cent in
milk, 21 per cent in meat, 6 per cent in poultry and 11 per
cent in marine fish.
The overall value addition in food products, which is
currently 8 per cent, is likely to increase to 35 per cent by
2025

22. EMERGING AREAS OF
AGRIBUSINESS
AGRIBUSINESS OPPORTUNITIES
INDIA’S RETAIL SECTOR
CONTRACT FARMING
RECENT INITIATIVES

23. AGRIBUSINESS OPPRTUNITIES
Production
• Production of high-yielding seeds
• Production of high-quality planting material,
including use of tissue culture methods of
micro-propagation
• Nurseries, including hardening nurseries
• Organic farming
• Production of microbial cultures and vermi-
compost
• Floriculture

24. AGRIBUSINESS OPPRTUNITIES..
Processing
• Fruit and vegetable processing, including dehydration, canning,
aseptic packaging, processing of underutilized fruits, and
processing for other products like grape raisin, osmo air-dried
fruits, fruit toffee, bleached dry ginger and spices’ powders
• Processing of maize for starch and feed through improved mini/
small mills and dry milling plants
• Processing of millets for various purposes, including malt from
finger millets and RTE (Ready-to-Eat) products
• Processing of sugarcane for various jaggery products like spiced
jaggery, powdered jaggery, and jaggery cubes
• Processing of herbal and medicinal plants
• Processing of dairy products
• Processing for poultry products, including poultry dressing, and
• Processing of livestock products and livestock wastes

25. AGRIBUSINESS OPPRTUNITIES..
Infrastructure
• Cool chain infrastructure, including
cold stores
• Storage and warehousing
• Specialized transport services
• Packaging infrastructure, including
pack houses, and
• Agri-clinics and service centres

26. AGRIBUSINESS OPPRTUNITIES..
Trade and Others
• Procurement through contract
arrangements, including contract farming
• Retailing
• Supply chain management, and
• Capacity building, including human
resource development in agribusiness

27. INDIA’S RETAIL SECTOR
Existing rate of growth is increasingly
attracting the attention of corporates, both
domestic and foreign
Organized retailing constitutes only 2 per
cent of the total retail sales
Huge employment potential in food retail
sector
Scope for hyper markets, super markets,
super centres, warehouse clubs, discount
stores, convenience stores and pop and
mom stores

28. CONTRACT FARMING
Advance contract between the
farmer and buyer is an important
pathway for minimizing farmers’
marketing risks and increasing
their incomes

29. RECENT INTIATIVES
Several marketing-related restrictions
have been withdrawn or replaced
APMR to facilitate setting up of private
markets, direct purchases of farmers’
produce and contract farming
arrangements
Several monetary concessions have
been announced by the central and state
governments
Set up several agri export zones (AEZs)

30. EMERGING ISSUES OF
AGRIBUSINESS
CONCERNS
RETAIL SECTOR ISSUES
ENTRY OF GLOBAL AGRIBUSINESS
FIRMS

31. CONCERNS..
Paradigm shift in functioning of agricultural
systems
Improvement in the existing marketing
system that
Reduces cost by saving the losses in
marketing chain
Increases competition thereby reduces
undue profits by some intermediaries
Creates additional employment
opportunities

32. CONCERNS
Creating more lucrative and attractive
jobs for the youths in agribusiness
activities
Implications for growth, poverty and
food security
Possibility of spacing out small traders,
processors and retailers by virtue of
capital and scale of operations by big
business houses
Expansion of organized retail segment

33. RETAIL SECTOR ISSUES..
Entry of organized sector in retail business
brings more investment, creates more jobs but
displaces self-employed people
Choice between high profile jobs and
microscopically small one person or one family
enterprises
Lower price, better service and shopping
comfort to high-end and also middle and
lower-middle class consumers from organized
retail sector v/s existing unorganized retailing
service

34. RETAIL SECTOR ISSUES..
Fears of partial displacement of
existing informal retail outlets
Change in market structure to
monopolistic one leading to more
imperfections in the market than the
existing one
Protests from existing traders and
vendors against emerging modern retail
outlets

35. RETAIL SECTOR ISSUES..
Corporates buy directly from farmers thus saving
transaction costs and hence selling at lower prices
and still benefitting farmers but not marginal
farmers and small traders
Large and diverse Indian economy with
antediluvian distribution system for the basic
commodities of daily needs and entry of large
business houses to prove boon for following sections
of society but for the ongoing protests against their
attempt to modernize retail business in agriculture
sector forcing the large and diversified business
houses to roll out their ambitious plans for this
sector

36. RETAIL SECTOR ISSUES
Millions of middle and lower income Indians who
would have potentially benefited from the
competition and efficiency induced lower prices,
better quality, superior service and shopping
comfort
Millions of farmers who would be constrained to
continue to sell to the middlemen that have no
qualms in creating scarcity when it suits them, only
to raise the final price for the consumers, even as
the farmers continue to receive low prices
Millions of average men and women who could
have found better jobs - sales and supply chain
State governments who would have otherwise
gained from better tax compliance at the retail end

37. ENTRY OF GLOBAL AGRIBUSINESS FIRMS..
Global firms bring with them technology,
capital and managerial skills
Global firms, by their very strategy, maximize
their profits by procuring or purchasing from
globally cheapest markets/areas/countries
Global firms indulge in dumping, leading to
pricing out of domestic producers and local
small retailers
Global agricultural trade is highly asymmetric
in the sense that there is a large number of
producers, very few traders and a large number
of consumers where to ten companies control
over 75% of trade in general in all segments

38. ENTRY OF GLOBAL
AGRIBUSINESS FIRMS
Owing to the concentration of trading
power among few companies,
international decline in basic
commodity prices has not resulted in
cheaper food in importing countries
Global firms indulge in lobbying to
influence the national and international
policies in their favour

39. SUMMING UP