Agribusiness has grown and translated from farming to all businesses that is agro-based, that requires stakeholders to know the nitty-gritty of the business and the requirements for a successful agribusiness in less developed countries.
Definition and Origin of Agribusiness
Agribusiness is the sum total of all operations involved in the manufacture and distribution of farm supplies, production activities on the farm, storage, processing and distribution of farm commodities and items made from them.
John H. Davis of Harvard University first used the term agribusiness in 1955. In 1980s it was given three connotations:
Synonymous with term agriculture,
Synonymous with agricultural economics and
A modified concept of agriculture, excluding farming, or the off- farm aspects of agriculture.
At present, agribusiness is defined as all business enterprises that sells to farmers/traders/ consumers. The transaction may involve either an input or a product or service and encompasses items such as:
Productive resources (feed, seed, fertilizer, equipment, energy, pesticides, machinery, etc.)
Agricultural commodities – (raw and processed commodities of food and fibre)
Facilitative services (credit, insurance, marketing, storage, processing, transportation, packing, distribution, consultancy, soil testing etc.).
Sectors of Agribusiness
Agri-business involves three sectors:
Input sector: It deals with the supply of inputs required by the farmers for raising crops, livestock and other allied enterprises. These include seeds, fertilizers, chemicals, machinery and fuel.
Farm sector: It aims at producing crops, livestock and other products.
Product sector: It deals with various aspects like storage, processing and marketing the finished products so as to meet the dynamic needs of consumers.
Therefore, Agribusiness is sum total of all operations or activities involved in the business of production and marketing of farm supplies and farm products for achieving the targeted objectives.
Read Also: Concepts of Agribusiness Management and Its Elements
Importance of Agri-business
It deals with agricultural sector and also with the portion of industrial sector, which is the major source of farm inputs like fertilizers, pesticides, machines, processing and post-harvest technologies.
It suggests and directs the government and private sectors for development of sub sectors.
It contributes a good part of the national economy.
Dimensions of Agri-business
It deals with different components of both agricultural and industrial sector, their interdependence and influence of one sector on other.
It deals with decision making process of farm either private or government relation to production and selling aspects.
It deals with strengths and weaknesses of a project and thereby their viability in competing enterprises.
Agri-business is always marketoriented.
Structure of Agri-business is generally vertical and it comprises the following
Govt. policies and programmes regarding raising of crops or taking enterprises etc.
Research and extension programmes of the government.
Farm supplies or inputs
Agricultural production
Processing
Marketing of agricultural products
In summary, agribusiness is the sum total of all operations or activities involved in the business of production and marketing of farm supplies and farm products. Agribusiness contributes significantly to growth and development of national economy.
