Agri business managers activitiies field details

AGRI-BUSINESS MANAGER

HARYANA STATE AGRICULTURAL MARKETING BOARDPANCHKULA

E-mail:hsambabm@gmail.com

AGRIBUSINESS MANAGEMENT

� Agriculture

� Business

� Management

Agriculture� Art of cultivating various categories of crops including animal

husbandry, forestry, fishery and other related activities.

� An economic unit , Aims to sell goods and services to customers 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 enterpriseManagement ?

� 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 goals in an efficient and effective manner.

Management

� Henri Fayol : Father of Modern Management

� F.W.Taylor : Father of Scientific Management

AGRIBUSINESS

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

� Book : A Conception of Agribusiness

� Authors: John H. Davis & R.Goldberg.

12/17/20123

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.

Agribusiness�Refers to the various businesses involved in

food production, including farming, seed

supply, agrichemicals, farm machinery,

wholesale and distribution, processing,

� marketing, and retail sales.

Agribusiness - Objectives

� Commercialization of Agriculture

� Increase productivity

� Use of modern technologies

� Reducing cost of production

� Value addition

� Export agriculture

� Higher farm income

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.

Agribusiness sectorIndustrial sector

Agribusiness

= Agri +

Industry with Ag

Agricultural sector

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 resources

Agricultural commodities

Facilitative services

AGRIBUSINESS

� Productive resources

Fertilizer

Pesticides,

Equipment & machinery

Energy,

Feed, etc.

AGRIBUSINESS

� Agricultural commodities

Raw & processed commodities of food

Eg. Paddy

Rice, Ricebran & Ricebran oil

AGRIBUSINESS

� Facilitative services

Credit & insurance,

Storage, processing & marketing,

Transportation,

Packing & distribution,

Consultancy

Features of

Agribusiness Agribusiness

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

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

� Viability of the an industry is traceable to the

viability of the firms.

� Agribusiness is market oriented

CONSUMERS

RETAILERS

WHOLESALERS Gov’t officers

Managers

PROCESSORS

FARMERS

FARM SUPPLIERS

Managers

Educators

Researchers

vertical structure & coordinators of agribusiness

Viability of the firms

� Depends on

� Ability of the decision makers

� Behaviour of the structure itself

Major areas of Agribusiness� Farm supplies

� Production

� Processing

� Marketing

� Research & Extension

� Govt. Policies & Programmes

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)

…contd� Biotechnology applications

(Production of seed, bio-control agents, industrial

� In World trade, India has vast potential

Cereals, pulses, oilseeds,

Fruits, vegetables, flower, medicinal plants, Meat, and milk products,

Agricultural advisory services

…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

…contd

� Beekeeping and apiary

� Mushroom production for domestic

consumption and export

� Organic farming

…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

…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.

Small BusinessesImportance

• 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.

Small Businesses

Involves in

• Production

• Distribution

• Retailing

• Franchising

• Professional services

• Financial services

Objectives

• Service

• Profit

• Community participation

• Growth

• Subsidiaries

Characteristics

• Characterized by smallness

• Involves lesser capital

• Mostly one man venture

• They are highly diversified • wide range of products

• Wide dispersal geographically

• Small Scale Industry (SSI)

• Ancillary Industry

• Tiny Enterprises

• Export Oriented Units

• Women Enterprises

• Village &Small Scale Industries

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 wastage

Disadvantages

• Inadequate management ability

• Inadequate finance

• Poor competitive position

• Uncertain business continuity

Stages of Growth

• First Stage – Owner managed

• Second Stage – Early Growth

• Third Stage – Middle management

• Fourth Stage – Multilayer Stage

First Stage

One person operation

Owner does all the activities

Director-Founder- operated

Owner - Manager - Worker

Second stage

Separation 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

Third stage

Separation 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

Manager (s)

Worker (s)

Fourth StageMulti-layer management

Chairman

Managing Director

Manager Marketing

Manger Finance

Manager Production

How agribusiness differs from other

business

�There are variations in the kinds of business in agribusiness sector :

basic producers, wholesalers, transporters, processors,

manufacturers storage firms, packagers, food chains, retailers etc.,

� Large number of agribusinesses : Large number of different

businesses are evolved to handle the routes from the producer to retailers

�Agribusinesses are built around several millions of farm producers.

�No other business is built principally around the basic producer of its

raw product as agribusiness and these businesses deal with farmersraw product as agribusiness and these businesses deal with farmers

directly or indirectly.

�Agribusinesses vary in their sizes right from one person or one family

organisation to large giants like Reliance fresh, PepsiCo ,

Amul and Heritage etc.,

�Agribusiness firms are small and compete in a relatively free market in which

there are many sellers and many buyers and these firms do not allow monopoly

like enterprises in the industry.

�Product differentiation is common because of the brand and composition

of the products.

�Agribusiness are traditional oriented and are more conservative , when�Agribusiness are traditional oriented and are more conservative , when

compared to other businesses.

�Most of the agribusiness are community oriented in the sense most of them are

located in small towns and rural areas where relationships are important and

associations are long term .

�People know each other’s families for a several generations.

�Agribusinesses are highly seasonal in their nature due to the fact that they

depend on farm production.

�These businesses are affected by vagaries (unpredictable change) of nature.

�Natural calamities like drought, floods, insects and pests and diseases are

constant threats to agribusiness.

�Agribusiness is vertically structured.

�The Government programmes and policies have direct impact on agribusiness.

��Each of these features of the agribusiness world requires the agribusiness

managers use the principles of management in a very special way.

India in World Agriculture

Item India’s position in world

% share Rank Next to

Total area 2.5 7th Russia, Canada,

USA, China, Brazil

and Australia

Agrl. Population 23 2nd China

Arable land 11.9 2nd USA

India in World Agriculture (Contd)

India’s position in world

(Production)

% share Rank Next to

Wheat 11.7 2nd China

Rice 22.3 2nd China

Total pulses 21.2 1st

Fruits &

Vegetables

9.7 2nd China

Total milk 14.4 1st

Agriculture Scenario in India

Details 1990 2010

Per capita food availability

(Kg / person / year)

198.00 159.87

(Kg / person / year)

Per capita availability land

0.50 0.14

Agrl.growth rate

3.8 2.0

�7.5 lakhs ha of Agrl. land diverted to other

uses every year.

�Cost of inputs increased >50 times but farm

produce price increased <10 times only.

�40% of farmers want to take up other

occupation if given a chance.

Productivity of Crops (Kg/Ha)

Crops India World % yield obtained

Rice 1913 3970 48.19

Wheat 2770 4123 67.18

Maize 1792 4279 41.88

Cotton 198 1027 19.28

Groundnut 977 1367 71.47

Sugarcane (t) 68 165 41.21

Banana (t) 34 113 30.09

Demand of Horticultural Crops

Commodity

Supply (MT) Demand (MT)

2003-2004 2011-12 2020-2021

Fruits 44.04 81 98

Vegetables 87.53 185 220

Spices 2.91 5.5 6.5

Total (All) 146.82 300 360

� Quality Seed / Planting Material Production and Marketing

� Quality Input Production

� Food Grain Marketing and Export

� Grain based alcohol, malted foods, starch glucose

� Pulse and Oilseeds Post harvest and Processing

Agriculture

� Pulse and Oilseeds Post harvest and Processing

� Organic Farming

� Agro based Industry

� Vermicomposting

� Quality Certification

� Farm Mechanization

Horticulture� Contract Farming

� Organic Farming

� Quality Seed / Planting Material

Production

� Juices and concentrates

� Micro & mass propagation of planting

material

� Off-Season Vegetable Production

� Commercial Flower Production

� Tissue culture

• Silkworm Rearing

Technology

• Silk Yarn Production

Sericulture

• Value addition & export

• Handloom & Textile /

Garment Designing

Livestock

• Dairy Processing and Chilling

• Meat Processing

• Broiler and Egg Production and marketing

• Livestock Feed

• Livestock vaccine / drug production /

diagnosis / clinics

• Whole and Skimmed milk powder

(WMP & SMP)

Integrated and Intensive Fish

Farming

Carp Hatchery

Fishery

Carp Hatchery

Ornamental Fish

Fish Feed

Frozen and canned products

Processing• Fruit and vegetable processing, including dehydration,

canning, packaging, processing of fruits.

• Processing of maize for starch and feed through improved

mini/small mills and dry milling plants.

• Processing of millets for various purposes 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.

• Establishing cold storage

and warehousing

• Increasing number of

Agri clinics

Infrastructures

• Commodity markets

Agribusiness Organizations in India

Domestic Agribusiness Firms

• Britannia India Ltd

• Dabur India

• Indian Tobacco Corporation

• Marico

• Mother Dairy

• Reliance

Foreign Agribusiness Firms

� Cadbury Ltd

� Monsanto

� Cargill

� Coco Cola

� Hindustan Lever Ltd

� Pepsi Co

Better Agribusiness-Needs� Co-operative farming (AMUL)

� Contract farming (ITC)

� Precision farming (Dharmapuri / Krishnagiri)

� Farm Mechanisation

� Domestic and export market information centers

� Crop federations / Growers organizations.

� Credit delivery at lower interest rates.

� Establishment of agri export zones and Markets

� Establishment of agro based industries and modern cold storage, ware houses

� Export management through E-commerces / E-trading

�Therefore Agribusiness is

very unique and requires

unique abilities and skills to

its managers.

Thank you

Agri-Business Manager

Agri business managers activitiies field details

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