Scope and Nature of Successful Agribusiness

May 6, 2023June 1, 2023 Agric4Profits

Agribusiness has a wide scope. It deals with agricultural sector and also with the portion of industrial sector, which is the major source of farm inputs like fertilizers, pesticides, machines, processing and post-harvest technologies.

Agribusiness provides a wide scope of investment opportunities which ranges from production to marketing of agricultural products and agro allied products.

General Scope of Agri-business

Our daily requirements of food and fibre products at desired place at required form and time come from efficient and hardworking of many business personnel in input, farm and food production and also in marketing them. The entire system in brief is called Agribusiness.

Agribusiness, of late, is combining the diverse commercial enterprises, using heterogeneous combination of labour, materials, capital and technology.

It is a dynamic sector and continuously meets current demands of consumers in domestic and world markets.

Agri-business establishment leads to strengtheningofinfrastructuralfacilitiesin that area, expansion of credit; raw materials supply agencies, adoption of modern technology in production and marketing of agricultural products.

Agri-business provides crucial forward and backward linkages(Vertical(Backward linkage includes supply of inputs, credit, production technologies, farm services etc. A forward linkage includes storage, processing, transportation and marketing aspects.)

Agri-business generates potential employment opportunities.

It adds value to products and thereby increases the net profits.

Scope for Agribusiness

Supply of agricultural inputs like feed and fodder, inorganic fertilizers and organic fertilizers.

Biotechnology applications in agriculture have vast scope in production of seed, bio-control agents, industrial harnessing of microbes for bakery products.

Export can be harnessed as a source of economic growth. The products line include cereals, pulses, oilseeds and oils, oil meal, spices and condiments, fruits and vegetables, flowers, medicinal plants and palm oil and so on.

At present agricultural products are rarely being processed, hence processing of agricultural products at secondary and tertiary levels presents vast opportunities in agribusiness industry.

The livestock wealth gives enormous scope for production of meat, milk and milk products, poultry products etc.

The forest resources can be utilized for production of byproducts of forestry known as Non Forest Timber Products (NFTP).

Beekeeping and apiary can be taken up on large scale.

Mushroom production for domestic consumption and export can be enhanced with improvement in the state of art of their production.

Organic farming has highest potential which will discourage the pesticide and inorganic fertilizer application and their consequences on soil, crops animals and farmers.

Seeds, hybrid and genetically modified crops, have the highest potential in the future.

Production of vegetables and flowers under greenhouse conditions can be taken up to harness the export market.

The enhanced agricultural production throws open opportunities for employment in marketing, transport, cold storage and warehousing facilities, credit, insurance and logistic support services.

Table1 shows entrepreneurial opportunities in modern day agriculture

Farming (on farm)	Product Marketing	Inputs Marketing	Processing	Facilitative
Crop Husbandry	Wholesale	Fertilizer	Milk	Research & Development
Dairy/Poultry/ Sheep and Goat	Retail	Agric. Chemicals	Fruits	Marketing Information
Piggery	Wholesale/ Retail of pigs and pork
Artisanal fishery
Aquaculture	Commission Agent	Seeds	Vegetables	Quality control
Rabbitry	Transport	Machineries	Paddy	Insurance
Olericulture (Vegetable Production	Export	Animal feed	Sugarcane	Energy
Floriculture (Flower production	Finance	Poultry hatchery	Cashew
Ornamental plants	Storage	Vet medicines	Coir
Snailery	Retail	Landscaping	Poultry
Fodder		Agric. Credit	Cattle
Sericulture		Custom service	Tannery
Agro-forestry		Bio-control units	Brewery
Beekeeping		Bio-tech units
Mushroom

Nature of Successful Agribusiness

We have learnt that agribusiness has become very competitive and complex. This is mainly 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.

The old dictum ― produces and sells has changed overtime into ― produce only what customers want‖. In fact, knowing what customers want is never simple.

Nevertheless, a farm operator/farm manager has to give proper thought to this consideration in order to make his business a successful one. The important requisites for success in agribusiness are:

Clean objectives: Determination of objectives is one of the most essential pre requisite for the success of business. The objectives should be realistic and clearly defined.

Then, all the business efforts (physical and mental) should be geared towards achieving the set objectives.

As we all know, objectives are destination points for an agribusiness. As a traveler must know where he/she is going, i.e. destination, in the same vein, business managers also must know and have the objectives at their fingertips.

Planning: In simple words, planning is a pre-determined line of action. The achievement of objectives set is to a great extent a function of the planning. This is in consonance with a common saying he who fails to plan has planned to fail.

It is said that it does not take time to do a thing but it takes time to decide what to do and how to do it.

Planning is a proposal based on past experience and present trends for future actions. In other words, it is an analysis of a problem and finding out the solutions to solve them with reference to the objective of the farm.

Sound organization: An organization is the art or science of building up systematical whole by a number of but related parts. Just as human frame is build up by various parts like heart, lever, brain, legs etc. similarly; organization of business is a harmonious combination of men, machine material, money management etc. So that all these could work jointly as one unit, i.e. the agribusiness.

Organization is, thus such a systematic combination of various related parts for achieving a defined objective in an effective manner.

Research: Consumers preferences are changing and onus lies on the entrepreneur in agribusiness to be familiar with the changes and the determinants of consumer preferences.

The knowledge of these factors is acquired through market research. Research is a systematic search for new knowledge.

Market research enable a business in finding out new methods of production, improving the quality of product and developing new products as per the changing tastes and wants of the consumers.

Finance: Finance is said to be the life-wire of any business enterprise whether agro-allied or industrially based. Finance is a tool by which productive factors (land, labor, machinery etc.) are harnessed brings together for production purpose.

Therefore, farmers and others that are involved in Agribusiness should estimate the financial demand of their enterprise and make adequate arrangement for securing the required finance for the enterprise.

Business Location: One major determinant of the success of agribusiness is the location of the business enterprise.

The effects of location on the achievement of objective of profit maximization is hinged on the fact that it determines the accessibility of the business to the source(s) of raw materials, skill and unskilled labor, nearness to market and enjoyment of both internal and external economies of scale.

Therefore, it is of utmost importance for entrepreneurs to select suitable location to site their agro-allied firms.

For instance a firm producing palm kernel oil must be located close to where there is availability of palm kernel and good road network for the conveyance of both the inputs and the product and by-product to the market.

Efficient management: Poor or inefficient management is a major reason always being attributed to business failure. It is therefore necessary for the proprietor to acquire diverse knowledge that will aid his business acumen vis-à-vis his effective and efficient management.

To bridge the areas of technical incompetency, the business man must be willing to employ well trained and technical experts.

For instance if the agribusiness is feed milling business and the proprietor is not knowledgeable in feed formulation, while learning on the job, he should employ an animal nutritionist.

One of the reasons for failure of business often attributed to as their poor management or inefficient management.

Harmonious relations with the workers: In an agribusiness organization, the farmer operator occupies a distinct place because he/she is the main living factor among all factors of production.

In fact, it is the human factor that makes the use of other non-human factors like land, machine, money etc. Therefore, for successful operation of business, there should be cordial and harmonious relations maintained with the workers/labors to get their full cooperation in achieving business activities.

In summary, agribusiness deals with agricultural and industrial sectors. There are many investment opportunities in agribusiness. These include crop and animal production; feed supplies, snailery, apiculture and so on.