Economic Characteristics of Agricultural Products

Created by

@MotivatedEveningPrimrose

Study Notes

Agricultural products are characterized by several attributes linked to their production process.
Agricultural products are often not suitable for direct consumption; they need processing.
Examples of processing include cutting, peeling, and production of wheat, sugar cane, cotton yarn, and leather products.
Agricultural products often have a large volume and low price.
This impacts transportation, storage, and handling costs.
Agricultural products are perishable; some can only be stored for limited periods at high costs.
However, some products like nutritional grains can be stored more cheaply for longer periods.
Quality varies; this variation depends on the cultivated land, the agricultural season, climate changes, and production inputs.
Defining agricultural commodity specifications is difficult over long periods.
Modern agricultural techniques, like protected crops, improved harvesting, sorting, and packaging, improve product quality consistency.

Agricultural good producers have less flexibility compared to consumer and industrial goods producers.
This inflexibility hinders their adaptation to changing circumstances.
Farmers often prefer to grow the same crops every year.

Agricultural production is characterized by high risk and uncertainties.
High fixed capital investments in agriculture can lead to high losses if farmers are forced to stop farming.
Controlling agricultural production is challenging, impacting by natural elements like climate.
Seasonality and price fluctuations lead to significant risks.
Sectors face difficulties accessing credit facilities and paying high interest rates on agricultural loans.

Farmers lack associations.
This inability limits their capacity to properly represent their grievances to the government.
Industrialists have associations that allow them to communicate concerns and seek solutions.