Definition: Agribusiness is traditionally defined as the practice of farming and raising livestock for profit. Agribusiness is a broad term and can include just about any business that uses farming as part of its operation. A few common examples include beekeeping, livestock production, and aquaculture. However, the sector has rapidly evolved, most notably due to climate change and the resulting increase in extreme weather events.
Agribusiness also includes fishing and hunting of valuable animals, such as game animals, elephants, and high-value livestock; also loggers, forest managers, petroleum engineers, and coastal resource managers.
Agribusiness is one of many businesses that exist throughout the world. These businesses range from traditional family-owned farming operations to niche industrial businesses, depending on the state of the economy at the time. Agribusinesses generally operate on a yearly revenue cycle; however, this can vary widely based on the state of the economy. For example, businesses that engage in commodity trading, such as grains, can generally sustain themselves through various means. In contrast, others may experience near-term collapse due to overproduction or lower market demand for certain agricultural products.
An agribusiness is a business involved in all stages of the production processes of running agricultural operations, whether or not the operation is directly related to the production of goods for consumption. Agribusinesses may specialize in specific agricultural products or may specialize in the production of goods in general. Through their business practices and relationships with other companies, agribusinesses can ensure that agricultural production continues globally while minimizing costs in specific regions where they operate.
Agribusinesses use automation and sensors to increase efficiency. Sensor technologies have become so prevalent that they’re now standard in nearly all farm equipment, from combines to tractors. In addition to GPS, other technologies help farmers measure the quality of water and electricity flowing through their fields; monitor plant health based on data from soil sensors and cameras; alert managers when pests or diseases are on the rise. Processing Plant operates several businesses, including purchasing wheat for local farmers, distributing fertilizer to farmers in neighboring states, and buying soybeans for local feed. As processing plants are farmers’ primary customers, they have a strong interest in minimizing their costs and maximizing their profits.
Agribusinesses across many countries face a competitive bracket in the global marketplace as companies strive to establish footholds in key markets and gain a competitive edge for future growth. Global financial markets have been responsive to economic challenges faced by agricultural organizations, states, companies, and agribusinesses for their innovations in managing risk and expanding capacity through new product development, trade promotion, market intelligence, and innovation programs capacity building.
With globalization becoming an increasingly important competitive tool for countries that produce food, increasing public awareness and concern about food security has led to an increased focus by Agribusiness leaders on positioning their companies within the global marketplace. The rise of agribusiness as an industry resulted from the unforeseeable combination of events within countries over a relatively short time.
There is no silver bullet for solving the problem of agricultural subsidies. Still, there are important measures governments can take to support the sector and ensure that farmers receive a fair return for their efforts. Agribusinesses should take advantage of increased technology available to them, including satellite imagery and online marketplaces that allow farmers to send messages about prices and incentives available. Small farmers should be educated about how the market works and what incentives are available to them; they should also have access to financial services such as high-quality financial planners.