Archive for the ‘Agricultural Entrepreneurship’ Category

Article by Zeshan Javed
THE FARMER’S PROBLEM:

As an agricultural country in the main,we need to understand the farmer’s problem in detail like china,india and australia.we have to provide food,jobs and chances of advancement to more than70 percent of our people who live in the villages.Many of these work on their farms or on the farms rentedto them by the landowners(called landlords). The question deserve to be answerd right now.if not now,then when are we going to help our farmers and workers of The term farmer usually applies to people who do some combination of raising field crops, orchards, vineyards, poultry or other livestock. Their products might be sold either to a market, in a farmers’ market or perhaps directly from a farm. Read the rest of this entry »

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The five forces model—developed by Professor Michael Porter at the Harvard Business School—is a common and well-known step in conducting an industry analysis. It is comprised of five forces: 1) Internal rivalry between firms, 2) Threat of entry by potential competitors, 3) Presence of substitute products, 4) Power of sellers or suppliers, and 5) Power of buyers. A five forces model essentially is a process for a manager to understand how the conduct and performance of firms in an industry might be determined by changes in its structure over time.

The overall price index for U.S. farm production inputs was unchanged this March compared to a year ago. The USDA reports that price declines in fertilizers, feed, seed and chemicals were off-set by increases in fuel and machinery costs. Fertilizer prices showed the largest decline, while fuels prices increased the most from a year ago.

Compared to March 2009, the U.S. prices paid index for fertilizer was down 25.6 percent. The decrease can be attributed to a decline of 24.5 percent for mixed fertilizer, 22.4 percent for nitrogen, and 35.0 percent for potash and phosphate.

The U.S. prices paid index for fuels saw a 44.5 percent increase from March 2009. Diesel prices increased 51.0 percent, gasoline 43.2 percent, and L.P. gas 16.4 percent from the previous year. The U.S. prices paid index for feed saw a decline of 5.4 percent from March 2009. Prices fell for the following feed categories feed grains, hay/forage, complete feeds and supplements, but were up for concentrates.

Hay and forages realized the largest decrease at 15.9 percent. Feed grains were down 7.3 percent, complete feeds 5.2 percent, supplements 1.9 percent, while concentrates were 2.2 percent higher.

The national seed price index declined 6.3 percent from March of last year. Field crop seed prices were 5.9 percent lower, while grass and legume seed cost dropped 13.7 percent compared to a year ago. U.S. chemical prices were 4.6 percent lower compared to March 2009. Herbicides were down 8.3 percent, fungicides were down 0.6 percent, while insecticides were up 2.5 percent.

The U.S. prices paid index for machinery rose 2.7 percent from March 2009. The price indices both for tractors and self pro-pelled machinery were up 2.2 percent, and other machinery prices increased by 3.9 percent.

As noted earlier, farmer cooperatives have entered a number of industries including wet corn milling, soybean processing, and other oilseed processing—for example, sunflower seed processing and dry edible bean processing. However, consider breakfast cereal manufacturing. Variables such as the fixed costs of building a state-of-the art plant with the needed research and development as well as various temperature controlled facilities, strong brand preferences exhibited by many buyers, capital requirements for the research and development needed to substitute whole grains in place of previous product formulations and maintain the same or better taste profile, experience in working with wholesalers in packaging and shipping product, and experience in working with retail supermarkets in product placement, and before and after sale service are very high barriers for entering firms. It would be highly unlikely that a new firm would enter this concentrated industry except through acquisition or joint venture.

On the other hand, industries that are closer to the perfectly competitive norm of many firms with similar sizes as evidenced by a low HHI may have much smaller barriers to entry. Consider retail bakeries which have the smallest HHI at 7.2 with 7,079 firms in 2002. There are many stores that make bakery products from flour, not prepared dough, in their store and this is a fairly standardized process with few barriers to entry and low volumes.

A number of industry segments saw an increase in entrants over the 1997 to 2002 time period—rice milling; wet corn milling; cane sugar refining, caused by the divesture of individual plants by a multinational firm; beet sugar manufacturing, caused by the divesture of individual plants by a multinational firm; dried and dehydrated food manufacturing; retail bakeries, caused by more retail supermarkets putting in bakeries; and roasted nuts and peanut butter manufacturing.

Government regulation is important in food manufacturing. Food safety regulation is an obvious example. Less obvious to many consumers are regulations governing product packaging and labels. The standardized nutrition labeling information took time to implement and it is conceivable that it will undergo another change if the glycemic index is mandated for inclusion.