Agribusiness Definition

Agribusiness Definition: Understanding, Examples, Diagram

What is Agribusiness?

Agribusiness is the sum total of all operations involved in the manufacturing and distribution of farm supplies; production operations on the farm, the storage processing, and distribution of farm commodities and items made from them.

Agribusiness is just the name implies – agriculture in business. The agricultural process has changed a lot and also changing continuously. Now, agriculture is changing from mere farming to a technology-oriented industry comprising of production, value addition, distribution, Agriscience, market research, profit, etc. Agribusiness is the industry that encompasses all.

Agribusiness was termed by two Harvard Economist John Davis and Ray Goldberg in 957.

Factors that affect agribusiness

Climate Change

Agriculture is extremely vulnerable to climate change. Higher temperatures eventually reduce yields of desirable crops while encouraging weed and pest proliferation.

The environment is the most important factor in agriculture. Technology has changed the pattern and procedure of agriculture but still, most of the farmers depend on favorable environmental conditions and climatic patter like rainfall, heat, soil, weather conditions.

Over the next 35 years, environmental problems associated with agriculture will be more serious. By 2030, climate change is projected to depress cereal production in Africa by 2 to 3 percent.

Use of Technology

Bioscientists have developed methods and equipment that have a significant impact on agribusiness. The use of technology, particularly biotechnology has developed gene cloning, hybrid seed, growing plant in unfavorable conditions. To increase yields and reduce costs, farmers are using a wide variety of new machines that optimize inputs to agricultural production.

Drones are helping farmers to scan fields, monitor crops, seeding, and analyze plant health, among others. Its advanced imaging sensor can capture highly accurate images of the field, which expose everything from irrigation problems to soil variation, pests, and fungal infestations by seeing crops from the air.

Why Agribusiness growing?

In 2019, in the US, 22.2 million full- and part-time jobs were associated with the agricultural and food sectors, which constitutes 10.9 percent of total U.S. employment.

According to the World Bank, the world needs to produce 50% more food to feed 9 billion people by 2050. There is an urgent need for research and development to find new ways to feed people, produce more food with fewer resources.

This urgency will promote agribusiness industry’s growth in both developed and developing countries.

Agribusiness Sectors

  1. Input Sector

2. It deals with the supply of inputs required by the farmers for raising crops, livestock, and other allied enterprises, these include seeds, fertilizers chemicals machinery, and fuel.

3. Farm Sector

It aims at producing crops, livestock, and other products.

4. Product sector

This sector manages various works including storage, processing, and marketing the finished products as to need the dynamics needs of consumers.

Agribusiness industry and allied sectors

  1. Dairy business

A dairy is a business enterprise for the production and processing of animal milk – mostly from cows or buffaloes, and also from goats, sheep, horses, or camels. A dedicated farm is built for rearing animals and harvesting minks for human consumption.

2. Aquaculture business

Aquaculture is the farming of fish and other aquatic animals in a controlled condition for the purpose of profit. Aquaculture involves cultivating freshwater and saltwater populations, like fish, crustaceans, mollusks, aquatic plants, algae, and other organisms.

3. Beekeeping

Beekeeping also called apiculture is the production and maintenance of bee colonies in a defined system for collecting honey, by humans.

4. Agrotourism

Farms that offer entertaining activities to visitors for the source revenue, like, visiting a working farm or ranch for the purpose of enjoyment or education purpose.


How Agribusiness Works [Diagram]

how agribusiness works


Agribusiness is characterized by very large production units and considerable vertical and horizontal integration. For example, a firm producing frozen vegetables set up contracts with farmers and also owns the company which provides their contract labor and sells them fertilizer.

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