The word agriculture has been derived from a Latin word agriculture- ager means a field and cultura means to cultivate. The term agriculture defines to cultivate the fields. The Longman,s Modern English Dictionary defined the word agriculture as “ the science or the art or practice of large scale oil cultivation in order to produce crops.”Mc Carty(1970) defines agriculture as “ the purposeful tending of crops and live stocks.” Thus, the word agriculture includes not only domestication of plants and animals useful to man but also many of the operation involved in marketing them. It is revealed that real nature of agriculture is associated both individually and collectively, with the farming occupation of man. In Mesolithic age about ten thousand years ago, man began to cultivate land and produced food grains.

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DIMENSSIONS IN AGRIBUSINESS ENVIRONMENT
Introduction
The word agriculture has been derived from a Latin word agriculture- ager means a field and
cultura means to cultivate. The term agriculture defines to cultivate the fields. The Longman,s
Modern English Dictionary defined the word agriculture as “ the science or the art or practice of
large scale oil cultivation in order to produce crops.”Mc Carty(1970) defines agriculture as “ the
purposeful tending of crops and live stocks.” Thus, the word agriculture includes not only
domestication of plants and animals useful to man but also many of the operation involved in
marketing them. It is revealed that real nature of agriculture is associated both individually and
collectively, with the farming occupation of man. In Mesolithic age about ten thousand years
ago, man began to cultivate land and produced food grains.
In India, evidences of cultivation of barley and wheat during
Neolithic period are available. The exacavation at Mohanjodaro and Harappa are evidences of
agriculture .In north west of Deccan plateau, rice, wheat, cotton were cultivated .Industrial
revolution in Britain in eighteenth century brought a new era of mechanization that put impact
on agriculture .New crops were introduced, new agricultural implements like steel plough and
harrow were invented. Chemical fertilizers were used. In the end of nineteenth century and in
twentieth century, the capitalism of Europe and Britain initiated a new system of agriculture i.s.
plantation agriculture in tropical and sub- tropical regions of world.
Characteristics of Indian agriculture
Agriculture is backbone of Indian economy. It provides food to population and fodder to
livestocks and absorbs about 60 % of total workforce of country. Some salient features of Indian
agricultural are:
1. Dependence on monsoon Agriculture in India is a gamble of monsoon. There is uncertainty of
monsoon. Some timed due to heavy rain, Assam, West Bengal, coastal Orissa are flooded. In
contrast, due to less rain, drought occurs in many parts of Maharashtra and Rajasthan.
2. Low productivityThe agricultural productivity in India is low in comparison to many
developed and developing countries. This low production is associated to small size of land
holding, scattered fields, inequality in ownership. Many farmers are uneducated, superstitious
and they do not want to take risks.
3. Diversity in agricultural system In India, variations are noticed in climate, soil types,
temperature condition. Consequently, different agricultural systems are found. In Bihar, Uttar
Pradesh, West Bengal, intensive subsistence farming is dominated while shifting agriculture is
noticed in north eastern states. Paddy, tobacco are major crops in coastal areas of Andhra
Pradesh and cotton is dominant in Gujarat and Maharashtra.
4. Regional inequality in food production-In India due to diverse socio- economic conditions,
some states have surplus of production such as Punjab, Haryana while some other states like
Chhattisgarh, Bihar have deficiency in food production due to poverty, less education and low
production technology.
5. Problems of land degradation Due to increasing population, new agriculture systems have
been adopted, This has increased production but also causes environmental degradation. In
shifting agriculture, burning of forests and deforestation in Himalayan regions have caused soil

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erosion. More emphasis on irrigation and chemical fertilizers has reduced soil fertility. The
problem of water- logging in Ganganagar, Jaisalmer are increasing due to Indira Gandhi canal.
6. Lack of infrastructure Proper facilities of trade transport, storage marketing are essential for
agriculture development. In India, farmers do not get proper prices of their crops. They are
exploited by corrupt traders and agents during selling their produce. Poor linkage with
industrial sector In terms of labour and material inputs, agriculture is poorly linked with
industries. Farmers provide raw material for agro based industries but they are not enough
powerful to make pressure for fixation of agriculture produce.
7. Problem of shifting agriculture In tribal areas of Madhya Pradesh, Chhattisgarh Andhra
Pradesh and north- eastern states of India, most tribal population is involved in shifting or slash
and burn agriculture or jhuming agriculture. In this agriculture, dense forests are cut down for
clearing land to agriculture. After two or three years, that pot becomes unfertile. Then tribes
leave that plot and clear the forests of next areas. It causes soil erosion, deforestation and loss
of bio- diversity.
8. Decline in investment in agriculture In the beginning of green revolution, the investment
both public and private was more in agriculture. After that, the private investment declined.
Moreover, the private investment concentrated only in northern region, like Punjab, Haryana
and rest of India was neglected. The share of agriculture sectors in capital formation in GDP
declined from 1.92% in early 1990s to 1.28% in early 2000s.
9. Exploitation of tenants The technological and institutional changes have been helpful in
increasing production. But it has helped only rich farmers because they can afford the expenses
of developed machinery for agricultural practices. The exploitation of poor has not declined.
The fruits of agricultural progress goes to the pockets of rich peasantry
Programmes for agribusiness development
About 70 % of population of India lives in villages where agriculture is the dominant economic
activity. So, after independence, a number of programmes have been adopted for development
of agriculture
1. Under Five year plans :
Many programmes have been started for development of agriculture such as Community
development Programme(1952) Tribal area development programme(1962), Intensive
agricultural area programme(1964-65), High yielding variety programms(1965), Intensive area
development scheme(1965)Drought prone area programme(1970-71), Tribal area development
programme(1970-71),The command area development programme(1974), Desert development
programme(1977-78). A centrally sponsored scheme on “On Farm Water Management’ was
started in 2002 for incouraging crop production in Eastern India. The Agri- clinic and Agri-
business scheme was launched in 2001-02 in collaboration with NABARD to take technology to
the doors of farmers through use of unemployed agricultural graduated.
2. Agricultural policy in India
The govt. of India announced a new agricultural policy on 28 July 2004 to develop such
agricultural economy that could provide food and nutrition to 121 million population, adequate
raw material to growing industries, and sufficient surplus for export. In this policy, promises

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have been made for second green revolution, white revolution and blue revolution. So, it is
called Rainbow revolution.
3. National Horticulture Mission (NHM)
was started in 2005-06 to spread area of horticulture in north- eastern states and Himalayan
states. Consequently, the production of horticulture crops increased from 170.8 million tones in
2004-05 to214.7 million tonnes in 2008-09.
4. Agro-forestry
Agro forestry is a system of land management for the production of crops with forest plants
and animals. It will supply timber for agricultural implements. Its main purpose is to supply
firewood in rural areas and to stop cutting of trees. It also provides employment to landless
labourers, marginal farmers.
5. Contract farming
It is a farming to maximize profit in agricultural production. A company signs a contract with
farmers to produce a fixed crop for company that will be purchased on an agreed price. The
advantages of contract farming are assured sale of produce, higher price than in open market,
and provision of expertise by the company.
6. Corporate agriculture
In corporate agriculture, more stress is given on production of oil-seeds and other cash crops
.The large potential in horticulture, agro- forestry has attracted private corporate sector in
agriculture. Production of mushroom and vanilla is example of corporate agriculture. The
emerging consumption of value- added products like butter, cheese and yoghurt have been
helpful in corporatization of agriculture. But in corporate agriculture, intensive use of chemical
fertilizers and plant production devices change fertile land into wasteland. In Punjab and
Karnataka ,wasteland has increased .More emphasis on cash crops in comparison to food crops
creates food crisis leading to hunger and malnutrition.
Sustainable development of agriculture and agribusiness
Bruit land, chairman of world commission on Environment and Development defines
sustainable development as ‘development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. Sustainable
development emphasizes on satisfying the needs of poor and the constraints of the
environment in meeting the present and future needs.’ The concept of development is related
to utilization of resources for the benefit of people. Generally, the term of development refers
to a mix of characteristics related to economic growth, welfare and modernization in relation to
particular societies. In the process of development, it must be analyzed if the utilization of
resources is compatible with the ecological balance .Land should be irrigated but with right
quantity. Forests should be cut down but new saplings should be planted.
The farm lands have been deeply ploughed
or excessively irrigated. Over 150 million hectares (45% of geographical area) are affected with
soil erosion, 69 million hectares is in critical situation and 93.69million hectares have become
seriously degraded. Over irrigation has water logged more than 6 million hectares and
damagingly salinized more than 7.16 million hectares of farmlands and 6.6 million hectares of
wasteland has emerged due to mismanagement of land resource. With the process of modern
agriculture and diffusion of technology, the continuous excessive use of fertilizers pesticides

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not only decreases the farmers profit but also causes problems of soil loss, deterioration of
water quality, growing resistance of insects, weeds and contribute to the climate change.
The national Mission for Sustainable
Agriculture (NMSA) refers sustainable agriculture by adopting appropriate adoption and
mitigation strategies for ensuring food security, enhancing livelihood opportunities. Under this
mission, absorption of improved technology and best practices, creation of infrastructural and
institutional framework be adopted. Sustainable or Eco farming or organic farming offers an
alternate to both high cost productivity oriented Green revolution and low cost -low
productivity prone traditional cultivation. Sustainable agriculture depends on crop rotation,
animal manure, off farm organic wastes, mechanical cultivation, mineral bearing rocks
biological pest controls to maintain soil fertility, to supply plant nutrients and to control insects,
weeds and other pests. The holistic sustainable agriculture involves exploiting fully the
integration of tree -crop- animal breeding, aqua culture and their complementarity in terms of
productivity and maintaining soil fertility.
Management Environment
Having defined these three areas of operation, the temptation is to say: OK, let's talk about
how to do it. However, there are five forces that are not necessarily under the management
control of the agribusiness firm. These five forces external to the firm's management are:
(1) economic
(2) market structure
(3) technology
(4) social
(5) political and legal
These external forces are the environment in which the management of the firm must operate.
Let's examine each of these five forces. Two major economic forces in the firm's environment
are the performance of the economy and the level of consumer confidence. Although these
two are closely related, they are not identical. The 12 performance of an economy is what is
actually happening in that economy; the level of consumer confidence is how, consumers
perceive what is happening. These two factors together have a major influence on the firm.
Whenever economic indicators are good and consumers' confidence is rising, agribusiness firm
managers can anticipate two things:
(1) total sales are likely to increase; and
(2) the types of products that consumers buy will be those more associated with prosperity.
Another area of major economic importance impacting upon management decisions in
developing countries is the degree to which supporting business services are available. In many
countries the lack of supporting services or ready suppliers can dramatically increase the span
of issues that must be dealt with by the firm's management. This limitation requires that the
management be flexible in its ability to respond.
The market structure means the number of firms, their sales
volume, barriers to entry to, or exit from, the business; and the degree of product and price
differentiation. This market structure force strongly mandates the type of .competition that the
agribusiness firm is going to confront. The third external force impinging upon agribusiness

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management is technological advances. When a new and better way is found to do something,
the old technology is phased out and the new is adopted. Agribusiness firm management must
respond to such developments. The fourth external force influencing the managers of
agribusiness firms is the social element. Two social forces are of particular concern to
agribusiness: one is shifts in social values, and the second is shifts in demographics. Although
social values change slowly, they do change. Change in social values and in demographics are of
primary importance to management's concern for the product market. The numbers and
locations of people, their ages, and their incomes are factors which provide information on
needs for food and clothing. The fifth external force Impacting on the management of the
agribusiness firm is that of the political and legal areas. These areas can be conveniently divided
into those of domestic politics and international politics. These factors exert substantial
influence upon the management of firms.
Two Viewpoints of Firm's Purpose There are two
viewpoints of an agribusiness firm's purpose which influence the management. One is the
private or firm point of view, and the other is the public or government point of view. The
private or firms perspective is more concerned with the firm's market share, return on equity or
maximizing profits. The latter perspective is concerned with either social or political issues.
These two points of view of the agribusiness firm's purpose can have a major impact upon the
type of management techniques employed. If the firm is owned, semi-owned or heavily
controlled by the government, the management objectives may be highly conditioned by that
relationship. In addition, governmental rules alone may dramatically influence the firm's
operations. The astute firm manager will have an awareness of both the public and private
perspectives. The mutual awareness of the two points of view will provide greater insight to the
agribusiness firm management.
Systems View of Decision Making Each agribusiness firm operates in an entire
commodity or commodities system. This system extends from those who supply inputs to
farmers, to the - farmers themselves, processors,- wholesalers, retailers and consumers. By
recognizing how a firm is positioned in the system and the linkages within that system,
managers can make improvements. Through the use of alternative linkages a firm may improve
the flow of its products to market. This understanding of the system within which the
agribusiness firm operates or will operate is vital to the firm's success. A major issue concerns
the purpose which the firm attempts to satisfy by the product or set of products which it
handles.- Furthermore, the firm must have management expertise in each of the three arenas
mentioned - buying inputs, production and selling the products. These must be coupled with a
management ability to coordinate all three of these activities.
Market Oriented Firm Goals
Firms tend to be production oriented or market oriented. The production oriented firm
produces a product and tries to market it. The market-oriented firm starts with consumers'
needs and then produces and markets products to fill them. The goals of the management of
such a market-oriented firm would include:
(1) Identifying market needs and demand in areas of the firm's products .

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(2) Obtaining information about segments, or parts of the market demand that have special
needs for products or services .
(3) Developing a line of products and a name for the firm that achieves market recognition .
(4) Obtaining financing for business operations and expansion .
(5) Developing a pricing strategy that will ensure reasonable profits and long-term growth .
(6) Maintaining the ability to develop marketing innovations. This approach to agribusiness
management is one that identifies the needs of customers and then develops a marketing
program to satisfy those needs. It is a market orientation.
Agribusiness Management in International Trade If the agribusiness firm in a developing
country is going to become involved in international trade then that firm's management needs
to be aware of two Principles - the principle of absolute advantage and the principle of
comparative advantage. The principle of absolute advantage is that a country will produce and
export those products which it can make for less than it would. cost to import them. The 14
principle of comparative advantage means that trade will result even if a country does not have
an absolute advantage in anything or has an absolute advantage in everything as trade occurs
largely on the basis of comparative advantage.
Export markets do not open up automatically. Opening up
a foreign market means working closely with individual importing firths. It is the business of
those importing firms either to satisfy existing demand or to develop a new demand in their
countries. If the agribusiness firm management is not experienced in international trade, they
will need training. But an agribusiness firm may participate in world trade simply by learning
(training helps) and observing. An agribusiness firm may select to enter into export sales
through the use of a broker and export marketing company engaged in world trade. The export
marketing company can-provide the expertise needed to locate potential buyers and arrange all
the details for 'shipment, insurance and collection of money.