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Unit - Iv Agricultural Marketing: Concept & Classification & Difference
Unit - Iv Agricultural Marketing: Concept & Classification & Difference
Unit - Iv Agricultural Marketing: Concept & Classification & Difference
Agricultural Marketing
Concept & Definition
Classification & Difference
Factors
Factors affecting Marketable surplus are:
Size of Holding
Subsistence farming
Level of Production
Mode of production
Nature of crops
Price of communication
Size of the family
Requirement of Seeds
Consumption habits
Cash requirements
Defective agricultural marketing
Agricultural Marketing
Its one of the most important multiplier of agricultural
development
Technological breakthrough (high yield variety) has led
to substantial increase in production and larger
marketable and marketed surplus
Importance of agricultural marketing:
Agricultural Marketing
It involves movement of farm inputs by farmers (input
marketing) and movement of farm produce to consumers
(output marketing) including grading, storage and
distributions
Marketing of agricultural commodities is different from
marketing of manufactured commodities because of special
characteristics such as :
perishability, seasonality, bulkiness, variation in quality,
irregularity and scattered production directly linking the
supply and demand
It comprises of all operations and the agencies conducting
them, involvement in the movement of farm produced goods
and the effects of such operation on farmers and consumers
Agricultural marketing is directly linked with food habits and
income of consumer
See Link Agricultural Marketing
Fertilizer
Agro chemicals
Seeds
Farm & Irrigation equipments
Credit
Agri Inputs
Following chart illustrates some of the Agri inputs
Fertilizers
Agro Chemical
Seeds
Farm equipment
Credit
Water
Technology
Agro Inputs
Agro inputs can be classified into two categories:
(a) consumable inputs and (b) durable inputs.
Consumable inputs include fertilisers, seeds , feeds,
consumable for power generation, veterinary medicines,
packing materials, agro chemicals & pesticides etc. which are
required by farmers season after season
A no. of corporate bodies are engaged in manufacturing and
marketing of agro inputs such as fertilisers, pesticides, seeds,
farm machinery ( tractors/pump sets), resulting an estimated
business of Rs 20,000 crores per annum
Durable inputs include tractors, motors, pump sets, farm
machinery, irrigation equipments, transportation equipments/
systems, farm animals etc. which are purchased once
sometimes for life or for longer period
Determining Factors
While some input enjoy free and unrestricted market,
some inputs are to be marketed as per direction of
governments.
Marketing of input is decided on three factors:
product characteristics,
user characteristics and
use characteristics.
These factors help to decide the element of :
marketing mix,
size of marketing organisation and
appropriate marketing strategies
Explanation of Characteristics
Product characteristics:
Consumable or capital
High value or low value
High volume or low volume
High cost or low cost
Manufactured or locally produced
High or low shelf life
User characteristics
Planter/big or small farmer
Dealers or blenders
Use characteristics;
Marketing Examples
Marketing of Fertilizers:
Fertilizer consumption greatly depends upon region wise
suitability, availability, and profitability. There are three types
namely: straight ( supply only one nutrient N or P or K)
compound (mixture of N, P and/or K) or complex mixture
( three nutrients in proportion)
Marketing of fertilizers is tightly controlled by government
regulations and governed by Essential Commodities act (ECA),
Fertilizer Control Order (FCO)
Pricing until recently was under control of Governments. Now all
varieties are free EXCEPT Urea. However, to benefit the
farmers, Government gives ad-hoc subsidy to manufacturers
Fertilizer is a high volume high value product.
It is sold through distribution network with about four months
production stocked at regional godowns while factory head
stocks about two months production
Marketing of Seeds
Marketing of Seeds
Seed quality is enforced through following legislations.:
Seeds Act 1966
Seeds rules 198
Seeds control Order 1983
Seeds Bill 2004 (awaiting approval)
In seed marketing, public sectors usually adopt and operate
passive distribution systems
Cattle, poultry & aqua feeds are new area for scientifically
prepared balanced feds
Some of the MNC engaged in seed area are : Cargill( now
Monsanto). Hoechst, Pioneer seeds, Pet seeds, Harrison
Vander Have, Indo-American hybrid seed co etc
Characteristics
Disposable incomes of rural consumers depend upon
proper marketing systems of rural produce
Urban producers keenly watch the scenario to decide
their marketing strategies
Peculiar characteristics of agricultural produce are:
Bulkiness
Perishability
Variety difference
Dispersed production
Processing need variation
Seasonality
Marketing Concept
The concept for Agri output marketing in India is mainly in
the form of
(i) farm gate purchase
(ii) local markets
(iii) assembly markets
(iv) direct sales which again can be :
(a) farmers market
(b) wholesale market
(c) retail market
Marketing Concept
Farm gate purchase: this is characterized by contracts made
prior to harvesting and the buyers normally constitute
marketing group, cooperatives or traders. This minimizes the
gap between supplier price and consumer price
Local market: where farmers sell their produce on specific
days in a central place. Normally small traders are the buyers.
Quality of produce are non standard as these are procured
from several sources
Assembly markets: where the traders who procured from
local markets are the sellers in bulk and the buyers are usually
the whole sellers
Direct sales: to the consumers and hence volume is low and
loses are high
Marketing Flow
The produce has to be collected or assembled from
numerous small units of production
Since the agricultural production is seasonal and the
consumption is spread out, equalization in supply and
demand is required
This necessitates transportation and storage facilities
Another requirement is processing the produce to bring it
to consumable form
This give rise to intermediaries who in turn seek returns
commensurate with
Function of intermediaries
The function include:
Collection and Assembling
Financing
Grading and Standardization
Storage
Transportation
Processing
Wholesaling
Retailing
These functions are generally performed by village
merchants, commission agents, various operators and
retailers