Agri-business-

agri-business is the sum total of all operations involved in the manufacture and
distribution of farm supplies.production activities on the farm storage,processing
and distribution of farm commodities and items made from them
Structure of agri-business

There are 3 sector-

*input supply sector-it deals with agro-based industries proving

seeds,fertilizers,feed,chemicals etc. Industries supply machinery or
equipment,implements and petroleum etc are also important in this regard

*farm sector-it comprises primary producing unit i.e farmers and agricultural
producers which are dispersed in wide geographical registration

*product sector-it deals with production and distribution of farm commodities.it

has two sub sector unorganised and organised sector

*Directing planning,organising and staffing functions are preparations for doing

the work but directing actually starts the work.it is concerned with
guiding,teaching ,motivating,actuating the workers to work efficiently.

*Controlling-It is the last function of management.it examine whether the

activities have been performed as per plan or not and compares the actual result
with the set standard

*Product inspection-it relates to the final product sent into the market.this is
done mainly to see the product sent into the market satisfies the set standard
for quality. In other words,the produce ready for sale in perfect and free of any
defect

*process inspection-it is done before product inspection. It ensures that the raw
materials,machines and equipments are of prescribed quality and mark.thus it
helps to produce a quality product on one hand and saves wastage of material
on other hand.

*Recruitment-it starts after defining job requirement of each task of the

enterprise.it is a process of obtaining interested and qualified people for working
in an enterprise

*seletion-it starts when recruitment ends.to select the suitable manpower for
the job positions available in the enterprise,use o proper selection method is
necessary.
Importance of agri-business

*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 p.h.t

*it suggest and directs the govt. And private sector for the development of sub
sector

*it contributes a good part of the national economy

FEATURE /PRINCIPLE CHARACTERISTICS OF AGRI-BUSINESS MANAGEMENT-

*Management varies from business to business depending on the kind and type
of business. It varies from basic producer to
brokers,wholesaler,processors.packagers etc.

*agri- business is very large and evolved to handle the products through various
marketing channels from producers to consumers

*management varies with several million of farmers who produce hundreds of

of foods and livestocks product

*the product of agri-business is seasonal and depends on farm production. They

deal with vagaries of nature.

*Agri-business is always market oriented.

*they are by far vertically integrated, but some are horizontally integrated and
many aree conglomerated.

*there is direct impact of govt. Programmes on the prpduction and performance

of agribusiness.

*there is very large variation in the size of agri-business,some are very

large,while many others are one person or one family organization.

Dimension of agri-business
*it deals with different components of both agricultural and industrial sector,their
interdependence and influence of one sector on other

*it deals with decision making process of farm either private or govt. In relation
to production and selling aspects

*it deals with strengths and weakness of a project and their viability in
competing enterprises

*agri-business is always market oriented

Scope of agri-business-

*our daily requirements of food and fibre products at desired place at required
form and time come from efficient and hard working of many business personnel
in input,farm and hard working of many personnel in input, farm and food
production and also marketing them.this entire system brief is called
agribusiness

*it is a dynamic sector and continuously meets current demand of consumers in

domestic and world markets

*agri business provides crucial forward and backward linkeages

*agri-business generates potential employment opportunities

*it adds value to products and thereby increases the profits

PLANNING-

Planning is a decision making process as it helps to decide what it is to be

done,how it is to be done,when it is to be done,where it is to be done,by whom it
is to be done etc.

Planning process steps-

*gathering the facts and information that have a bearing on the situation,

*analyzing what the situation is and what problems are involved?

*forecasting the future development

*setting goals,the benchmark for achieving the objectives

*preparation of various alternative plans

*developing a means of evaluating progress

Importance of planning-

*agri-business is more complex activity

*planning is essential for the business survival and development
*planning reduces risk and safeguards against uncertainity
*it helps to achieve the objectives or goals
*it improves operational efficiency of rsources
*it is most basic function of management and a requisite to other function

SIX STEPS INVOLVED IN THE PLANNING PROCESS-

*Gathering the facts and information that have a bearing on the situation

*Analyzing

*Forecasting

*setting goals

*preparation of various alternative plans

*developing a means of evaluating progress

PLANT LAYOUT-

It is the arrangement of production facilities like machinery and equipment in

the production unit or factory building.plan layout is also a strategic decision
because once the plant and equipments are erected ;it would be difficult and
costly to change the layout
Plant layout must be finalised on the basis of following factors*production technology and production mix
*efficient ,economic and uninterrupted flow of man and material
*adequate space for maintenance work
*healthy conducive layout of the plant
*proper lighting and ventilation
*proper provision for effluent disposal if necessary
*proper provision for effluent disposal if necessary.

Advantage of plan layout*increase productivity

*optimum utilization of floor space and other areas of operation like loading
*optimum investment in plant and building
*economy in material handling
*improvement in working environment.

Inventory managementInventory refers to those goods which are held for sale by the business
enterprise.
Proper inventory control help to solve the problem of liquidity and also helps to
increase proft and reduce the working capital need of the business concern.

INVENTORY TURNOVER RATIO-

Some items of are slow moving i.e , their consumption i.e their consumption is
slow and hence,capital remains locked up in such items for a long period of

time.as result, carrying cost continue to incur on such items.slow moving items
can be identified with the help of inventory turnover ratio.

*raw material turnover(in times)-value of raw material consumed/average stock

of raw material

*finished product turnover(intmes)-cost of goods sold/aversge stock of finished

goods

A high inventory turnover ratio indicates fast moving items. Fast moving items
have high demand. Therefore,adequate inventory of such items need to be
maintained to ensure uninteruped production or sale of such item.

Classification of ratio*liquidity ratio*leverage*coverage*turnover ratio and *profitability ratio

TYPES OF INVENTORY-

*inventory raw materials-

raw materials from a major into the organization.the inventory of raw materials
includes items which are to be converted to finished goods through
manufacturing process

*inventory of works process-

The work in process is that stage of the stock which is between raw materials
and finished goods

*inventory of finished goods-

These are the goods ready for the consumers

BENIFITS OF HOLDING INVENTORIES-

*avoiding loss of sales-by holding inventories a business firm can avoid sales loss
due to short supply of finished goods at times demanded by customers

*reducing operating cost

*achieving efficient production run

Project-

A project is an investment activity in the economy for the development where in

monetary resources will be spent to create capital assest to gain benifits over an
extended period of time

Characteristics of agricultural products-

*project is made up of many subjects/investments

*project increase capital intensity of farm enterprise.
*invest costs vary according to natural cond. , markets conds. And processing
conditions.
*the level of benefits may,however fluctuate from year to year due to weather
cond.

Types of agril. Projects-

*water resource developments project-these projects include irrigation

projects,ground water projects,project for land reclamation,drainage
projects,salinity prevention and flood control
*agril. Credit projects-these are called on lending projects. These projects
provide credit to the farmers for farm investment for increasing agril.
Production,raising their standard living and the economy as whole.
*Agril. Development projects-these are the projects aimed at improving farm
economy of individual and rural developments.
*Agro-industries and commercial development projects

PROJECT CYCLE PHASES-

*Concept or identification-the first stage in the cycle is to find potential projects.

In agril. Projects cost are easier to identify than benifits because the expenditure
pattern is easily visualized.
The various types of cost involved in the projects are-project costs,associated costs,primary
costs,indirect costs,real cost,and social costs.the various types of benifits-tangible and
intangible benifits.

*Formulation or preparation of the projectsThe following points are considered while formulating the projectsThe location of the projects site must be based on the analysis and technical feasibility of
the projects.
The location of the projects depend upon available physical resource,market
cond.,marketing facilities,alternative investment etc.
Technical analysis must make into consideration all aspects of technology to be used in the
project and account for all inputs of goods and service
Assessment of suitability and adequacy of natural resources in advance based on scientific
investigations.
Due consideration to be given all the organizational,social,economic aspects etc.
*APPRASIAL OR ANALYSIS- appraisal SHOULD TAKE PLACE BEFORE THE
IMPLEMENTATION OF THE PROJECTS. In the appraisal stage it is important to know

wheter the project is technically feasible acc. To the data available. The technical data for
assessing the feasibility of the project should be consistent with the info. Available in the
office of the sancationing authority of elsewhere.
*Implementation- this is the most crucial phase of the project cycle. The secret of successful
implementation depends upon the the extent of realism put into the plants drawns forehand.
It is not often common, to notice our plans getting deviated from the reality
*Monitoring- it is the timely collection and analysis of data on the progess of a projects,with
the objective of identifying constraints which impede successful implementation
*Evaluation-this is the lst phase of the project cycle . evaluation can be done several times
during the life of a project. In the evaluation process, it is impotant to see, how far the
objectives set out in the projects are achieved
AGRO BASED INDUSTRIES- agro-based industrie are those industries which have
direct/indirect link with agriculre.
Impotance of agro based industries*establishment of agro-based industries is based on the avilabilty of raw materials.
*provide rural population an opportunity for employment
*avoid wastage of perishable agril. Products.
*prevent migration of people from rural to urban areas.
*farmers could be assured of better price of their produce
Constraints*proper guidance is not available to entrepreneurs
*it involves some elements of risk taking
*change in crops/cropping pattern,
*change in var. of crop due to technological improvement
*failure of monsoon may hit the raw material supply.
Working capital managementIt is regarded as the life blood of a business,because its efficient management will lead to
success of business and its inefficient management will lead to failure of the business.
Working capital is the excess of current assets over current liabilities of a business. I9t is
otherwise called as net current assets.there are many types of working capital-net working
capital,Gross working capital,permanent working capital,temporary working capital ,balance
sheet working capital,cash working capital , negative working capital. Importance of working
capital necessary liquidity,maximisation profit,smooth functioning,increase firm value.
There are four working capital policy.Level of working capital , structural
health,circulation,liquidity

Importance of human resource management-

*human resource is the most important resource among all the resource of a
business enterprise as other resources like raw materials ,machines ,equipment
etc are used by human resource.i.e employee of the enterprise.hence,it is
essential for a business enterprise to have optimum number of efficient and
skilled manpower to carry on its operation and achieve the business objectives

*secondly,it is not desirable for a business enterprise to have shortage of

manpower as it adversely affect the business activities .similarly,it is not
desirable to have surplus of manpower as it drains out heavy financial resource
in the form of salary and wages
MANPOWER PLANNING-

it is a process by which a business enterprise ensure that it has the right number
and kind of people with appropriate skills at the right place and right time to do
enterprise work

STEPS IN MANPOWER PLANNING*Job requirement- it is concerned with the determination of the type of manpower reqd. In
the business org. It in volves conducting a job specification
*recruitment- it starts after defining job requirement of each task of the enterprise. It is a
process of obtaining interested and qualified people for working an enterprise. There are 2
source of manpower-external and internal source
*selection- selection starts when recruitment ends. To select the suitable manpower for the
job position availanle enterprise , use proper selection method is necessary
*training-training prog. Are needed to enhance the employees job related skills and
knowledge . commonly used methods of training are-on the job training,apperenticeship
training,job rotation,outside training.
*development- it refers to overall growth of the employees working in the enterprise
MARKETING SEGMENTATION-MARKET SEGMENTATION IS a marketing concept which
divides the complete market set up in to smaller subsets comprising of consumer with a
similar tste,demand and preference. A market segment is small within a large market
comprising of like minded individuals. One market segment is totally distinct from the other
segment
Benifits of markets segmentation-

*benifits the customer as well*segmentation helps in distinguishing one customer grom from
another and thereby enables him to decide which segment should form his target
markrt*helps spots the less satisfied segment and succeed by satisfying such segment.
Basic of market segmentationGeographical variables- the characterstics of the customer vary across the geographical
locations. Hence a firm need to classify its customers by rural urban origins.
Demographic variables demographic variable such as age,sex ,marital status , no. Of
child. Etc very much influence the demand of the product.
Education variables- life style of literate and illiterate is quite diff. . Moreover, the proportion
of literate population varies across different state. Hence, customers with educational
attainment can also be a sensitive basis of market segmentation.
Income variables- income of the customers provide an imp. Basis for market segmentation.
Types of market segmentation*physiographic segmentation- the basis of such segmentation is the lifestyle of the
individuals. The individuals attitude, interest,value etc help the marketers to classify them in
to small groups
*behaviouralistic segmentation- the loyalities of customers towards a particular brand help
the marketers to classify them into smaller group each group comprising of individuals
towards a particular brand.
*Geographic segmentation.
4ps of marketing*product- product refers to the goods and service offered by the organisation . products are
purchased because the satisfy one or more of our needs . we are paying not for the
tangible product but for the benefit it will provide. So in simple words , products can be
described as a bundle of benifits which a marketer offer to a consumer for a price.
*price- price is the amount charged for the product of a service. It is the second most
important elements in the marketing mix. Fixing the price of product is a tricky job.
*place- goods are produced to be sold to the consumers. They must be made available of
the consumer at a place where the can conveniently make purchase.
*promotion- if the product is manufacture keeping the consumers nneds in mind, is rightly
priced and made available at outlets convenient to them but the consumer is not made
aware about its price, feature ,availability etc.
controlling: Controlling is the process of influencing the performance or executing the supervision,
so that the results of organizational efforts will reach the expectations.

Massie stated four essential elements of control as follows:

* A pre-determined criterion / goal / benchmark.* A means of measuring current activity
quantitatively, if possible.* A means of comparing current activity with a prefixed criterion.
Control does not mean restriction of power over subordinates. Control system sounds a

warning when necessary for taking up remedies for problems. Workers in general make mistakes, so
the plans finally could not be executed according to schedule. Then there will be great need for
having control system to set right the things. Through proper controlling, managers would become
aware of weak spots in organizational, directional and co-ordinating efforts and operations of the
business.

Balance sheet:
It is a statement of financial position of a firm at a particular point of time. From an analyst
point of view, it is a written representation of resources and liabilities of the
business firm. It shows the financial condition of the business firm at a given date (particular
point of time). The balance sheet contains information on assets, liabilities and net worth of a
firm. Assets must always equal the sum of liabilities and net worth. What is owned by or
owed to firm (assets) must equal what the firm owes to its creditors plus what is owed to its
owners (net worth). Balance sheet indicates the sources from which business obtained capital
for its operations and the form in which that capital is invested on a specific date. Net worth
represents owners equity in the business.
Income statement:
It is also called profit-loss statement. It shows firms earnings for the period covered, usually
half yearly or yearly.
It is also called profit and loss statement. It states the source of firms incomes, describes the
nature of the expenses, and shows the net profit earned (or net loss incurred) during
anaccounting period. It is supporting evidence to balance sheet, in the sense, that it explains
the change in retained earnings on the balance sheet.Income statements show the results of
operating during those accounting periods. They arealso prepared using the Generally
Accepted Accounting Principles (GAAP) and containspecific revenue and expense categories
regardless of the nature of the company.
ProjectProjects are the building blocks of investment plan.The whole complex of activities in the
undertaking that uses resources to gain benefits constitutes the agricultural project.An
agricultural project is an investment activity in which financial resources are expended
to create capital assets that produce benefits over an extended period of time.
Financial plan-a financial plan reflects the financial need of the business and its
arrangement i.e source of finance

Working capital-it working capital may also be defined as total current assets
employed before operating the business.it is called gross working capital.

BALANCE SHEETIt is a statement of financial position of a firm at a particular point of time.

Assests-it include anything that the business firm actually owns.assets that are
own to the business firm are referred to as accounts receivables

Liabilities-libalities are money or goods acquired individuals,and/or other

business farm

Current Assets include anything that companies can quickly monetize. Such current
assets include cash, government securities, marketable securities, accounts receivable,
notes receivable, inventories, prepaid expenses, and any other item that could be
converted into cash with in one year in the normal course of business.