Agriculture is the biggest sector of the economy where majority of the population in the world live in rural areas. The farming sector becomes the key participant in the agribusiness system worldwide. In the Philippines up to one-half of the country’s economy belongs to the agribusiness sector, of which farming comprises only 20 percent. Other portions belong to industrial and commercial sectors that support the whole agriculture sector. Before we analyse what is the difference of agribusiness than agriculture and business and other discipline let me give you some misconception and fragment views about agribusiness.
Misconception of Agribusiness Custodio explains different misconception on what Agribusiness is and what is not. Few people define agribusiness as just farming in the field, fishing in ocean and raising animals. Some of them are aware that it i
...s an entity that engages with activities of processing of agri-products then being marketed to the consumers. But most of them believe that it is just for big companies like Universal Robina Corporation, San Miguel Corporation, Nestle, Cargill and Betagro.
While other people think that it’s just a domain of private sector for profit objectives, or in academe it is just for making feasibility studies. All of these are misconceptions about what agribusiness. To understand what Agribusiness is all about let us look at the definition, its system, concepts and dimensions, different scope and importance of agribusiness in the economy. Definition of Agribusiness Agriculture to most people is just farming, ranching and fishing then business in the farm is just about selling their crops until late 1960s when Prof.
John H. Davis of Harvard University first used
the word “agribusiness”. So agribusiness is not just about farming system that many people used to know. Despite the growth and interest in the agribusiness profession, what constitutes agribusiness management research continues to be a perennial debate (Barry, Sonka, and Lajili, 1992; Harling, 1995; Robbins, 1988). Understanding what is or what is not agribusiness management research is fundamentally dictated by its definition.
These definition share a common emphasis for various sector of the agri-food supply chain that works towards the production, manufacturing, distribution, and retailing of food products and services (Boehlje, 1999; Cook and Chaddad, 2000) Dy R. T (2012) defines Agribusiness as the chain of activities that engage in the supply of farm inputs; farm production; post-harvest handling, storage, processing, distribution of farm commodities, the supply of packaging materials, marketing, management and distribution of fresh and processed goods; as well as the financing of various activities.
The word “agribusiness” is now used and accepted widely in world including private companies and academic institution. Evolution of Agribusiness Late 1800’s the agribusiness is just self-sufficient farms, for household consumption only. Years later increases the commodity production demand dur to population growth. Crop production became a focus of farmers. (They started purchasing inputs; this is where aquaculture is today! ). Production of agricultural commodity was profitable even back then.
Lack of marketing orientation is the main problem that’s why the growth of agribusiness sector was slowly developed. Mechanization was developed largely due to labor shortages. Much of the manufacturing and processing was relocated off the farm to become businesses themselves. Preservation of raw products was also improved. This made food more convenient to consumers.
Different food companies were established to sustain the needs of the consumer. The growth of food industry and non-food industry for innovative products evolve in this era that helps the agribusiness sector.
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