MEANING OF AGRIBUSINESS
Meaning of Agribusiness
An agricultural business enterprise is any business or organisation that supplies farm inputs or services, or processes, distributes, wholesales agricultural products to customers.
Agribusiness refers to the business of farming, although, the term is not often used in correlation with actual farms. Instead, the term agribusiness most commonly means an agriculturally-related business that supplies farm inputs, such as farm machinery and seed supply.
Webster Dictionary defines agribusiness as farming and the business associated with farming, as the processing of farm products, the manufacturing of farm equipment and fertilizers e.t.c. Included in the dictionary definition of agribusiness to the fact that “ any firm whose profits are dependent on or derived from eventual harvest of agricultural production on natural resources.
The definition of agribusiness includes three major sectors viz Producers, Agricultural input firms, and Agricultural output firms.
Agribusiness Inputs
Inputs are the various resources and services producers use to produce agricultural products. Agribusiness inputs firms include computer software developers, financial services companies, insurance providers, accountants and attorneys, as well as the more traditional agricultural input companies such as seed, feed, fertilizer, farm equipment, irrigation, animal pharmaceuticals, livestock handling equipment, and horticultural supplies.
Agribusiness Outputs
Agribusiness outputs include the output side of agricultural production such as the post-harvest processing of vegetables, fruit, fiber, poultry, and meats. The definition of agribusiness output enterprises goes further to include the distributors, marketers, packagers, and retailers of agricultural food and fiber. It also includes firms involved in the post-harvest logistics of shipping and handling agricultural production such as the railroads, truckers, ocean carriers, and airlines.
It has to be noted that in all of these agribusiness enterprises, the firm's success relates to their familiarity and understanding of agricultural production and what affects the eventual harvest, handling, and distribution of agricultural production and bio- resources.
Agribusiness Activities.
Agricultural activities include the following
• research and development of new agricultural resources and methods
• ownership or management of agricultural production facilities such as farmlands and livestock facilities
• manufacture or distribution of agricultural supplies and equipment such as machinery, feed, and fertilizers
• processing or distribution of agricultural products
Agribusiness is subdivided into structural component of production process of three sub-structures of input or supply sector, the farm production sector, and the marketing sector for the processed products of the farm production sector.
Definitionally, agribusiness is the sum total of all the operations involved in the manufacture and distribution of farm supplies, production operations on the farms, and the storage-processing, distribution of farm supplies, and the items made from them. The operations in agribusiness are grouped into three aggregates namely, (i) farm supplies, (ii) farm production, and (iii) Processing-distribution which are generally titled as “primary agribusiness tri-aggregate.” In this sense agribusiness connotes the sum-totality of all operations involved in the production and distribution of the food and fiber needs of the economy.
Categories of Agribusiness
Taking an agribusiness perspective of agricultural business in Nigeria, the array of agricultural business in the country can be categorized into three economically interdependent groups
i. Input supply
ii. Farm production
iii. Output sectors
The agricultural business in the input sector provides farmers with supplies including seeds, feed, fertilizer, chemicals, machine and fuel for production of crops and livestocks.
The farm production sector produces crops and animal product that are processed and distributed by output sector to the final consumers.
Supplies Component of Agribusiness
The first important component of agribusiness development is the supplies industry.
Farm supplies available in cheap and continuous forms facilitate structural transformation of farm production from the peasantry stages to the more modern and commercialized forms. An efficient and flexible farm supplies component is a necessary condition for the development of a virile agribusiness.
Inputs Profile in Agribusiness
• Agriculture inputs i.e. seeds, fertilizers, pesticides, Agro Chemicals, Insecticides manufacturers, distributors & suppliers.
• Farm equipments, agri-implements, machinery, tractors, combine harvesters, tillers, Precision Farming, Generator sets, pumps and pipes etc. manufacturers, suppliers, importers & traders
• Agricultural/Horticulture Products like fruits, vegetables, flowers manufacturers, traders & Exporters
• Central & State Government Ministries, Departments & Nodal Agencies of Agriculture & horticulture
• Irrigation equipments, machinery & Watershed Management products manufacturers, suppliers & traders
• Agri-Biotechnology, Nanotechnology, Tissue culture Laboratories, Soil Testing Equipment, Climate Control & Automation Equipment
• Cold chain Equipment for Perishable Produces, Cold storage & Refrigeration Appliances, Perishable Cargo Handling, Refrigerated Van & Trucks, Digital Temperature Controller & Data Logger etc.
• Poly houses, Greenhouses, Shedding Nets Equipment Manufacturers, Consultants & Suppliers
• Post Harvest, Materiel Handling, Bulk Storage, Packaging Technology & Services Equipments Manufacturers & Suppliers
• Banks, Financial Institutions, NBFCs, Insurance, IT & other Services
• Agri Business Consultants
• Floriculture & Nursery Industry
• Organic Food Products & Organic Certification Agencies
• Grading, Sorting, Wrapping, Sealing & Lamination, Elevator, Conveyors, Rotary Separators Equipment manufacturers & Suppliers
• Farmers, Co-operative Societies, SHGs & NGOs
• Scientists, Researchers, Students
• Professional consultants
• Agricultural Publications, Directories, CDs etc.
• Trade Associations & market bodies
• International Buyers & Export Houses
... And other stakeholders of Agriculture & Allied activities
Farm Production component of Agribusiness
With the farm production component of agribusiness, farm business tends to move towards corporate, cooperative and state large-scale enterprise under such conditions. The most important reason for growth in farm production efficiency will among others include;
i. A large supply of land and water resources.
ii. Large investment in education to improve human skills and managerial abilities
iii. Development and diffusion of new knowledge about agricultural technology
iv. Complementary industrial development that supplies capital inputs for agricultural and nonfarm employment opportunities for people no longer needed in farm production business
v. Structural organization of farm production and marketing that provides powerful economic incentives for farmers and marketing firms to increase output and productivity, and
vi. Public and private institutional service that help to conserve as well as improve natural resources, increase the fund of knowledge about the improve agricultural technology, encourage capital formation as well as investment in agriculture, and assure farm people that they will share in the economic benefits of increased farm production.
Processing Components of Agribusiness
Processing is perhaps the most important component of agribusiness development, since it is capable of strongly shaping the form of the farm production process, by value addition. This contention arises from the fact that a large portion of farm products undergoes some degree of change between harvesting and final use as it is in the processing of the staples such as milling rice, preparing yam flour, preparing cassava flour, etc, in order to provide the basic diets of the people.
Agri-processing
Agri-processing industry transforms and adds value to products that originate from agriculture, forestry and fisheries and its Standard Industrial Classification categorises 11 divisions that make up the agribusiness sector: viz food, beverages, paper and paper products, wood and wood products, textiles, wearing apparel, furniture, tobacco, rubber products, footwear and leather and leather products.
Food Processing Industries
Food processing industries and practices include the following:
• Cannery
• Fish processing
• Food packaging plant
• Industrial rendering
• Meat packing plant
• Slaughterhouse
• Sugar industry
Food processing
Foods are processed to improve their digestibility and to enhance their appeal to the consumer. Processing also serves to extend the availability of foods beyond the area and season of production, thus stabilizing supplies and increasing food security at national and household levels. A particularly important aspect of food processing is that it permits great diet diversity, giving consumers access to a wider choice of products and hence to a better range of vitamins and minerals than they would otherwise consume.
Handling stages in processing
Primary processing refers to the immediate post-harvest handling activities. For cereal and legume grains, such activities include drying, threshing or shelling. Such operations reduce the fibre content and may extend the storage life of the foodstuff.
Secondary processing, or transformation, usually involves some alteration in the form of the foodstuff to facilitate its subsequent use. Cereal and legume grains may be cleaned, graded, tempered or parboiled, dehulled and polished or split into halves. Tubers may be peeled and sliced and then sun dried. Many grains are ground, pounded or milled and sieved to give various grades of meal or flour
Tertiary processing involves the conversion of uncooked materials into products and food combinations for human consumption.
Strategic issues in Business including Agribusiness.
This section will take us to discussing
• Different people found in the world of business.
• Having money does not necessarily make good investor
• Three (3) Es needed to be a successful investor
• Phases of becoming a good investor.
• Priority reason for investing. Security, comfortability and richness are all important choices for investing.
• Reasons for investing in business
• The rich make money to work for them
• Money is an idea, but not an excuse for not getting what you want.
• Getting rich is automatic if you have a good plan and stick to it
• Five Ds required to be successful startup
• It does not take money to make money.
• Investment as a plan
• Time is of essence to being rich or being poor
• Plan early in life towards being old
• Decide on what to do when you grow old.
• Invest in business from inside
• Start as an insider
• Financial literacy a must in investing
• Investor controls
• Investing is not risky but the investor is
An agricultural business enterprise is any business or organisation that supplies farm inputs or services, or processes, distributes, wholesales agricultural products to customers.
Agribusiness refers to the business of farming, although, the term is not often used in correlation with actual farms. Instead, the term agribusiness most commonly means an agriculturally-related business that supplies farm inputs, such as farm machinery and seed supply.
Webster Dictionary defines agribusiness as farming and the business associated with farming, as the processing of farm products, the manufacturing of farm equipment and fertilizers e.t.c. Included in the dictionary definition of agribusiness to the fact that “ any firm whose profits are dependent on or derived from eventual harvest of agricultural production on natural resources.
The definition of agribusiness includes three major sectors viz Producers, Agricultural input firms, and Agricultural output firms.
Agribusiness Inputs
Inputs are the various resources and services producers use to produce agricultural products. Agribusiness inputs firms include computer software developers, financial services companies, insurance providers, accountants and attorneys, as well as the more traditional agricultural input companies such as seed, feed, fertilizer, farm equipment, irrigation, animal pharmaceuticals, livestock handling equipment, and horticultural supplies.
Agribusiness Outputs
Agribusiness outputs include the output side of agricultural production such as the post-harvest processing of vegetables, fruit, fiber, poultry, and meats. The definition of agribusiness output enterprises goes further to include the distributors, marketers, packagers, and retailers of agricultural food and fiber. It also includes firms involved in the post-harvest logistics of shipping and handling agricultural production such as the railroads, truckers, ocean carriers, and airlines.
It has to be noted that in all of these agribusiness enterprises, the firm's success relates to their familiarity and understanding of agricultural production and what affects the eventual harvest, handling, and distribution of agricultural production and bio- resources.
Agribusiness Activities.
Agricultural activities include the following
• research and development of new agricultural resources and methods
• ownership or management of agricultural production facilities such as farmlands and livestock facilities
• manufacture or distribution of agricultural supplies and equipment such as machinery, feed, and fertilizers
• processing or distribution of agricultural products
Agribusiness is subdivided into structural component of production process of three sub-structures of input or supply sector, the farm production sector, and the marketing sector for the processed products of the farm production sector.
Definitionally, agribusiness is the sum total of all the operations involved in the manufacture and distribution of farm supplies, production operations on the farms, and the storage-processing, distribution of farm supplies, and the items made from them. The operations in agribusiness are grouped into three aggregates namely, (i) farm supplies, (ii) farm production, and (iii) Processing-distribution which are generally titled as “primary agribusiness tri-aggregate.” In this sense agribusiness connotes the sum-totality of all operations involved in the production and distribution of the food and fiber needs of the economy.
Categories of Agribusiness
Taking an agribusiness perspective of agricultural business in Nigeria, the array of agricultural business in the country can be categorized into three economically interdependent groups
i. Input supply
ii. Farm production
iii. Output sectors
The agricultural business in the input sector provides farmers with supplies including seeds, feed, fertilizer, chemicals, machine and fuel for production of crops and livestocks.
The farm production sector produces crops and animal product that are processed and distributed by output sector to the final consumers.
Supplies Component of Agribusiness
The first important component of agribusiness development is the supplies industry.
Farm supplies available in cheap and continuous forms facilitate structural transformation of farm production from the peasantry stages to the more modern and commercialized forms. An efficient and flexible farm supplies component is a necessary condition for the development of a virile agribusiness.
Inputs Profile in Agribusiness
• Agriculture inputs i.e. seeds, fertilizers, pesticides, Agro Chemicals, Insecticides manufacturers, distributors & suppliers.
• Farm equipments, agri-implements, machinery, tractors, combine harvesters, tillers, Precision Farming, Generator sets, pumps and pipes etc. manufacturers, suppliers, importers & traders
• Agricultural/Horticulture Products like fruits, vegetables, flowers manufacturers, traders & Exporters
• Central & State Government Ministries, Departments & Nodal Agencies of Agriculture & horticulture
• Irrigation equipments, machinery & Watershed Management products manufacturers, suppliers & traders
• Agri-Biotechnology, Nanotechnology, Tissue culture Laboratories, Soil Testing Equipment, Climate Control & Automation Equipment
• Cold chain Equipment for Perishable Produces, Cold storage & Refrigeration Appliances, Perishable Cargo Handling, Refrigerated Van & Trucks, Digital Temperature Controller & Data Logger etc.
• Poly houses, Greenhouses, Shedding Nets Equipment Manufacturers, Consultants & Suppliers
• Post Harvest, Materiel Handling, Bulk Storage, Packaging Technology & Services Equipments Manufacturers & Suppliers
• Banks, Financial Institutions, NBFCs, Insurance, IT & other Services
• Agri Business Consultants
• Floriculture & Nursery Industry
• Organic Food Products & Organic Certification Agencies
• Grading, Sorting, Wrapping, Sealing & Lamination, Elevator, Conveyors, Rotary Separators Equipment manufacturers & Suppliers
• Farmers, Co-operative Societies, SHGs & NGOs
• Scientists, Researchers, Students
• Professional consultants
• Agricultural Publications, Directories, CDs etc.
• Trade Associations & market bodies
• International Buyers & Export Houses
... And other stakeholders of Agriculture & Allied activities
Farm Production component of Agribusiness
With the farm production component of agribusiness, farm business tends to move towards corporate, cooperative and state large-scale enterprise under such conditions. The most important reason for growth in farm production efficiency will among others include;
i. A large supply of land and water resources.
ii. Large investment in education to improve human skills and managerial abilities
iii. Development and diffusion of new knowledge about agricultural technology
iv. Complementary industrial development that supplies capital inputs for agricultural and nonfarm employment opportunities for people no longer needed in farm production business
v. Structural organization of farm production and marketing that provides powerful economic incentives for farmers and marketing firms to increase output and productivity, and
vi. Public and private institutional service that help to conserve as well as improve natural resources, increase the fund of knowledge about the improve agricultural technology, encourage capital formation as well as investment in agriculture, and assure farm people that they will share in the economic benefits of increased farm production.
Processing Components of Agribusiness
Processing is perhaps the most important component of agribusiness development, since it is capable of strongly shaping the form of the farm production process, by value addition. This contention arises from the fact that a large portion of farm products undergoes some degree of change between harvesting and final use as it is in the processing of the staples such as milling rice, preparing yam flour, preparing cassava flour, etc, in order to provide the basic diets of the people.
Agri-processing
Agri-processing industry transforms and adds value to products that originate from agriculture, forestry and fisheries and its Standard Industrial Classification categorises 11 divisions that make up the agribusiness sector: viz food, beverages, paper and paper products, wood and wood products, textiles, wearing apparel, furniture, tobacco, rubber products, footwear and leather and leather products.
Food Processing Industries
Food processing industries and practices include the following:
• Cannery
• Fish processing
• Food packaging plant
• Industrial rendering
• Meat packing plant
• Slaughterhouse
• Sugar industry
Food processing
Foods are processed to improve their digestibility and to enhance their appeal to the consumer. Processing also serves to extend the availability of foods beyond the area and season of production, thus stabilizing supplies and increasing food security at national and household levels. A particularly important aspect of food processing is that it permits great diet diversity, giving consumers access to a wider choice of products and hence to a better range of vitamins and minerals than they would otherwise consume.
Handling stages in processing
Primary processing refers to the immediate post-harvest handling activities. For cereal and legume grains, such activities include drying, threshing or shelling. Such operations reduce the fibre content and may extend the storage life of the foodstuff.
Secondary processing, or transformation, usually involves some alteration in the form of the foodstuff to facilitate its subsequent use. Cereal and legume grains may be cleaned, graded, tempered or parboiled, dehulled and polished or split into halves. Tubers may be peeled and sliced and then sun dried. Many grains are ground, pounded or milled and sieved to give various grades of meal or flour
Tertiary processing involves the conversion of uncooked materials into products and food combinations for human consumption.
Strategic issues in Business including Agribusiness.
This section will take us to discussing
• Different people found in the world of business.
• Having money does not necessarily make good investor
• Three (3) Es needed to be a successful investor
• Phases of becoming a good investor.
• Priority reason for investing. Security, comfortability and richness are all important choices for investing.
• Reasons for investing in business
• The rich make money to work for them
• Money is an idea, but not an excuse for not getting what you want.
• Getting rich is automatic if you have a good plan and stick to it
• Five Ds required to be successful startup
• It does not take money to make money.
• Investment as a plan
• Time is of essence to being rich or being poor
• Plan early in life towards being old
• Decide on what to do when you grow old.
• Invest in business from inside
• Start as an insider
• Financial literacy a must in investing
• Investor controls
• Investing is not risky but the investor is
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