This chapter is intended to help the students understand how agribusiness came into being, the size and importance of the agribusiness sector, the conflicting needs of the players in this sector and most importantly, the relevance of marketing to the agricultural and food sectors.
It is an introduction to agribusiness which includes the short history of evolution of the agribusiness, its importance, scope or areas of agribusiness. It also includes the distinctive features of agribusiness management.
Distribution channels involved in agribusinessAjit Majumder
Introduction
The marketing of agricultural commodities is poor in India. Global marketing network is not that developed for agricultural commodities. The Marketing channels for agricultural products vary from product to product, production to production and time to time. E.g. Marketing channels for food grains will differ from oil seeds, eggs, and live poultry.
The uniqueness of Agricultural Products :
Marketing of agricultural commodities is different from the industrial manufactured products
Agricultural products are perishable in nature and the period of perishability varies from a few hours to few months
Farm products are produced in a particular season and bulky in nature
Transportation and storage are difficult as well as expensive
Quality of the products varies farm to farm.
Uncertainty of agricultural production
Most of the farmers are either marginal or small.
Distribution Channel in India is a multilayer structure. And there are multiple nos of middlemen responsible for delivering agriculture products from producer to consumer. Farmers with land less than 0.5 ac usually go to nearer market and keep selling their grains, vegetables, live stocks, etc weekly. Farmers with land not more than 5 ac mostly sell their produce in nearer market or other weekly market. Farmers with land more than 0.5 ac tends to choose different modes of channel.
It is an introduction to agribusiness which includes the short history of evolution of the agribusiness, its importance, scope or areas of agribusiness. It also includes the distinctive features of agribusiness management.
Distribution channels involved in agribusinessAjit Majumder
Introduction
The marketing of agricultural commodities is poor in India. Global marketing network is not that developed for agricultural commodities. The Marketing channels for agricultural products vary from product to product, production to production and time to time. E.g. Marketing channels for food grains will differ from oil seeds, eggs, and live poultry.
The uniqueness of Agricultural Products :
Marketing of agricultural commodities is different from the industrial manufactured products
Agricultural products are perishable in nature and the period of perishability varies from a few hours to few months
Farm products are produced in a particular season and bulky in nature
Transportation and storage are difficult as well as expensive
Quality of the products varies farm to farm.
Uncertainty of agricultural production
Most of the farmers are either marginal or small.
Distribution Channel in India is a multilayer structure. And there are multiple nos of middlemen responsible for delivering agriculture products from producer to consumer. Farmers with land less than 0.5 ac usually go to nearer market and keep selling their grains, vegetables, live stocks, etc weekly. Farmers with land not more than 5 ac mostly sell their produce in nearer market or other weekly market. Farmers with land more than 0.5 ac tends to choose different modes of channel.
This chapter brings together the basic ideas of consumer demand, and the production and cost concerns. This chapter will enable students to understand how price is determined in a market and the role of price.
The slides describes the basics of agricultural marketing, its importance, scope with some concepts like market, dimensions of market, market structure, market conduct and market performance.
Agricultural commodity marketing; marketing issues related to timeDaisy Ifeoma
This chapter will enable students to understand the different stages of agricultural commodity marketing. At the end of this chapter, students should have an understanding of how agricultural commodity exchanges operate, how the prices of commodities are determined and most importantly be able to argue in favour of /against the presence of hedgers and speculators in the futures market.
This chapter brings together the basic ideas of consumer demand, and the production and cost concerns. This chapter will enable students to understand how price is determined in a market and the role of price.
The slides describes the basics of agricultural marketing, its importance, scope with some concepts like market, dimensions of market, market structure, market conduct and market performance.
Agricultural commodity marketing; marketing issues related to timeDaisy Ifeoma
This chapter will enable students to understand the different stages of agricultural commodity marketing. At the end of this chapter, students should have an understanding of how agricultural commodity exchanges operate, how the prices of commodities are determined and most importantly be able to argue in favour of /against the presence of hedgers and speculators in the futures market.
Value Chain Bankrolling: Strategy towards enhancing growth in Agriculture sec...IJMER
Value chain has been an important concept in management offering improvement over the
traditional supply or distribution chain, with an aim to optimize the chain and reduce it to limited links
with each one performing an activity to enhance the value of the product and not merely the cost. Further,
management of such value chain network should focus on cohesively taking the stake-holders along and
sharing / spreading the benefits among them, such that the network becomes symbiotic and sustainable,
and the process of value-addition & delivery gets ethical. The main objective of this research paper is to
highlight the key value chain activities in context to agricultural products and suggests the importance of
value chain financing which requires due attention from National and Regional level financing
corporations.
This note looks at crop rotation as one of the sustainable arable crop production practices. It describes the approaches to crop rotation, the benefits and the limitations of crop rotation. The note will serve as a valuable resource for higher ed students taking introductory courses in Agriculture.
This note looks at crop rotation as one of the sustainable arable crop production practices. It describes the approaches to crop rotation, the benefits and the limitations of crop rotation. The note will serve as a valuable resource for higher ed students taking introductory courses in Agriculture.
Turning your farming venture into an export businessDaisy Ifeoma
A short presentation to ZWARFA women group of farmers on an export seminar organized for them by ZimTrade. The buzz word of the presentation is Upgrading. How can small to medium-scale farmers upgrade their products, processes and functions to target export markets? The presentation explains briefly paths and means by which these farmers can upgrade.
Quality standards and enhancement in zimbabwean universities; the role of lec...Daisy Ifeoma
This paper discusses the roles of lecturers in improving quality of university education in Zimbabwe. The paper contends that continuous and holistic improvement in university education system requires the collaborative efforts of various stakeholders both internal and external with focus on the role of lecturers.
Agricultural commodity marketing; marketing issues related to formDaisy Ifeoma
This chapter will enable students to understand the different stages of agricultural commodity marketing.The chapter also emphasizes the importance of grading and classification of agricultural commodities to the students.
This topic looks at one of the strategies used by farmers and small firms in the agribusiness sector to leverage cost, access markets and become competitive in the market. Emphasis was made on the use of contract farming (vertical linkage) and cooperatives (horizontal linkage).
This chapter is intended to ensure that students understand why agricultural policies are needed in both developing and developed countries. It will also shed light on the major forces that cause policy change, reasons for government involvement in agriculture and the place of agricultural policies in the future.
This chapter exposes students to the issues of consolidation and concentration faced by the agribusiness sector in most developing countries and how this affects their productivity and profitability.
2. Introduction
Agribusiness includes not only those that farm
the land, but also:
the people and firms that provide the inputs (e.g.
seeds, chemicals, and credit);
process the output (e.g. milk, grain, and meat);
manufacture the food products (e.g. ice cream,
bread, and breakfast cereals); and
transport and sell the food products (e.g.
restaurants and supermarkets) to consumers.
3. Introduction
Agriculture has undergone a rapid
transformation as new industries evolved and
traditional farming operations grew larger and
more specialized. The transformation did not
happen overnight, but came slowly as a
response to a variety of forces.
Evolution of Agribusiness
5. The Agribusiness System
Input sector
This sector is a large part of agribusiness.
It provides producers with the feed, seed, credit,
machinery, fuel, chemicals, they need to operate.
This sector provides 75% of the input used in
production agriculture.
Improvements in the quality of purchased inputs
have been a large source of efficiency gains for the
entire system.
The trend towards the use of more purchased input
will continue
6. The Agribusiness System
Production sector
The middle part of agribusiness is the production
sector.
In the recent years, producers have specialized into one
or a few crops or types of livestock in order to be able
to increase the efficiency of their operations and
become production experts.
The agricultural production sector has been the cause
of much of the change in agribusiness. They, in turn,
have been changed by development in other areas of
agribusiness, particularly in technology.
7. The Agribusiness System
Processing/manufacturing sector
Employs millions of people in a variety of
businesses ranging from grain elevators to fruit
and vegetable- processing plants to
supermarkets to fast food restaurants.
The businesses in this sector acquire raw
agricultural commodities from producers and
then process them into food products that are
sold at times, at places, and in forms that are
desired by consumers. The cost of these
activities is called the marketing bill.
8. Definition of Agribusiness
John Davis and Ray Goldberg (1957), defined
agribusiness as all operations involved in the
manufacture and distribution of farm suppliers;
processing, and distribution of the resulting
commodities and items.
Ewell Roy (1980) defined agribusiness as the
“coordinating science of supplying agricultural
production inputs and subsequently producing,
processing and distributing food and fibre.
9. Definition of Agribusiness
An inclusive definition of agribusiness was
provided by the Australian Department of
Agriculture, Fisheries and forestry. The ADAFF
called the agribusiness sector a “chain” of
industries directly or indirectly involved in the
production, transformation, or provision of food,
fibre, chemical and pharmaceutical substrates.
10. Definition of Agribusiness
Agribusiness is the coordination of all activities
that contribute to the production, processing,
marketing, distribution, financing and
development of agricultural commodities and
resources. This includes food, fibre, wood
products, natural resources, horticulture, and other
plant and animal products and services.
12. Definition of Agribusiness
Marketing
Agribusiness marketing can best be defined as
series of services involved in moving a product
from the point of production to the point of
consumption. It is a series of inter-connected
activities involving: planning production, growing
and harvesting, grading, packing, transport,
storage, agro-and food processing, distribution
and sale.
13. Conflicting Needs of Producers and
Consumers
Conflicting needs of producers and consumers that agrimarketing seeks
to reconcile.
Producers try to consumers try to
Maximize profit Maximize the
over the long term satisfaction they receive from
the products they buy With
their limited incomes
Sell large quantities Buy small quantities
of fewer products of many products
Obtain the highest Obtain the lowest
prices prices
14. Conflicting Needs of Producers and Consumers
Marketing plays a key role in the success of any
economy by bridging the gap between the differing
needs of producers and consumers.
Marketing helps producers to decide what products
to produce and when to produce them. Marketing
also helps consumers by letting them know what
products are available at what price.
When done well, it leads to greater satisfaction for
consumers and higher profits for producers.
15. Conflicting Needs of Producers and
Consumers
Agribusiness is the largest industry in most
developed nations, and marketing is its largest
segment. More than 80 % of those involved in
agribusiness are employed in marketing
16. Role of Marketing in the
Agribusiness System
In any economic system there are always barriers
between producers and consumers that prevent
producers from efficiently meeting consumer
needs.
These include separations of space, time,
information and ownership. The role of
marketing system is to overcome these
separations by building a bridge between
producers and consumers
17. Role of Marketing in the
Agribusiness System
The most familiar marketing
function.
Must occur in the marketing
system if any product
exchanges are going to
occur.
Overcomes separations of
ownership by exchanging
legal title of the product for
money between the buyer
and seller.
18. Role of Marketing in the Agribusiness
System
Physical functions: Storage:
Agricultural supply is seasonal while demand is
continuous. This gives rise to the need for storage.
The storage function is one of balancing supply and
demand.
It overcomes the separation of time by keeping the product
in good condition between production and the final sale.
A farmer, merchant, co-operative, marketing board or
retailer who stores a product provides a service. And
should earn a profit from that service.
Both growers and consumers gain from a marketing system
that can make produce available when it is needed.
19. Role of Marketing in the
Agribusiness System
Physical functions: Transportation:
The transport function is chiefly one of
making the product available where it is
needed, without adding unreasonably to the
overall cost of the produce.
It overcomes the separation of space by
moving the product from where it is
produced to where the consumer is willing to
purchase it
20. Role of Marketing in the
Agribusiness System
Physical functions: Processing:
This function is responsible for changing the
form of a commodity to a form that has
greater value to the consumer.
The form changing activity is one that adds
value to the product.
Does not overcome any gap but it increases
the utility of the product.
22. Role of Marketing in the Agribusiness
System
Facilitating functions: Standardisation:
Establishment and maintenance of uniform
measurements of produce quality and/or quantity.
Simplifies buying and selling as well as reducing
marketing costs by enabling buyers to specify
precisely what they want and suppliers to
communicate what they are able and willing to
supply with respect to both quantity and quality of
product.
Overcomes the information gap
Impossible to trade without this function
23. Role of Marketing in the
Agribusiness System
Facilitating functions: Financing:
An inevitable lag between investing and sale and
someone must finance the lag.
The question of where the funding of the
investment is to come from, at all points between
production and consumption, is one that
marketing must address.
Overcomes time separation.
24. Role of Marketing in the
Agribusiness System
Facilitating functions : Risk bearing:
Involves assuming the risk of loss between the
time of purchase and sale. In both the production
(physical risk)and marketing of produce the
possibility of incurring losses is always present
(marketing risk).
Overcomes the separation of time
25. Role of Marketing in the
Agribusiness System
Facilitating functions : Market intelligence:
As far as is possible marketing decisions should
be based on sound information.
The role of market intelligence is to reduce the
level of risk in decision making.
It establishes what products are right for the
market, which channels of distribution are most
appropriate, how best to promote products and
what prices are acceptable to the market.
Overcomes the gap of information
26. Utilities of Marketing
A useful way to think about the utility process
is to think of them as adding value to the
product.
Form utility: this means to process the product into a
form desired or needed by the consumer.
Place utility: this means transporting the product to a
location desired by the consumer.
Time utility: this means storing the product until the
time it is needed by the consumer.
Possession utility: this allows consumers to gain
ownership of the product legally.
27. Utilities of Marketing
Each of these utilities is added to the product by
performing one or more of the nine marketing
functions.
Form utility is created by processing.
Place utility is created through the transportation
function.
Time utility comes from the storage function.
Possession utility is created by the buying and selling
functions.
In this way the barriers of space, time,
information, value and ownership are overcome
for the producer and consumers.
28. The end
Energiser:
Consider one of the best-selling fast- food items,
the cheeseburger. To get an idea of how
agribusiness affects our daily lives,
imagine what is involved in assembling a cheeseburger
with all the trimmings.
List at least 10 businesses or services that are needed to
get a cheeseburger ready for consumption.