This document provides an introduction to agribusiness management. It discusses the nature and scope of agribusiness, important requisites for success, types of agro-based industries including processing, manufacturing, inputs, and services. It also outlines characteristics, institutional arrangements, and constraints of agribusiness. The key tasks ahead are coordination between industries and research, studying existing units, training entrepreneurs, and establishing technical guidance cells.

1. Introduction to
Agribusiness Management

2. Contents
• Introduction
• Nature
• Important requisites
• Scope
• Characteristics / Special features
• Types
• Institutional Arrangements
• Constraints
• The Task Ahead

3. Agribusiness
• Agribusiness, as a concept, encompasses the
whole range of activities from agro input
manufacturing to marketing the processed
food for the ultimate consumer.

4. Nature of successful agribusiness
• Today’s business is very competitive and
complex, due to
– Changing taste and fashion of the consumers on
the one hand, and
– Introduction of substitute and cheaper and better
competitive goods, on the other.
Produce and
sells
Produce only
what customers
want

5. Important requisites for success
• Clean objectives
– Objectives are destination points
– Should be realistic and clearly defined
• Planning
– A pre-determined plan of action
– Planning is a proposal based on past experience and
present trends for future actions
• Sound organization
– Organization of business is a harmonies combination of
men, machine material, money management

6. • Research
– Research is a systematic search for new knowledge
– Consumer behaviour
• Finance
– Estimate its financial requirements
• Proper plant location, layout and size
• Efficient management
• Harmonious relations with the workers

7. Scope of Agribusiness
• India is endowed with varied agro- climate, which
facilitates production of temperate, sub-tropical and
tropical agricultural commodities
• There is a growing demand for agricultural inputs like
feed and fodder, inorganic fertilizers, bio- fertilizers
etc.,
• Biotechnology applications in agriculture have vast
scope in production of seed, bio-control agents,
industrial harnessing of microbes for bakery
products.

8. • Export can be harnessed as a source of
economic growth.
• Rising standard of living expands the
opportunities for secondary and tertiary
processing of agricultural commodities.
• Vast coastal line and internal water courses
provides enormous opportunity for
production of marine and inland fish

9. • Live stock wealth gives enormous scope for
production of meat, milk and milk products, poultry
products etc.
• Forest resources can be utilized for production of by-
products of forestry
• Bee keeping and apiary
• Mushroom production for domestic consumption
and export
• Organic farming has the highest potential in India
• Wide scope for production and promotion of bio-
pesticides and bio-control agents for protection of
crops
• Production of Seeds, Hybrid and genetically modified
crops have the highest potential in India

10. • Micro irrigation systems and labour saving farm
equipments have good potential
• Production of vegetables and flowers under green
house conditions for export market
• Trained human resources in agriculture and allied
sciences will take on agricultural extension system
• Enhanced agricultural production throws open
opportunities for employment in marketing,
transport, cold storage and warehousing facilities,
credit, insurance and logistic support services.

11. Characteristics / Special features of
Agribusiness
• Primary forces of production
• Size of Production unit
• Frequency and Speed of decision
• Seasonality in Production
• Yield variability
• Standardization of practices and products

12. Agri-Business
Agro-produce
Processing
units
Agro-produce
Manufacturing
units
Agro-input
Manufacturing
units
Agro-service
units
Types of Agro-based Industries

13. Agro-produce processing units
• These industrial units simply process the agriculture
produce .
• They do not manufacture any new product. The
bulkiness of the produce is reduced.
• They simply process the raw material so that it can be
preserved or transported .
• Eg.. Rice mills, Dall mills.

14. Agro-produce Manufacturing units
• These units manufacture entirely new products
based on agricultural produce as main raw
material .
• The finished goods will be entirely different
when compared to its original raw material.
• Sugar factories, textile mills, paper mills etc.

15. Agro-input Manufacturing Units
• These industrial units produce goods either for
mechanization of agriculture or for increasing
productivity of agriculture.
• These units are directly linked with agriculture , as
they support agriculture at various stages.
• Eg., Industries manufacturing fertilizers,
pesticides, all types of agril. implements, pump
sets etc.,

16. Agro-Service Centre's
• These are the workshops and service centers
which are engaged in repairing and servicing of
agricultural implements and machinery.
• Eg : Servicing centers of pump sets, tractors,
diesel engines,

17. Establishment of Agro-based industries in rural areas will
help in
Reducing exploitation of producers by middlemen.
Assuring a better price to producers.
Bringing more areas under different crops,
Reducing transporting costs of produce and thereby
price of the finished products.

18. Reducing wastage of perishable agricultural
commodities.
Increasing the incomes of farmers.
Development of backward areas.
Preventing in the migration of people from rural
areas to urban areas.

19. Institutional Arrangements for the
promotion of Agro-industries
 Ministry of Agriculture deals with rice mills, sugar
mills, bakeries, cold storages.
Khadi and Village Industries Commission (KVIC) looks
after the traditional agro-based industries like “Gur”
and Khandasari
Director General of Trade and Development looks
after the industries engaged in the manufacture of
tractors , power tillers, diesel engines, pump sets etc.,

20. Agro-industries Development Corporation (AGROS) in
each state mainly supply agricultural machinery, inputs
and agricultural advisory to farmers.
Small Industries Development Organisation (SIDO)
deals with processing of food products, beverages,
food and fruit preservation, agricultural implements ,
pesticide formulations etc.,

21. Constraints in Establishing
Agro-based Industries
• No-availability of raw material throughout the year.
• Under-utlilisation of the capacity of the unit.
• Changing cropping patterns make the units defunct.
• Failure of monsoon may hit the supply of raw material.
• Units may have to diversify to utilise different varieties
of the same product.
• Proper guidance of entrepreneurs is not available.

22. • Certain agro-based units are capital intensive and
financing by institutions is a difficulty.
• Promotional activities by Govt. departments is
inadequate
• Uncertainty about market demand.
• Absence of information about the market.
• Absence of proper integration among various agencies
of development in the district.

23. The Task Ahead
 Coordination between Agro-industries Corporations
and Research institutions.
 Study of existing units before setting up of new units.
 Identification of entrepreneurs and imparting training.
 Establishment of a cell of technical officers for technical
guidance.
 Proper institutional set up to achieve integration among
various agencies of development in the district.