Agribusiness is a broad concept used to describe corporate agricultural enterprises individually and collectively. Agribusinesses are companies involved in one or more stages of the production of crops and livestock. Examples of agribusiness activities include

Providing food or fibers is the ultimate product of all agribusiness operations. As such, the economic impact of agribusiness is significant; agribusiness is almost two times as large as the sum of all manufacturing enterprises (measured in total assets); it represents 40 percent of all consumer spending; and it employs 37 percent of the labor force.

The term "agribusiness" was coined in the 1950s by John Herbert Davis and Ray A. Goldberg to reflect the two-way interdependence between businesspeople and farmers in the dual roles of suppliers and purchasers. Business firms that serve agriculture rely on farmers for their markets and for some of their supplies. By the same token, farms could not operate without businesses that manufacture farm supplies and those that store, process, and merchandise farm commodities.


In the early 19th century, agriculture was a self-contained industry. The typical farm family produced its own food, fuel, shelter, draft animals, feed, tools, implements, and even clothing. Only a few necessities had to be bartered for or purchased off the farm. The farm family performed virtually all operations pertaining to the production, processing, storage, and distribution of farm commodities. In the ensuing years, however, agriculture evolved from self-sufficiency to intricate interdependence with other segments of the economy, particularly those relating to the manufacture of production supplies and the processing and distribution of food and fiber products.

The agribusiness approach is a method of examining farming problems in a new and more comprehensive setting. One benefit from this approach has been the release of workers—farm manpower—from agriculture for employment in new nonfarm occupations—including the armed forces during wars. This has resulted in tremendous economic growth and development and an improved standard of living.

Agribusiness consists of several million farm units and several thousand business units, each an independent entity, free to make its own decisions. Agribusiness is the sum total of hundreds of trade associations, commodity organizations, farm organizations, quasi-research bodies, conference bodies, and committees, each concentrating on its own interests. The U.S. government also is a part of agribusiness to the degree that it is involved in research, the regulation of food and fiber operations, and the ownership and trading of farm commodities. Land-grant colleges, with their teaching, experiment stations, and extension functions, form another sector of agribusiness. In summary, agribusiness exists in a vast mosaic of decentralized entities, functions, and operations relating to food and fiber.

The evolution from agriculture to agribusiness has brought with it numerous benefits. These include reduced drudgery for laborers; the release of workers for nonagricultural endeavors; a better quality of food and fibers; a greater variety of products; improved nutrition; and increased mobility of people. The release of farm manpower and the creation of new, off-the-farm jobs have been the basis for the country's economic growth and development for the last 150 years. The key to this growth and development has been increased worker productivity, which in turn spurs creativity, new products and wealth. This translates into risk capital, new factories, new jobs, and increased consumer purchasing power.


One prominent feature of agribusiness is its continuous pursuit of new technologies. Well-known examples include the use of satellite-based global positioning systems (GPS) to closely manage crop lands and computer systems to manage various parts of the business. These technologies boost agricultural efficiency by reducing wasted resources, saving time, and improving output.

Crop agriculture, in particular, has turned to such high-tech solutions to develop what is known as precision or site-specific farming methods. These methods involve systematically testing crop fields for variations in fertility and soil composition. The data are then stored in a computer, and, using GPS equipment on the farm machinery, the on-board computer can then determine where in the fields to allocate seed and fertilizer to maximize yield and minimize waste.

Moreover, scores of research and development projects are conducted in agribusiness to find new technologies and to better use existing ones. Important R&D work includes developing genetically engineered crops, improving the pest resistance of crops, using biotechnology in agriculture, and formulating new agricultural pharmaceuticals and chemicals. Despite considerable government and university backing for agribusiness research, the majority of this research is funded by the private sector.


A number of colleges and universities offer extensive course work in agribusiness and agribusiness degrees. Graduate programs lead to an MBA in agribusiness or a master of science in agribusiness. Typical classes in graduate programs deal with

The emphasis of these programs is on developing business acumen and learning about the best practices in the various fields of agribusiness.

SEE ALSO : Commodities


Beierlein, James G., Kenneth C. Schneeberger, and Donald D. Osbum. Principles of Agribusiness Management. 2nd ed. Prospect Heights, IL: Waveland Press, 1995.

Global Agribusiness, quarterly.

Ricketts, Cliff, and Rawlins, Omri. Introduction to Agribusiness. Albany, NY: Delmar Publishers, 1999.

Also read article about Agribusiness from Wikipedia

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