Agribusiness is the industry, enterprises, and the field of study of

value chains Value or values may refer to: Ethics and social * Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them ** Values (Western philosophy) expands the notion of value bey ...

agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...

and in the bio-economy, in which case it is also called bio-business or bio-enterprise. The primary goal of agribusiness is to maximize profit while sustainably satisfying the needs of consumers for products related to

natural resources Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. O ...

such as

biotechnology Biotechnology is the integration of natural sciences and engineering sciences in order to achieve the application of organisms, cells, parts thereof and molecular analogues for products and services. The term ''biotechnology'' was first used b ...

farm A farm (also called an agricultural holding) is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production. The name is used fo ...

food Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is inge ...

forestry Forestry is the science and craft of creating, managing, planting, using, conserving and repairing forests, woodlands, and associated resources for human and environmental benefits. Forestry is practiced in plantations and natural stands. Th ...

fisheries Fishery can mean either the enterprise of raising or harvesting fish and other aquatic life; or more commonly, the site where such enterprise takes place ( a.k.a. fishing ground). Commercial fisheries include wild fisheries and fish farms, both ...

fuel A fuel is any material that can be made to react with other substances so that it releases energy as thermal energy or to be used for work. The concept was originally applied solely to those materials capable of releasing chemical energy but ...

, and

fiber Fiber or fibre (from la, fibra, links=no) is a natural or artificial substance that is significantly longer than it is wide. Fibers are often used in the manufacture of other materials. The strongest engineering materials often incorporate ...

— usually with the exclusion of

non-renewable resource A non-renewable resource (also called a finite resource) is a natural resource that cannot be readily replaced by natural means at a pace quick enough to keep up with consumption. An example is carbon-based fossil fuels. The original organic mat ...

s such as

mining Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...

. Studies of business growth and performance in farming have found successful agricultural businesses are cost-efficient internally and operate in favorable economic, political, and physical-organic environments. They are able to expand and make profits, improve the productivity of land, labor, and capital, and keep their costs down to ensure market price competitiveness. Agribusiness is not limited to farming. It encompasses a broader spectrum through the agribusiness system which includes input supplies, value-addition,

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...

entrepreneurship Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values th ...

microfinancing Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...

, and agricultural extension. In some countries like the

Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...

, creation and management of agribusiness enterprises require consultation with registered agriculturists above a certain level of operations, capitalization, land area, or number of animals in the farm.

Evolution of the agribusiness concept

The word "agribusiness" is a

portmanteau A portmanteau word, or portmanteau (, ) is a blend of wordsCanadian Almanac & Directory published in 1847. Although most practitioners recognize that it was coined in 1957 by two

Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA p ...

professors, John Davis and Ray Goldberg after they published the book "''A Concept of Agribusiness''."

"Agribusiness is the sum total of all operations involved in the manufacture and distribution of farm supplies; production operations on the farm; and the storage, processing, and distribution of farm commodities and items made from them." (Davis and Goldberg, 1956)

Their book argued against the New Deal programs of then U.S. President Franklin Roosevelt as it led to the increase in agricultural prices. Davis and Goldberg favored corporate-driven agriculture or large-scale farming to revolutionize the agriculture sector, lessening the dependency on state power and politics. They explained in the book that vertically integrated firms within the agricultural value chains have the ability to control prices and where they are distributed. Goldberg then assisted in the establishment of the first undergraduate program in agribusiness in 1966 at the UP College of Agriculture in Los Baños, Philippines as

Bachelor of Science in Agriculture The Bachelor of Science in Agriculture (BSAg) or the Bachelor of Agriculture (BAg) is the undergraduate academic degree awarded by tertiary faculty of agriculture. The program is typically four years of study at postsecondary level. In Canada, th ...

major in Agribusiness. The program was initially a joint undertaking with the UP College of Business Administration in

Diliman, Quezon City Quezon City (, ; fil, Lungsod Quezon ), also known as the City of Quezon and Q.C. (read in Filipino as Kyusi), is the List of cities in the Philippines, most populous city in the Philippines. According to the 2020 census, it has a populatio ...

until 1975. Dr. Jose D. Drilon of the

University of the Philippines The University of the Philippines (UP; fil, Pamantasan ng Pilipinas Unibersidad ng Pilipinas) is a state university system in the Philippines. It is the country's national university, as mandated by Republic Act No. 9500 (UP Charter of 200 ...

then published the book "''Agribusiness Management Resource Materials''" (1971) which would be the foundation of current agribusiness programs around the world. In 1973, Drilon and Goldberg further expanded the concept of agribusiness to include support organizations such as governments,

research institution A research institute, research centre, research center or research organization, is an establishment founded for doing research. Research institutes may specialize in basic research or may be oriented to applied research. Although the term often im ...

s, schools, financial institutions, and cooperatives within the integrated Agribusiness System. Mark R. Edwards and Clifford J. Shultz II (2005) of

Loyola University Chicago Loyola University Chicago (Loyola or LUC) is a private Jesuit research university in Chicago, Illinois. Founded in 1870 by the Society of Jesus, Loyola is one of the largest Catholic The Catholic Church, also known as the Roman Cathol ...

reframed the definition of agribusiness to emphasize its lack of focus on farm production but towards market centricity and innovative approach to serve consumers worldwide.

"Agribusiness is a dynamic and systemic endeavor that serves consumers globally and locally through innovation and management of multiple value chains that deliver valued goods and services derived from sustainable orchestration of food, fiber and natural resources." (Edwards and Shultz, 2005)

In 2012, Thomas L. Sporleder and Michael A. Boland defined the unique economic characteristics of agribusiness supply chains from industrial manufacturing and service supply chains. They have identified seven main characteristics: #

Risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...

s emanating from the biological nature of agrifood supply chains # The role of

buffer stock Safety stock is a term used by logistics, logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts (shortfall in raw material or packaging) caused by uncertainties in supply and demand. Adequate safety stock ...

s within the supply chain # The scientific foundation of innovation in production agriculture having shifted from

chemistry Chemistry is the science, scientific study of the properties and behavior of matter. It is a natural science that covers the Chemical element, elements that make up matter to the chemical compound, compounds made of atoms, molecules and ions ...

biology Biology is the scientific study of life. It is a natural science with a broad scope but has several unifying themes that tie it together as a single, coherent field. For instance, all organisms are made up of cells that process hereditary i ...

# Cyberspace and

information technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...

influences on agrifood supply chains # The prevalent market structure at the farm gate remains oligopsony # Relative

market power In economics, market power refers to the ability of a firm to influence the price at which it sells a product or service by manipulating either the supply or demand of the product or service to increase economic profit. In other words, market powe ...

shifts in agrifood supply chains away from food manufacturers downstream to food retailers #

Globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...

of agriculture and agrifood supply chains In 2017, noting the rise of

genetic engineering Genetic engineering, also called genetic modification or genetic manipulation, is the modification and manipulation of an organism's genes using technology. It is a set of technologies used to change the genetic makeup of cells, including t ...

and

in agriculture, Goldberg further expanded the definition of agribusiness which covers all the interdependent aspects of the food system including medicine, nutrition, and health. He also emphasized the responsibility of agribusiness to be environmentally and socially conscious towards

sustainability Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...

"Agribusiness is the interrelated and interdependent industries in agriculture that supply, process, distribute, and support the products of agriculture." (Goldberg, 2017)

Some agribusinesses have adopted the triple bottom line framework such as aligning for

fair trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and enviro ...

organic Organic may refer to: * Organic, of or relating to an organism, a living entity * Organic, of or relating to an anatomical organ Chemistry * Organic matter, matter that has come from a once-living organism, is capable of decay or is the product ...

good agricultural practice Good agricultural practice (GAP) is a certification system for agriculture, specifying procedures (and attendant documentation) that must be implemented to create food for consumers or further processing that is safe and wholesome, using sustaina ...

s, and B-corporation certifications towards the concept of social entrepreneurship.

Agribusiness System

Inputs Sector

Agricultural supplies

An agricultural supply store or agrocenter is an agriculturally-oriented shop where one sells agricultural supplies—inputs required for agricultural production such as

pesticide Pesticides are substances that are meant to control pests. This includes herbicide, insecticide, nematicide, molluscicide, piscicide, avicide, rodenticide, bactericide, insect repellent, animal repellent, microbicide, fungicide, and lampri ...

s, feed and

fertilizer A fertilizer (American English) or fertiliser (British English; see spelling differences) is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from ...

s . Sometimes these stores are organized as

cooperatives A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...

, where store customers aggregate their resources to purchase agricultural inputs. Agricultural supply and the stores that provide it are part of the larger Agribusiness industry.

Agricultural labor

Irrigation

Seeds

Fertilizers

Production Sector

Farming

Farm Mechanization

Processing Sector

Primary Processing

Secondary Processing

Marketing Sector

Farmers' Market

Support Sector

Education

Cooperatives

Governments

Professionals

Studies and Reports

Studies of agribusiness often come from the academic fields of

agricultural economics Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food and fiber products. Agricultural economics began as a branch of economics that specif ...

and management studies, sometimes called agribusiness management. To promote more development of food economies, many government agencies support the research and publication of economic studies and reports exploring agribusiness and agribusiness practices. Some of these studies are on foods produced for export and are derived from agencies focused on food exports. These agencies include the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture, Agriculture and Agri-Food Canada (AAFC), Austrade, and New Zealand Trade and Enterprise (NZTE). The Federation of International Trade Associations publishes studies and reports by FAS and AAFC, as well as other non-governmental organizations on its website. In their book ''A Concept of Agribusiness'', Ray Goldberg and John Davis provided a rigorous economic framework for the field. They traced a complex value-added chain that begins with the farmer's purchase of seed and livestock and ends with a product fit for the consumer's table. Agribusiness boundary expansion is driven by a variety of transaction costs. As concern over

global warming In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...

intensifies,

biofuels Biofuel is a fuel that is produced over a short time span from biomass, rather than by the very slow natural processes involved in the formation of fossil fuels, such as oil. According to the United States Energy Information Administration (E ...

derived from crops are gaining increased public and scientific attention. This is driven by factors such as oil price spikes, the need for increased energy security, concern over

greenhouse gas emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and lar ...

from

fossil fuel A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels m ...

s, and support from

government subsidies A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...

. In Europe and in the US, increased research and production of

have been mandated by law.