1.2. Characteristics of Agricultural Product

Agricultural products differ in nature and contents from industrial goods in the following respects.

♤ Agricultural products tend to be bulky and their weight and volume are great for their value in comparison with many industrial goods.

♤ The demand on storage and transport facilities is heavier, and more specialized in case of agricultural products than in the case of manufactured commodities.

♤ Agricultural commodities are comparatively more perishable than industrial goods. Although some crops such as rice and paddy retain their quality for long time, most of the farm products are perishable and cannot remain long on the way to the final consumer without suffering loss and deterioration in quality.

♤ There are certain agricultural products such as mangoes and grapes which are available only in their seasons but this condition of seasonal availability is not found in the case of industrial goods.

♤ Agricultural produce is to be found scattered over a vast geographical area and as such its collection poses a serious problem. But such is not condition in the case of industrial goods.

♤ There are various kinds and varieties in farm produce and so it is difficult to grade them.

♤ The farmers especially in countries like India have low holding-back. Therefore he has to sell

his produce immediately after the harvest at whatever price he can fetch because of his pressing needs.

♤ Finally, both demand and supply of agricultural products are inelastic. A bumper crop, without any minimum guaranteed support price from the government may spell disaster for the farmer. Similarly the farmer may not really be in a position to take advantage of shortages or deficit crop. These benefits may pass on only to the middleman.