Production Agriculture

Technological Innovation

Many technological advances are driving

production agriculture
Telecommunications, biotechnology,
satellite communications, etc.
Technology, not land, is the driving force
behind Japan, Korea and China’s
agriculture success
Benefits of Increased
Production?

Each farmer feeds about 100 consumers

today as compared to only about 5
consumers in 1900
Production is rising, while man-hours
worked is declining
More inputs are purchased off-farm
Chronic excess production (policy effect)
Increasing globalization of agriculture
Changes over time

Trends in size, location, ownership, and

specialization of farms are changing how
food is produced and marketed
Closer ties between farmers and
agricultural supply and marketing firms
Structure of Production
Sector

Large number of small farms producing a

small share of total output
Small number of large farms producing a
large share of total output
Specialization

Restricting the scope of economic activity

and concentrating on doing a few tasks
well
Commodity
Personnel
Process
Important Considerations

Much of agricultural production enters the

marketing system in small lots
The farmer is primarily interested in
production, not marketing
Changes are taking place
The marketing system must serve two
different groups
Product Characteristics

Products as raw materials

Agricultural products are bulky and
perishable
There is quality variation
Farm Marketing
“Problems”

Farmers do not have complete control

over their output
Farmers face difficulties in improving their
prices
“Free-rider problem”
The “cost-price squeeze”
Changing food market pricing efficiency