Agribusiness has evolved over the years since subsistence farming. The farm production has been central to the agribusiness. As the commercialization of farm production gained significance the production and supply of farm inputs, marketing of farm output including value addition (processing) and services to farm sector have expanded leading to proliferation of several independent business units. Agricultural development has been a precursor to economic development. With the growth of agriculture sector, each operation became specialized and had the potential for business. This has led to establishment of numerous firms that cater to various needs of the agribusiness sector. Thus, the gamut of agribusiness enlarged including few sub systems in its realm.
“Agribusiness includes all those business and management activities performed by firms that provide inputs to the farm sector, produce farm products, and/or process, transport, finance, handle or market farm products." Downey and Erickson (1987)
Types of Agribusiness
The agribusiness sector comprises predominantly of four sub systems; Input supply sub system, Production sub system, Output marketing subsystem and services subsystem. a)Input supply subsystem: It includes all firms that provide input for farm production, such as seeds, fertilizers, pesticides, bio-inputs, farm machinery, capital, labour etc. b)Production subsystem: The individual farms were crops, livestock, mulberry and fish production takes place and firms that are involved in agriculture allied activities such as sericulture, mushroom, apiary production. c)Output marketing subsystem: this includes all the firms that are involved in the marketing channel through which the produce from the farm, either in the raw or processed form reaches the consumer in the domestic or international market. The major participants are market intermediaries such as, wholesalers, retailers, village merchants, processors, exporters etc. d)Services subsystem: It includes all the firms that provide services such as market information, grading, storage, transport, farm machinery hiring and maintenance, technology transfer, consultancy, commodity exchanges, etc.
The globalization of markets, increasing per capita income, education levels etc., created new opportunities and challenges for the agribusiness sector and has led to greater specialization of activities. Evolution of agribusiness sector
Agriculture has come a long way from the era of shifting cultivation. The domestication of livestock and initiation of crop production paved way for creation of independently owned farms, where subsistence farming was mainly practiced. Growth of the economy, need for food security for the population, opportunities for exchange and increase in demand for other goods and services led to commercialization of agriculture. Commercial agriculture could be segmented in four distinct phases – green revolution, sustainable agriculture, market led agriculture and supply chain management (“farm to fork”). In this transformation process, several new products and services, firms and management systems have added to the agribusiness sector with the each stage of evolution.
Subsistence agriculture is self-sufficient farming in which farmers grow only enough food to feed their family and pay taxes. The typical subsistence farm has a range of crops and animals needed by the family to eat during the year. Planting decisions are made considering what the family will need during the coming year, rather than market prices. Commercial agriculture
Green revolution: After independence, the farmers transformed subsistence agriculture into commercial agriculture. Green Revolution, launched in mid sixties became a landmark in the transition of agriculture in India. The introduction of high yielding varieties in wheat and rice with improved responsiveness to fertilizers and irrigation was collectively referred to...