Agribusiness is a type of agricultural economics that involves agricultural production through the use of the latest agricultural biotechnology techniques. The agribusiness activities include crop production, animal husbandry, and agriculture, livestock farming, organic farming, digital farming or farm equipment and supplies, agricultural processing and supply, farm machinery sales and horticulture marketing. Any person involved in the food and supply chain in small scale agribusiness and agribusiness development is a critical part of the agribusiness startups and business systems.
Agriculture industries usually refer agribusiness to all the activities that are involved in urban agriculture and agricultural crop production as well as smart agriculture and regenerative agriculture which is done through crop production and management. Various courses are offered which specialize in international agribusiness, agribusiness, agribusiness departments, agribusiness economics, and agribusiness management. Agribusiness management defines agribusiness as the specialization of each agricultural element in agricultural crop production and management as well as agricultural distribution.
There are different agribusiness examples of international agribusiness companies and they include Tyson’s foods agribusiness, KDC agribusiness, Ray Goldberg agribusiness, Agribusiness Wiley, and BCG agribusiness. Financial agribusiness 2019 reports indicated that the top 10 agribusiness companies in the world include BSC agribusiness, PWC agribusiness, ABSA agribusiness, IFC agribusiness, Bizna agribusiness, Safaricom agribusiness, Srix agribusiness academy, NBS agribusiness, Cargill agribusiness, and CBA agribusiness.
An agribusiness development center is a place where most farmers in the agribusiness sector meet and exchange ideas on agribusiness and rural development and share ideas on agribusiness for Africa’s prosperity. E-commerce in agribusiness refers to the use of business activities such as marketing and advertising in establishing a target audience for the demand and supply of agricultural crops. These activities may include the following;
- Use of agribusiness online services
- Use of agribusiness website for marketing,
- Establishing African fertilizer and agribusiness partnerships with other firms
- International agribusiness for a global perspective in fostering positive relations
- Use of marketing strategies for a successful agribusiness process
- Use of agribusiness Whatsapp group in marketing
Basics of Agribusiness
The following are the basic guidelines of a successful agribusiness;
- International best practice: It is important to use the best practices in farming such as modern agribusiness, smart farming, urban farming and digital farming in obtaining the best farming results. Successful agribusiness start-ups comprise of international agribusiness companies that use agricultural biotechnology techniques in ensuring success in agribusiness and rural development.
- Peer to peer learning: This can be achieved by ensuring programs are installed to educate farmers or manufacturers and consumers on the best farming practices. During these learning programs, farmers can learn on items such as the dairy farm equipment price, types of agribusiness, all about agribusinesses like agribusiness startups, agribusiness ecosystems and environment and general agriculture techniques such as farm management, basin irrigation, contract farming, and greenhouse farming.
- Vertical integration: This is the process of adding other farming techniques to increase profit in agribusiness and is normally known as vertical farming. An example is where a rice farmer can use the bukura irrigation scheme in obtaining water supply for its farm through sprinkler irrigation. This will save on cost and energy as the bukura irrigation scheme has large power and water supply.
- Innovation and Development: Small scale agribusiness requires the use of innovative approaches that foster agribusiness development and improve eCommerce in agribusiness. An example of such innovation is by having African fertilizer and agribusiness partnerships that increase success in international agribusiness today.
- Risk Mitigation: This is the use of the agribusiness development center in conducting extensive research and establishing the factors that hinder successful agribusiness. The risks can be reduced by putting certain measures in places such as agribusiness management, farm equipment, and supplies scheduling, use of irrigation programs such as bukura irrigation scheme, furrow irrigation, and sprinkler irrigation, and evaluation and improvement of water storage and drainage systems.
- Groundwork: Farming techniques have developed the latest technological techniques in farming such as smart farming and agribusiness biotechnology. However, farmers need to visit their farms physically and take count of their agricultural products through different handcraft methods
- Be passionate: Agribusiness is like any other business and before venturing into international agribusiness it is important to be focused and have passion by loving what you are doing. Without this, the agribusiness activities will not be successful and may lead to a downturn in agribusiness management.
Types of Agribusiness
Agribusiness can be classified into five types of agricultural products and they are as follows;
- Agricultural products business: National institute of food and agriculture has defined agricultural products as a type of profitable agribusiness as it provides different agricultural research services such as agribusiness development for a return or profit. Ecommerce in agribusiness has been successful with the implementation of modern agribusiness practices and has helped in improving agribusiness economics.
- Agricultural Machinery business: Agricultural machinery business is a type of organic and horticulture farming business that involves the manufacturing and selling of farm equipment to be used in a banana farm, arable land, and vegetable farms. Examples include irrigation systems, sprinklers, farm tractor, agricultural farm equipment and supplies, massive farm equipment, and an amazing modern combine harvester
- Agriculture Service Business: This is an agribusiness type that provides different agricultural services for a profit. The agricultural services are an important component in agribusiness and they include digital farming, agricultural biotechnology, animal husbandry courses, agricultural cooperatives, extensive agriculture, agricultural crop production, agriculture irrigation, and agricultural current affairs.
- Agrochemical Business: This is a type of agrochemical industry that manufactures and sells the chemicals used in agriculture in wholesale to make a profit. However, the side effect of this practice is the exposure of the environment to agrochemical pollution which can be controlled through effective usage of the chemicals by farmers. The use of organic agrochemicals can also prevent the extensive damage caused by agrochemicals in environmental pollution.
- Agro-allied business: This is a type of agribusiness that provides both agricultural products and agricultural services or agribusinesses that offer agricultural products, agrochemicals and agricultural equipment for various types of agribusinesses in developing countries. The products offered are referred to as agro-allied products and the services are agro-allied services and they are part of the agro-allied industries.
Pros and Cons of Agribusiness
Agribusiness practice is a unique farming practice and is used by the top 10 agribusiness companies in the world. However, agribusiness has some pros and cons that affect its decision making in agribusiness management and they are as follows;
Pros of Agribusiness
- Agribusiness provides a stable income for business farmers and international agribusiness companies
- It involves handwork thus creating tangible results such as large crop production
- It has a constant provision of the human basic needs through sustainable agriculture
- Agribusiness portfolio allows for agriculture development through diversification
- Agribusiness in developing countries is enhanced through the use of unskilled labor
- Agribusiness provides benefits for workers such as tax benefits, insurance cover and medical cover.
- Agribusiness can lead to an improvement in agricultural economics by establishing agribusiness partners internationally
Cons of Agribusiness
- Agribusiness faces certain risks every farming season such as livestock death, farm flooding, and insect infestation
- Agribusiness requires constant performance to avoid gaining losses on any international agribusiness practice
- Starting an agribusiness requires financial support from friends, families and financial lending institutions as it requires contracting with large food and agricultural organizations
- The returns in agribusiness require patients as the assets have zero liquidity
- Agribusiness development requires the sourcing of funds from financial institutions
- Agribusiness activities pose huge risks to farmers which leads to high medical costs during subsistence farming
- Farm equipment requires constant care by regular check-up and cleaning which can be costly and time-consuming
Tips for Agribusiness Farming
- Ensure that you have conducted extensive research before venturing into agribusiness
- Always have a planned budget that will prove your agribusiness net worth
- Keep records for your daily transactions which will help in future financial decisions
- Use outsourcing services to obtain the best employees for your modern agribusiness
- Look for agribusiness networks to join such as Agribusiness Whatsapp Group
- Research on the large agribusiness companies and compare their business concepts
- Ensure that you expand your agriculture and agribusiness strategies
- Develop strong partnerships with international agribusiness companies