Q1) Explain or discuss the problems in agricultural marketing system increase in the marketed surplus and income of the
d income of the farmers. If the producer
in India ?
• Predominantly marginal or small farmers
• Small quantities of marketable surplus & limited bargaining power
• Poor availability of markets & monopolistic tendencies of APMCs
• Inadequate infrastructure in wholesale markets/ rural primary markets
• Lack of fair price discovery mechanism
• Multiple and exploitative intermediaries – low returns
• Fragmented supply chain, poor cold chain & high post-harvest losses
• Lack of cleaning, grading, packaging & quality certification facilities
• Multiple agencies involved in quality confirmation & regulation of export s
Q2)Importance of agricultural marketing?
Agricultural marketing plays an important role not only in stimulating
production and consumption, but also in accelerating the pace of economic
development. It is the most important multiplier of agricultural development. In
the process of shifting from traditional to modern agriculture, marketing
emerges as the biggest challenge because of production surpluses generated by
the shift. The importance of agricultural marketing is revealed from the
following;
1. Optimization of Resource use and Output Management An efficient
agricultural marketing system leads to the optimization of resource use and
output management. An efficient marketing system can also contribute to an
increase in the marketable surplus by scaling down the losses arising out of
inefficient processing, storage and transportation. A well-designed system of
marketing can effectively distribute the available stock of modern inputs, and
thereby sustain a faster rate of growth in the agricultural sector.
2. Increase in Farm Income An efficient marketing system ensures higher levels
of income for the farmers reducing the number of middlemen or by restricting
the cost of marketing services and the malpractices, in the marketing of farm
products. An efficient system guarantees the farmers better prices for farm
products and induces them to invest their surpluses in the purchase of modern
inputs so that productivity and production may increase. This again results in an
Q3). Elaborate the Three Phases of ICT Application in
Agribusiness?
One definition of ICT is: an umbrella term that includes any communication
device or application, encompassing: radio, television, mobile phones,
computers and network hardware and software, satellite systems and so on, as
well as the various services and applications associated with them, such as
video-conferencing and distance learning. (Lewis, 2009)
ICT is simply an electronic means of capturing, processing, storing and
disseminating information (Duncombe & Heeks)
There are mainly three components of ICT viz, computer technology,
communication technology, and information management technology.
his section provides examples of three types of ICT solution, categorized in
terms of the end result for the consumer: ICT for production systems
management, ICT for market access services, and ICT for financial inclusion.
Q4.) Define Farm Planning. Explain the various stages
involved in the process of Farm Planning?
FARM PLANNING Farm planning is a decision making process in the
farm business, which involves organization and management of limited
resources to realize the specified goals continuously. Farm planning
involves selecting the most profitable course of action from among all
possible alternatives.
Steps in Farm Planning: The various steps involved in planning are
discussed below: a) Planning: This includes the identification and
definition of the problem, collection of information, identifying
alternative solutions and analyzing each alternative. Planning is the
basic management function as it means deciding on a course of action,
procedure or policy. The control function is a source of new
information, as the results of the initial plan become known. b)
Implementation: Once the planning process is completed, the best
alternative must be selected and action should be taken to place the
plan into operation. This requires the acquisition and organization of
• Multipartite model - This model can develop from the centralised or
does not have an easily accessible market-outlet where he can sell his surplus
produce, he has little incentive to produce more.
Q3) Characteristics of a good farm plan ?
A good farm plan generally should have the following characteristics:
• An element of flexibility in a farm plan is essential to account for changes
in the environment around the farm
• A farm plan should maximize the resource use efficiency at the farm
• It should provide for the attainment of the objectives of profit
maximization through optimum resource use and balanced combination
of farm
• Risk and uncertainty can be accounted for in a good farm
• The plan helps in timely acquisition and repayment
Q4) Define the term Agribusiness Management . Explain the
structure of Agribusiness.
• Agribusiness is a combination of the words "agriculture" and
"business" and refers to any business related to farming and
farming-related commercial activities.
• Agribusiness involves all the steps required to send an
agricultural good to market, namely production, processing, and
distribution.
Structure of Agri-business: As mentioned earlier agri-business sector provides
crucial backward and forward linkages. It involves two important sectors.
1. Farm input sector: It deals with agro-based industries providing seeds,
fertilizers, feed, chemicals etc., The industries supplying machinery or
equipment, implements and petroleum etc are also important in this regard.
2. Farm product sector: It deals with production and distribution of farm
commodities. Large cooperative bodies also exist in Agri-business, but they are
few in number, whereas small scaled agroindustries are large in number. The
vertical integration of a farm is very common in poultry, fruit and vegetable
farms.
necessary land, labour, capital and other inputs. An important part of
the implementation function is the financing of the necessary
resources. c) Control: This provides for observing the results of the
implemented plan to see if the specified goals and objectives are being
met. Many things can cause a plan to go “off its track”. Price and other
changes, which occur after the implementation of the plan, can cause
the actual results to deviate from the expected. Control requires a
system for making regular checks on the plan and monitoring progress
and results as measured against the established goals.
nucleus estate models, e.g. following the privatisation of para-
Q5) Explain Contract Farming. Discuss the various Models of statals. It involves various organisations such as govern- mental
Contract Farming ? statutory bodies alongside private companies and sometimes
financial institutions. Special features:
o This model may feature as joint ventures of parastatals/
Contract farming can be defined as agricultural production carried out
community companies with domestic/ foreign investors for
according to an agreement between a buyer and farmers, which
processing.
establishes conditions for the production and marketing of a farm
product or products. Typically, the farmer agrees to provide agreed
o The vertical coordination depends on the discretion of the firm.
quantities of a specific agricultural product. These should meet the Due attention has to be paid to possible political interferences.
• Centralized model - In this model, the buyers’ involvement may vary
quality standards of the purchaser and be supplied at the time
from minimal input provision (e.g. specific varieties) to control of
determined by the purchaser. In turn, the buyer commits to purchase
most production aspects (e.g. from land preparation to harvesting).
the product and, in some cases, to support production through, for
example, the supply of farm inputs, land preparation and the This is the most common CF model, which can be characterised as
provision of technical advice. follows:
o The buyer sources products from and provides services to large
• Informal model - This model is the most transient and speculative of
numbers of small, medium or large farmers.
all contract farming models, with a risk of default by both the
o The relation/ coordination between farmers and contractor is
promoter and the farmer” (van Gent, n.d., p.5). However, this
strictly vertically organised.
depends on the situation: interdependence of contract parties or
• Nucleus estate model - In this model, the buyer sources both from
long-term trustful relationships may reduce the risk of opportunistic
own estates/ plantations and from contracted farmers. The estate
behaviour. Special features of this CF model are:
system involves significant investments by the buyer into land,
o Small firms conclude simple, informal seasonal production
machines, staff and management. This CF model can be characterised
contracts with smallholders.
as follows:
o The success often depends on the availability and quality of
o The nucleus estate usually guarantees supplies to assure cost-
external extension services.
efficient utilisation of installed processing capacities and to
• Intermediary model - In this model, the buyer subcontracts an
satisfy firm sales obligations respectively.
intermediary (collector, aggregator or farmer organisation) who
o In some cases, the nucleus estate is used for research, breeding
formally or informally contracts farmers (combination of the
or piloting and demonstration purposes and/ or as collection
centralised/ informal models). Special characteristics of this CF model
point.
are:
o The intermediary provides embedded services (usu- ally passing
through services provided by buyers against service charges)
and purchases the crop.
o This model can work, if well-designed and if incentive-
structures are adequate and control mechanisms are in place.