Agriculture today goes far beyond the farm. With increasing commercialization, the need to manage agricultural inputs, production, and products like a business has become essential. This is where agribusiness management steps in.
In this post, we’ll explore the definition, scope, and importance of agribusiness and dive into the core principles of business management as applied in the agriculture sector.
What is Agribusiness?
The term agribusiness combines “agriculture” and “business,” referring to any commercial activity related to agricultural production.
Definition by John Davis & Ray Goldberg (Harvard University, 1957):
“Agribusiness is the sum total of all operations involved in the manufacture and distribution of farm supplies; production on the farm; and the storage, processing, and distribution of farm commodities.”
Agribusiness covers all enterprises — from input suppliers to producers, processors, distributors, and consumers.
🔗 Core Sectors of Agribusiness
Agribusiness operates across three interlinked sectors:
- Input Sector:
Fertilizers, seeds, pesticides, feed, machinery, and equipment - Farm Sector:
Production of raw commodities (crops, livestock, fisheries, forestry) - Product Sector:
Credit, insurance, storage, processing, transportation, marketing, packaging, and distribution
These sectors interact in a continuous chain that defines the agricultural value system.
🌍 Importance of Agribusiness
Agribusiness is vital for economic, social, and rural development. Here’s why:
- Ensures regular food and fiber supply in desired form, place, and time
- Strengthens both:
- Backward linkages: Inputs, credit, services, and technologies
- Forward linkages: Processing, storage, logistics, and marketing
- Encourages technology adoption and value addition
- Generates employment in rural and semi-urban areas
- Promotes commercialization, resource optimization, and waste minimization
- Boosts GDP, especially in developing economies like Nepal
- Creates form, place, time, and possession utilities
- Responds to consumer needs through a demand-driven business model
📊 Scope of Agribusiness in Nepal
Agribusiness includes:
- The entire agriculture sector, including crops, livestock, fisheries, and forestry
- Parts of the industrial sector (input manufacturers and food processors)
- The commercial/service sector (transport, credit, storage, marketing)
Nepal’s Potential:
- Varied agro-climates support diverse production
- Rising demand for agri-inputs like bio-fertilizers and livestock feed
- Living standards drive demand for processed and packaged food
- Scope for secondary and tertiary processing (e.g., cheese, butter, bakery from raw milk)
🔎 Key Features of Agribusiness
- Seasonal production cycles
- Perishable goods with limited shelf life
- Bulky and costly to transport
- Scattered and small-scale producers
- Often inelastic demand (essential goods)
- Inelastic supply in the short term
- Difficult to brand due to homogeneity
- High risk from pests, price volatility, and weather
- Crucial for livelihoods and food security
🧠 Understanding Business Management in Agribusiness
Agribusiness doesn’t succeed without strong management principles. Efficient management ensures better organization, resource use, and decision-making.
💡 Definitions
- Henri Fayol:
“To manage is to forecast, to plan, to organize, to command, to coordinate, and to control.” - Mary Parker Follett:
“Management is the art of getting things done through people.”
⚙️ Core Functions of Management
- Planning
- Organizing
- Leading (Commanding)
- Coordinating
- Controlling
Management turns disorganized inputs into structured, goal-oriented systems.
🧩 The 6 M’s of Management
Management involves the efficient use of:
- Money
- Market
- Materials
- Machinery
- Methods
- Manpower
🔍 Management Aspects
- As an economic resource
- As a system of authority
- As a social function or elite class
📌 Conclusion
Agribusiness management is the foundation for turning traditional agriculture into a modern, competitive, and value-driven system. From input supply to marketing, agribusiness ensures that agriculture remains viable, profitable, and responsive to market needs.
Whether you’re preparing for B.Sc. Agriculture, Veterinary, or future Master’s studies — understanding this topic equips you with real-world insights that are essential for both academics and industry.
Need more understanding of the concept, you can enroll in the full course of Agribusiness and get more insights on the concepts.
