What is agribusiness? Various people define this term with different words, but they are all trying to explain the same thing. Agribusiness is simply the commercial sector of agriculture or the commercial sector of agricultural production. It covers different aspects such as production (allocation of human labor, crop production, livestock production, etc.), reproduction, distribution and marketing, agrochemicals and agricultural machinery as well. It involves all the steps necessary to bring an agricultural good to market.
Breaking down agribusiness
However, this term does not always correlate with the actual activities of the farms/farms. Instead, it is commonly used to refer to an agriculture-related business that is involved in the supply of agricultural inputs, such as machinery, seeds, agrochemicals, etc.
The term agribusiness is also used to describe companies/businesses that are primarily involved in the marketing activities of agricultural-related products, such as processors, wholesalers, warehouses, retailers, etc.
Agribusiness takes the different aspects of agricultural production as an integrated system. For example, farmers produce fruits and vegetables and also raise livestock using sophisticated techniques that include the use of GPS to direct harvesting operations. Processing plants are making sure to use the best methods to clean and package processed feed and livestock, while manufacturers continue to make machinery that increases efficiency on the farm.
Agribusiness performance is also greatly affected by market forces. The prevailing market forces determine the price of the products as well as the demand and supply of the same. For example, a negative change in consumer taste and preference for consuming red meat will negatively affect the price and supply of red meat. This is because there will be a drop in demand, which will cause a drop in the prices of the product. Therefore, agribusiness companies may be forced to sell their products abroad to ensure they stay in business, but if they fail to overcome the various challenges, they may soon be out of business.
Organic Agriculture vs Agribusiness
Many people use the term agribusiness in relation to large-scale commercial farming operations, but rarely use it in contrast to small-scale organic farms. in fact, small family farmers feel that they are in great commercial competition with large corporations and this makes them feel endangered and less competitive in the market.
However, the case is not true, small organic companies often use agro-industrial products, for example tractors, and do not necessarily compete with large corporate farms in the market. For example, a consumer may decide to purchase grass-fed pork from a small organic producer (because it has a higher nutrient content) compared to conventionally produced pork.
Finally, agribusiness is a dynamic and ever-changing environment and people who wish to venture into this field must be willing to learn new ways to overcome the challenges that are always prevalent in order to see success in their business.
