Business and marketing in agriculture.
Agriculture fulfils the primary necessity of human kind by creating food. A century ago, farmers used to produce food products primarily for their own use or for trade (in kind or cash) with others, mostly in the same village or adjacent locations. They were primarily selfreliant. But,now manufacturing environment has altered dramatically from self- dependence to commercialization. High yielding varieties, the use of fertilises, insecticides, and pesticides, as well as farm Mechanisation, have all benefited from technological improvement, increasing farm productivity and, as a result, the amount of excess that can be sold and marketed.
The improved production is accompanied by the increasing urbanization, income, changing life style & food habits of the consumers and increasing linkages with the overseas market. Today customers are not restricted to rural locations where food is produced. Further, increased demand for processed or semi-processed food items demands value addition in the raw agricultural supply. Due to these developments, food commodities must be transported from the producer to the consumer as value-added goods. Agricultural marketing brings producers and consumers together through a series of activities and thus becomes an essential element of the economy. The scope of agricultural marketing is not only limited with the final agricultural produce. It also addresses provision of agricultural supplies (factors) to the farmers.
agricultural marketing definitions The term agricultural marketing is composed of two words- agriculture and marketing. Agriculture generally refers to the raising and/or growing of plants and animals, while marketing refers to the activities involved in getting products from the point of production to the point of consumption. Many researchers have characterised agricultural marketing and combined crucial characteristics of time, location, shape and passion usefulness. Following are a few definitions of agricultural marketing: According to Phillip Kotler, human activity is focused on meeting needs and wants through the exchange process. Performance of business activities that directs the flow of goods and services from producers to users (American Marketing Association).
The study of agricultural marketing comprises all the operations, and the agencies conducting them, involved in the movement of farm produced foods; raw materials and their derivatives, such as textiles, from the farms to the final consumers, and the effect of such operations on the farmers, middlemen and consumers (Thomsen). This definition does not include the input side of agriculture. Agricultural marketing is a process which starts with a decision to produce a saleable farm commodity, involves all the aspects of market structure or system, both financial and institutional, based on technical and economic considerations, and includes pre- and post-harvest operations, assembling, grading, storage, transportation and distribution (National Commission on Agriculture, 1976). Notes produced for Course AgEcon530 (Agricultural Marketing): S.K. Srivastava, Scientist (Agril. Economics), NCAP, New Delhi-110 012, is the course teacher. Key elements of agricultural marketing Agricultural marketing includes all operations related to moving produce from farms to consumers and supplying farm inputs to farmers.
The agricultural marketing system includes two major sub-system viz. product marketing and input (factor) marketing. The product marketing sub-system includes farmers, village/primary traders, wholesalers, processors, importers, exporters, marketing cooperatives, regulated marketing committees and retailers. The input sub-system includes input manufacturers, distributors, related associations, importers, exporters and others who make available various farm production inputs to farmers. The agricultural marketing system is understood and developed as a link between the farm and non-farm sectors.
A dynamic and growing agriculture sector requires fertilizers, pesticides, farm equipments, machinery, diesel, electricity, packing material and repair services which are produced and supplied by the industry and non-farm enterprises. The expansion in the size of farm output stimulates forward linkages by providing surpluses of food and natural fibres which require transportation, storage, milling or processing, packing and retailing to the consumers. These functions are performed by the non-farm enterprises. Further, if the increase in agricultural production is accompanied by a rise in real incomes of farm families, the demand of these families for non-farm consumer goods goes up as the proportion of income spent on non-food consumables and durables tends to rise with the increase in real per capita income. Several industries, thus find new markets for their products in the farm sector. The marketing system should be such as may bring about the overall welfare to all the segments (producers, consumers, middlemen and traders) society. Government act as a watch-dog in ensuring the interest of all the groups associated in the marketing.
The subject of agricultural marketing includes marketing functions, agencies, channels, efficiency and costs, price spread and market integration, producer’s surplus, government policy and research, training and statistics on agricultural marketing and imports/exports of agricultural commodities. The overall objective of agricultural marketing in a developing country like India is to help the primary producers viz. the farmers in getting the remunerative prices for their produce and to provide right type of goods at the right place, in the right quantity and quality at a right time and at right prices to the processors and/or ultimate consumers on the other.
