What is agribusiness? Various people define this term using different words but they all try to explain the same thing. Agribusiness is simply the business sector of farming or the business sector of agricultural production.it encompasses different aspects such as production (human labour allocation, crop production, livestock production etc.), breeding, distribution and marketing, agrichemicals and farm machinery as well. It involves all the necessary steps required to take an agricultural good to the market.
Breaking down agribusiness
However, this term is not always correlated with the actual farms/ farms activities. Instead, it is used to commonly mean an agriculturally-related business that is involved in the supply of farm inputs such as machinery, seeds, agrichemicals etc.
The term agribusiness is also used to describe firms/ businesses that are involved majorly in the marketing activities of agriculture-related products such as processors, wholesalers, warehouses, retailers etc.
Agribusiness takes the different aspects of agricultural production as an integrated system. Example, farmers produce fruits and vegetables and also rear livestock using sophisticated techniques including the use of GPS for to direct harvest operations. The processing plants ensure they use best methods to clean and package processed food and livestock, while the manufacturers continue to make machinery that increases efficiency in the farm.
Agribusiness performance is also largely affected by the market forces. The prevailing market forces determine the price of the products as well as the demand and supply of the same. Example a negative shift of the consumer taste and preference in taking red meat will affect negatively the price and supply of it. This is because there will be a fall in demand hence causing a fall in the prices of the product. Hence agribusiness firms may be forced to sell their products abroad to ensure that they remain in business but if they fail to overcome the various challenges they may soon be out of business.
Organic farming vs Agribusiness
Many people use the term agribusiness in relation to the large-scale commercial agricultural operations but they will rarely use the term in contrast to the small-scale, organic farms. in fact, small-scale family farmers feel that they are in a huge competition business with the large-scale corporations and this makes them feel endangered and less competitive in the market.
However, the case is not true, small organic firms often use agribusiness products e.g. tractors and are not necessarily competing with the large corporate owned farms in the market. For example, a consumer may decide to buy pastured pork from a small organic farmer (because it has a higher nutrient content) compared to the conventionally produced pork.
Finally, agribusiness is a dynamic and ever-changing environment and people who wish to venture in this field should be willing to learn new ways to overcome the ever prevailing challenges in order to see the success in their business.