Agribusiness is the

industry Industry may refer to: Economics * Industry (economics), a generally categorized branch of economic activity * Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery * The wider industrial sector ...

, enterprises, and the field of study of value chains in

agriculture Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...

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 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. ...

. Agribusinesses comprise

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 Nutrient, nutritional support. Food is usually of plant, animal, or Fungus, fungal origin and contains essential nutrients such as carbohydrates, fats, protein (nutrient), proteins, vitamins, ...

and

fiber Fiber (spelled fibre in British English; from ) 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 inco ...

processing,

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

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 grounds). Commercial fisheries include wild fisheries and fish farm ...

biotechnology Biotechnology is a multidisciplinary field that involves the integration of natural sciences and Engineering Science, engineering sciences in order to achieve the application of organisms and parts thereof for products and services. Specialists ...

and

biofuel Biofuel is a fuel that is produced over a short time span from Biomass (energy), biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricu ...

enterprises and their input suppliers. Studies of business growth and performance in farming have found that successful agricultural businesses are cost-efficient internally and operate in favourable economic, political, and physical- organic environments. They are able to expand and make profits, improve the productivity of

land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of Earth not submerged by the ocean or another body of water. It makes up 29.2% of Earth's surface and includes all continents and islands. Earth's land sur ...

labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...

, and

capital Capital and its variations may refer to: Common uses * Capital city, a municipality of primary status ** Capital region, a metropolitan region containing the capital ** List of national capitals * Capital letter, an upper-case letter Econom ...

, and keep their costs down to ensure market price competitiveness. Agribusiness is not limited to farming. It encompasses a broader

spectrum A spectrum (: spectra or spectrums) is a set of related ideas, objects, or properties whose features overlap such that they blend to form a continuum. The word ''spectrum'' was first used scientifically in optics to describe the rainbow of co ...

through the agribusiness system which includes input supplies, value-addition,

marketing Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce. Marketing is usually conducted by the seller, typically a retailer or ma ...

entrepreneurship Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk (assumed by a traditional business), and potentially involving values besides simply economic ones. An entrepreneu ...

microfinancing Microfinance consists of financial services targeting individuals and small businesses (SMEs) who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; saving ...

, and

agricultural extension Agricultural extension is the application of scientific research and new knowledge to agricultural practices through farmer education. The field of 'extension' now encompasses a wider range of communication and learning activities organized for r ...

. In some countries like the

Philippines The Philippines, officially the Republic of the Philippines, is an Archipelagic state, archipelagic country in Southeast Asia. Located in the western Pacific Ocean, it consists of List of islands of the Philippines, 7,641 islands, with a tot ...

, creation and management of agribusiness enterprises require consultation with registered agriculturists above a certain level of operations,

capitalization Capitalization ( North American spelling; also British spelling in Oxford) or capitalisation (Commonwealth English; all other meanings) is writing a word with its first letter as a capital letter (uppercase letter) and the remaining letters in ...

, land area, or number of animals in the farm.

Evolution of the agribusiness concept

The word "agribusiness" is a

portmanteau In linguistics, a blend—also known as a blend word, lexical blend, or portmanteau—is a word formed by combining the meanings, and parts of the sounds, of two or more words together.

of the words ''agriculture'' and ''business.'' The earliest known use of the word was in the Volume 155 of the

Canadian Almanac & Directory Grey House Publishing is an American publisher of directories and other reference books in business, health, education and other areas. Its corporate headquarters are in Amenia, New York. It also has a Canadian office in Toronto Toronto ...

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 school, graduate business school of Harvard University, a Private university, private Ivy League research university. Located in Allston, Massachusetts, HBS owns Harvard Business Publishing, which p ...

professors, John Davis and Ray Goldberg after they published the book "''A Concept of Agribusiness''." 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 chain An agricultural value chain is the integrated range of goods and services (value chain) necessary for an agricultural product to move from the producer to the final consumer. The concept has been used since the beginning of the millennium, primaril ...

s 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 A Bachelor of Agriculture (BAgr) is an Undergraduate education, undergraduate academic degree awarded for a course or program in the field of agricultural science. The degree typically encompasses a comprehensive study of various aspects of ag ...

major in Agribusiness. The program was initially a joint undertaking with the UP College of Business Administration in Diliman, Quezon City until 1975. Jose D. Drilon of the

University of the Philippines The University of the Philippines (UP; ) is a Higher education in the Philippines#State universities and colleges, state university system in the Philippines. It is the country's national university, as mandated by List of Philippine laws, Re ...

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 A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a m ...

research institution A research institute, research centre, 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 implies natural ...

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 university, private Society of Jesus, Jesuit research university in Chicago, Illinois, United States. Founded in 1870 by the Society of Jesus, Loyola is one of the largest Catholic Church, ...

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. 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 environ ...

s emanating from the biological nature of agrifood supply chains # The role of buffer stocks within the supply chain # The scientific foundation of innovation in production agriculture having shifted from

chemistry Chemistry is the scientific study of the properties and behavior of matter. It is a physical science within the natural sciences that studies the chemical elements that make up matter and chemical compound, compounds made of atoms, molecules a ...

biology Biology is the scientific study of life and living organisms. It is a broad natural science that encompasses a wide range of fields and unifying principles that explain the structure, function, growth, History of life, origin, evolution, and ...

# Cyberspace and

information technology Information technology (IT) is a set of related fields within information and communications technology (ICT), that encompass computer systems, software, programming languages, data processing, data and information processing, and storage. Inf ...

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

oligopsony An oligopsony (from Greek ὀλίγοι (''oligoi'') "few" and ὀψωνία (''opsōnia'') "purchase") is a market form in which the number of buyers is small while the number of sellers in theory could be large. This typically happens in a m ...

# Relative

market power In economics, market power refers to the ability of a theory of the firm, 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 othe ...

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

Globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...

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 Genetic engineering techniques, technologies used to change the genet ...

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 Sustainability is a social goal for people to co-exist on Earth over a long period of time. Definitions of this term are disputed and have varied with literature, context, and time. Sustainability usually has three dimensions (or pillars): env ...

. Some agribusinesses have adopted the triple bottom line framework such as aligning for fair trade, organic, good agricultural practices, and B-corporation certifications towards the concept of

social entrepreneurship Social entrepreneurship is an approach by individuals, groups, Startup company, start-up companies or entrepreneurs, in which they develop, fund and implement solutions to social, cultural, or environmental issues. This concept may be applied to ...

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 Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created food ...

such as

pesticide Pesticides are substances that are used to control pests. They include herbicides, insecticides, nematicides, fungicides, and many others (see table). The most common of these are herbicides, which account for approximately 50% of all p ...

s, feed and

fertilizer A fertilizer or fertiliser 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 liming materials or other non-nutrient soil amendments. Man ...

s . Sometimes these stores are organized as

cooperatives A cooperative (also known as co-operative, coöperative, 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 democr ...

, 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 Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a government bodies through business administration, nonprofit management, or the political science sub-field of public administr ...

, 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 The Foreign Agricultural Service (FAS) is the United States Foreign Service#Foreign affairs agencies, foreign affairs agency with primary responsibility for the United States Department of Agriculture's (USDA) overseas programs – market develop ...

(FAS) of the U.S. Department of Agriculture,

Agriculture and Agri-Food Canada Agriculture and Agri-Food Canada (AAFC; sometimes Ag-Canada; )''Agriculture and Agri-Food Canada'' is the applied title under the Federal Identity Program; the legal title is Department of Agriculture and Agri-Food (). is the Structure of the Can ...

(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 cost In economics, a transaction cost is a cost incurred when making an economic trade when participating in a market. The idea that transactions form the basis of economic thinking was introduced by the institutional economist John R. Commons in 1 ...

s. As concern over

global warming Present-day climate change includes both global warming—the ongoing increase in global average temperature—and its wider effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes ...

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. Biofuel can be produced from plants or from agricultural, domestic ...

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 Energy security is the association between national security and the availability of natural resources for energy consumption (as opposed to household energy insecurity). Access to cheaper energy has become essential to the functioning of modern ...

, concern over

greenhouse gas emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...

from

fossil fuel A fossil fuel is a flammable carbon compound- or hydrocarbon-containing material formed naturally in the Earth's crust from the buried remains of prehistoric organisms (animals, plants or microplanktons), a process that occurs within geolog ...

s, and support from

government subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...