Livestock Economics, Marketing and Business Management

CONCEPTS, SCOPE AND CHARACTERISTICS OF LIVESTOCK BUSINESS

Concepts

• Livestock business includes both livestock and its products under business transaction.
• Livestock generally includes all domestic animals which are meant for human welfare.
• It includes primary activities of rearing all kinds of animals for food and other uses.
• Business of livestock and its products encomposes various activities involved in directing the resources from point of production to consumption point. It includes various forms of utilities.
• Livestock business includes all operation involved in movement of animals, raw materials and the effect of such operation on livestock farmer, middlemen / traders, butchers and consumers.
• Livestock business comprises all activities, agencies and policies involved in the procurements of all inputs by livestock producers and movement of livestock and its products from livestock farmers to consumers.
• Livestock business is the link between livestock farmers and non-farm sectors.
• Further it includes organization of all material supply to processing of finished products, their demand and policy relating to farm products.

Scope

• Livestock business in a broader sense is concerned with livestock and its products by farmers / traders and of inputs required by them in production of these animals and their products. This subject of livestock business includes product marketing as well as input marketing.
• Livestock rearing is a age old practice even before existence of agricultural farming with seed.
• Traditionally nomadic farmer reared their livestock wherever the feed and water were available.
• Now days modern animal husbandry activities attract usage of more scientific knowhow on breeding, feeding and animal health care. Modern practices are more input intensive.
• Thus the scope of livestock business includes both input and output trading.
• These are subject mater of livestock marketing includes marketing function, agencies / traders, channels, efficiency and costs, price spread, market integration, production surplus, government policy and research, training and market statistics.
• Business of livestock products is a complex process.
• It includes all the functions and processes involved in the movement of produce from livestock farmers to consumers.
• Neither producers nor consumers of livestock products are located at one place. They are spread all over the country.
• Time wise, too, the production and consumption of livestock products do not coincide.
• Moreover, farm products are produced in a form which is different from the one in which they are consumed. They move in different ways and at different places and times.
• The number and type of functions, the cost of performing these functions, the margins or profits of those who perform these functions, and the competition in the trade – all these vary from commodity to commodity, from time to time and from place to place.

Characteristics of livestock business

A good developed livestock business possess the following characteristics

• A good livestock business should provide livestock and livestock products which the consumers want and are ready to pay for.
• It should provide a wide variety of products to consumers so that they may easily choose for themselves. The variety should not be so wide as to create a confusion for him.
• No harmful products should be offered for sale in the market, precautions should be taken to protect consumers.
• Information on the presence of products in the market and their relative merits should be available to all the prospective consumers.
• There should not be any sort of pressure on the consumers to buy products from a particular trader or class of traders.
• Retailing services should be available in the market for small consumers.
• Prices should be fair and uniform for the products for all categories of consumers.
• There should not be any inefficiency or waste in the market.

Marketed and Marketable Surplus

• Marketed surplus is the actual quantity marketed in the market by the producer.
• Marketable surplus is the quantity which can be delivered by the producer to the market after his on-farm consumption. It represents the excess quantity affordable to the market and it creates the market for certain commodity.
• Marketable surplus is expressed as follows

M = Q - C

• Where M - Marketable surplus.
• Q - Out put ( Old stock + Current stock)
• C - On-farm consumption

• To understand this concept at farm level, the following example may be attempted
• A farmer has two cows each yielding 25 litres daily. His family composition is with his wife and two children. Adult members of his family consume 500ml of milk daily. But each of his children consumes 750 ml daily. What is his marketable surplus?
• His marketable surplus = 2*25- (0.500*2 +0.750*2) = 47.5 litres daily.