AEC & RI, KUMULUR, TNAU - 62171204/18/23

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AGRIBUSINESS MANAGEMENT

AGRIBUSINESS MANAGEMENT

Agriculture Business Management

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Agriculture

Art of cultivating various categories of

crops including animal husbandry,

forestry, fishery and other related

activities.

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Business

An economic unit

Aims to sell goods and services to

customers

At prices that will provide an adequate

return to its owners

Commercialization of any enterprise

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Management ?

A set of activities(planning & decision making, organizing, leading / directing & controlling)

directed at an organization’s resources (human, financial, physical, and information)

with the aim of achieving organizational goalsin an efficient and effectivemanner.

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Management

Henri Fayol : Father of Modern Management

F.W.Taylor : Father of Scientific Management

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AGRIBUSINESS

Agribusiness as a concept was born in Harvard University in 1957.

Book : A Conception of Agribusiness

Authors: John H. Davis & R.Goldberg.

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Production

Marketing

TR

TR

TR

F

FRetailingWholesalingProcessingTransportationProductionFarm supply

Technological revolution disperses production and marketing functions

Traditional agriculture is characteristics by functionally self-contained farms

Traditional agriculture & Technological revolution

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AGRIBUSINESS Agribusiness is the sum total of all operations involved in the manufacture

and distribution of farm supplies; production activities on the farm; and the storage, processing and distribution of

farm commodities and items made from them.

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AGRIBUSINESS Agribusiness encompasses

all of the agricultural sector and that portion of the industrial sector

which contains the sources of farm supplies or

the processors of farm products.

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Agribusiness sectorIndustrial sectorAgribusiness

= Agri +Industry with Ag

Agricultural sector

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AGRIBUSINESS Agribusiness is defined as all business

enterprises that buy from or sell to farmers.

Transaction may involve either an input or a produce or service and Encompasses items such as:

Productive resourcesAgricultural commoditiesFacilitative services

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AGRIBUSINESS Productive resources

Seed, Fertilizer Pesticides, Equipment & machineryEnergy, Feed, etc.

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AGRIBUSINESS

Agricultural commodities Raw & processed commodities of food

Eg. Paddy

Rice, Ricebran & Ricebran oil

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AGRIBUSINESS

Facilitative services Credit & insurance, Storage, processing & marketing, Transportation, Packing & distribution, Consultancy

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Important Features of Agribusiness

Agribusiness is a multifaceted point of view, complex vertical structure, largely depend and partly independent.

Successful decision making at firm level is the basis for development in future.

Viability of the an industry is traceable to theviability of the firms.

Agribusiness is market oriented 04/18/23

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CONSUMERS

RETAILERS

WHOLESALERS

PROCESSORS

FARMERS

FARM SUPPLIERS

Gov’t officersManagersEducatorsResearchers

vertical structure & coordinators of agribusiness04/18/2317

Viability of the firms

Depends on Ability of the decision makers Behaviour of the structure itself

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Major areas of Agribusiness

Farm supplies Production Processing Marketing Research & Extension Govt. Policies & Programmes

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Scope for Agribusiness in IndiaScope for Agribusiness in India

India is endowed with varied ago-climate (Facilitates production of temperate, sub- tropical and tropical agricultural

commodities) Growing demand for agricultural inputs (Feed and fodder, inorganic fertilizers, bio- fertilizers) Biotechnology applications

(Production of seed, bio-control agents, industrial harnessing of microbes for bakery products)

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…contd Biotechnology applications

(Production of seed, bio-control agents, industrial

harnessing of microbes for bakery products)

In World trade, India has vast potential

Cereals, pulses, oilseeds, Fruits, vegetables, flower, medicinal plants, Meat, and milk products, Agricultural advisory services

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…contd Scope for secondary and tertiary

processing of agricultural commodities.

Scope for production of marine and inland fish and ornamental fish culture.

Scope for production of meat, milk and milk products, poultry products etc

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…contd Beekeeping and apiary

Mushroom production for domestic consumption and export

Organic farming

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…contd Production and promotion of bio-

pesticides and bio-control agents

Seeds-hybrid and genetically modified crops

Micro-irrigation systems and labor saving farm equipments

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…contd Production of vegetables and

flowers (Export market)

Trained human resources in agriculture and allied sciences

Opportunities for employment in marketing, credit, insurance and logistic support services.

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Small Businesses

Importance Contributes 7% of the GDP. 32.25 lakhs small-scale industrial units /

businesses Employment generation 177.30 lakh persons. Output of this sector is around Rs.5,78,470 crores. Export amounted to Rs.53, 975 crores. Contribute 40 % of gross turnover in

manufacturing sector, 45% of the manufacturing exports and 35% of the

total exports. 04/18/23

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Small Businesses

Involves in Production Distribution Retailing Franchising Professional services Financial services

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Objectives

Service Profit Community participation Growth Subsidiaries

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Characteristics

Characterized by smallness Involves lesser capital Mostly one man venture They are highly diversified

wide range of products Wide dispersal geographically

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Types

Small Scale Industry (SSI) Ancillary Industry Tiny Enterprises Export Oriented Units Women Enterprises Village &Small Scale Industries

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Advantages

Less capital outlay but more employment generation

Does not require sophisticated technology Facilitates decentralization and dispersal of

business units They offer a wide range of choices to

consumers Can serve specialized needs Utilizes the resources in full without

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Disadvantages

Inadequate management ability Inadequate finance Poor competitive position Uncertain business continuity

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Stages of Growth

First Stage – Owner managed Second Stage – Early Growth Third Stage – Middle management Fourth Stage – Multilayer Stage

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First Stage

One person operation

Owner does all the activities

Director-Founder- operated

Owner - Manager - Worker

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Second stageSeparation of management and non-management functions

Hired subordinates to do some of the manual and / or

mental activities while owner manages the business

Early Growth Owner- Manager

Workers

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Third stageSeparation of ownership and management functions

Owner begins to relinquish the responsibilities for the

day-to-day running of the business activities to a

professional manager.

One Layer Middle Management

Owner

Manager (s)

Worker (s)

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Fourth StageMulti-layer management

Chairman

Managing Director

Manager Marketing

Manger Finance

Manager Production

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Thank youThank you04/18/2339