The Roles of Consumers in Agriculture/ Agribusiness

Post a Comment


Alt: = "photo showing a lady selecting agricultural food items at the grocery"

Introduction

As they say in business, “customer is king”. Every business operates with consumers in mind. Consumers play major roles in development and sustainability of agriculture and agribusiness. Consumers choice is always aggregated in every business decision-making process starting from what to produce or sell to where to produce it, method to adopt, quality and quantity to produce and the price to sell, because consumers have the choice to decide on which product to buy, the quality and quantity, when and where to buy them, and at what price. 

The Roles of Consumers in Agribusiness Development and Sustainability

What to Produce/ Sell

Despite market distortions, consumers, to a large extent, decide on which goods to spend their money, and when and where to buy them.

Understanding the factors that influence consumers motivation for buying sustainable agricultural products would provide producers and policy-makers better information to improve economic development and the growth of the farmers products. . As a producers, who wouldn’t want to produce what no one would want to buy, or as a marketer, you wouldn’t want to sell what no one would want to be. The product to produce or sell is not about you, rather, about the consumer. Your own interest is profit.

People’s cultural values that influence people’s choice of agricultural practices, food choice plays  roles in agribusiness. For instance, if a particular kind of crop or animal is not eaten or not allowed to be grown in a particular culture, such agribusiness will not take place in such community.

The supper retail stores in the agricultural value chain also play significant roles as they detect to the producers and suppliers what agricultural food they sell in their stores and what prices they are will to pay to the producers and suppliers. Super-chain stores and restaurants like Walmart, Amazon, Shoperite, McDonald, etc to some extent determine what the producers produce because they relate with consumers and know what the consumers want, or products they (super stores) think can sell on premium prices to  get high return on investment. In such cases, the farmers, processors have no choice than to satisfy the wants of the consumers.

Site Selection

Consumers play major role in agribusiness site selection. The two main factors are market proximity and environment concerns.

Market proximity: One of the factors to consider before choosing a location for agricultural value chain business is closeness to market. Market here means the consumers. You have to locate your farm or store where the buyer can easily access your farm or store. It could also mean open market like the farmers where you can easily go and sells your produce. Farm produce are perishable good with short shelf life — the crops and fish begin to depreciate in value as soon as they are harvested. Farm produce like  fishes are vulnerable to tissues decomposition and microbial spoilage because they begin to depreciate as soon as they are harvested from the water. 

Environment Concern: The public concerns like environment and health concerns have great influence on agricultural production business sitting. Agribusinesses are facing serious scrutiny from the consumer public with growing environment concerns. Agricultural sustainability is all about the environment. Economic development is also all about the environment — making sure that people get good living, making sure people can afford food.

Method of Production

Consumers now question not only where and how (type of practices) food is grown and their impacts on the environment, but also how they can benefit. Consumers are concerned if maintaining their standards of living while maintaining the natural resource base will not pollute the environment. Agribusinesses have to respond to this  consumers concern by greening some of their operations and practices.

Public interest (who are the consumers) over the environmental sustainability has also moved modern food industry to adopt environment friendly methods of farming and food production. Smart agricultural practices in place today were occasioned by environmental activism by consumer public. Consumers concerns have led to researches on new ways of farming. Hydroponic, greenhouse farming techniques were adopted to address consumers’ concerns, for friendly environmental ecosystem and to increase production to meet up the demands of the ever growing consumer population.

The adoption of aquarium/ fish pond in fish production as against fishery from seawater, was a response to environment concern and to produce qualitative and quantitative fish for the consumer population.

Quality

Consumers decide on the quality of food they purchase, and by extension, the quality of food to be produced. Some consumers may want freshly produced farm crops, while others want processed and well packaged products

They are concerned on food safety. Food safety laws and regulations were promulgated to address the consumers concerns and to protect their interest on food quality, safety and wholesomeness that are related to consumers health especially hygienic standards and nutritional value that directly affect consumers health. Consumers usually demand for nutritional information of food product before purchasing. In response to this demand, food companies, therefore, have to provide nutritional information on the label of agricultural food commodity.

Quantity

Agricultural supplies must be according to demand. Demand and supply theory often drive agribusiness. When patronage is low supply quantity will reduce. If the agribusiness man fails to adopt this, he will run in to large inventory, which will automatically lead to loss. Most agricultural products have short shelf life especially the freshly produced food crops, and would require timely sale off. Therefore, production quantity should be according to the number of consumer population and their purchasing power.

Where to Sell

In agricultural marketing its either the consumers come the farmers to buy or the farmers go to the consumers to sell. Most times consumers determine the where the meeting point (market) should be. Geography and demographics of the consumers determine where the market will be. For instance the consumers in the urban areas may prefer to buy in the grocery stores. While those in  rural areas will prefer to buy in the farmers market or farm gate since they are close to the farms. In other words, consumers determine the agricultural marketing channels agro enterprise will adopt.

Agriculture is the source for food and nourishment to humans. Agribusiness is any business enterprise that ensures that humans have access to agricultural food, keeping profit making in mind.

Price

Alt: = "photo of a lady looking at food items in a food store"


Consumers plays major role in agro products pricing. Consumers or customers decide on which product to buy, and most times at what price to buy them.  There are some  consumers who  want premium quality products at any given price, while there are some who want good quality products which satisfy their needs at affordable prices. Consumers behavior drives the products prices and pricing techniques to adopt the agribusinesses. Most agribusiness retail stores adopt products line pricing strategy to offer something to different classes of consumers. If you are a retail store owner, you must have observed people looking at the price tags before making the purchase decision.




Related Posts

Post a Comment