Farming is business and a farm can be defined as an economic unit engaged in the production and sale ofagricultural products for maximum profit. A farm may have crops or livestock or both. A farm with both cropsand livestock is called a mix farm. In agriculture a farmer has to decide how much to produce and how toallocate resources to obtain high yields and maximum profit. To do this the production process is necessary.The farmer must understand the likely demand for the commodity and the way in which it is marketed.(1) Production: this is a planned economic activity incorporating several inputs; it focuses on the manufactureof goods and the provision of a number of services. The aim of production is to satisfy people’s wants.Types of ProductionProduction can be;(a) Primary / extractive: this refers to goods or raw materials which are extracted from the earth and can beconsumed as primary products e.g., forestry, fishing, agriculture.(b) Secondary (manufacturing): this involves the processing of raw materials into semi finish or finish goodse.g. sugarcane to rum or cocoa into chocolate. There is also secondary (construction) where materials areproduced for building purposes.Goods: are defined as tangible items that are used to satisfy needs and wants. Good s can be:(a) Capital goods: these are items that are used over and over in the production process and include a tractor,dairy herd, fork, spade, cutlass etc.(b) Luxury goods: provides enjoyment and act as a status symbol and includes big screen television and sportscars etc.(c) Consumable goods: goods which are essential for human nutrition and include food stuffs.Services: are defined as intangible items that are used to satisfy needs and wants. Services can be:(a) Commercial services: such as those provided by agri-supply stores and livestock depots.(b) Technical services: such as those provided by extension officers and agri-teachers.(c) Professional services: such as those provided by agricultural consultants and veterinarians.(2) Consumption: This is an economic, consumer centered activity. It involves the purchase and use of goodsand services by consumers. Consumption normally comes after production and marketing. Consumption is thefuel which keeps the economic engine of production running.2 | PageConsumption pattern varies and some factors which contribute to decision making by consumers are:(a) Income level: Consumers want to obtain goods and services at the lowest cost as such they purchase goodsand services which they can afford. People on low incomes are limited in terms of the quantity and the form ofproduct they can purchase and vice versa.(b) Satisfaction of needs: Consumers choose goods and services which satisfy their tastes and convenience.Consumers buy products that are easy to use, prepare and which meet their nutritional and health needs.(c) Religious reasons: Some consumers do not buy certain foods such as pork and beef due to their religiousbeliefs.(d) Health concerns: More consumers are becoming health conscious and avoid buying foods which containhigh amounts of cholesterol and saturated fats.(e) Aesthetic feature: Product features such as design, presentation, color, taste and general appearance appealto consumers’ increasing consumption of those products.(f) Product substitute: knowledge of product substitutes and their availability might enable some consumers tomake compromises and choose alternative goods and services.(3) Marketing: this is the link between production and consumption. It incorporates several business activitiesin a coordinated way to promote the flow of goods and services from the point of production until they finallyreach the consumer. The aim is to get the products to the right consumers at the right time and in the right place.This is materialized by what is called a distribution channel. There are various distribution channels movingproducts from producers to consumers.Marketing functions vary in complexity, depending on the nature of the products, quantity produced and thecharacteristics of the market. The main functions include; merchandising (buying, selling and pricing), handling(transportation, grading, assembling, storage), processing (manufacturing, packaging, labeling), supporting(standardizing, financing, risk bearing, market intelligence).