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 ...
in
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 ...
s,
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 ...
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)
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 ...
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 ...
"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 ...
to
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
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 ...
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)
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 ...
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 ...
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
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 ...
have been mandated by law.
See also
*
Agrarian law
Agrarian laws (from the Latin ''ager'', meaning "land") were laws among the Romans regulating the division of the public lands, or ''ager publicus''. In its broader definition, it can also refer to the agricultural laws relating to peasants and hu ...
Agricultural machinery industry
The agricultural machinery industry or agricultural engineering industry is the part of the industry, that produces and maintain tractors, agricultural machinery and agricultural implements used in farming or other agriculture. This branch is cons ...
*
Agricultural marketing
Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. These services involve the planning, organizing, directing and handling of agricultural produce in such a way as to satisfy farm ...
Agroecology
Agroecology (US: a-grō-ē-ˈkä-lə-jē) is an academic discipline that studies ecological processes applied to agricultural production systems. Bringing ecological principles to bear can suggest new management approaches in agroecosystems. The ...
*
Animal–industrial complex
The term animal–industrial complex (AIC) refers to the systematic and institutionalized exploitation of animals. It includes every economic activity involving animals, such as the food industry (e.g., meat, dairy, poultry, apiculture), anima ...
*
Biofuel
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 ...
Energy crop
Energy crops are low-cost and low-maintenance crops grown solely for energy production by combustion (not for food). The crops are processed into solid, liquid or gaseous fuels, such as pellets, bioethanol or biogas. The fuels are burned to g ...
*
Environmental impact of agriculture
The environmental impact of agriculture is the effect that different farming practices have on the ecosystems around them, and how those effects can be traced back to those practices. The environmental impact of agriculture varies widely based on p ...
*
Factory farming
Intensive animal farming or industrial livestock production, also known by its opponents as factory farming and macro-farms, is a type of intensive agriculture, specifically an approach to animal husbandry designed to maximize production, while ...
*
Industrial agriculture
Industrial agriculture is a form of modern farming that refers to the industrialized production of crops and animals and animal products like eggs or milk. The methods of industrial agriculture include innovation in agricultural machinery and far ...