What Is Agribusiness?

 

In short, agribusiness is the business of farming. However, the word is a loaded term, especially among critics of corporate farming. For people who view large-scale commercial farming negatively, agribusiness is the antithesis of traditional small-scale family farms. For people involved in it, of course, the word is simply a convenient shorthand for saying that one is in the business of agriculture.

Agribusiness includes the production, processing, and supply of agricultural goods that range from lettuce to corn syrup. Companies may focus on things like cut flowers, fresh vegetables, or byproducts of farming such as fuels derived from farm waste. Agribusiness also encompasses farming equipment, machinery, chemicals, suppliers, and personnel. Several large companies control the bulk of the share of business, especially in the United States; this has been a cause for criticism among people who are concerned about monopolies and price fixing.

Several things characterize agribusiness, differentiating it very distinctively from family farming. The first is the scale, which is typically quite large. The second is considerable vertical and horizontal integration. For example, a company might own a facility that processes frozen vegetables, along with a controlling share in farms which produce these vegetables and companies which provide personnel to harvest and transport them. Agribusiness is also distinguished by being run like a true business, with administrators rather than farmers at the helm of companies in the agriculture business.

This highly efficient and streamlined organization allows agribusiness to keep food costs low. This is an important priority for many consumers and governments, who also appreciate its standardization, which is in theory supposed to limit the possibility of food borne contamination and other issues with the food supply.

The rise of agribusiness began in the 20th century, when citizens of countries in the developed world began flocking to their cities, leaving a shrinking population of farmers struggling to meet the demand for food. Over time, agricultural companies arose, using their size and business experience as leverage to create a highly efficient system of farming and transporting agricultural goods. One major criticism of agribusiness is that it has been too successful, driving down price points and forcing small farms out of business as they cannot compete with big firms.

Critics have also expressed concerns about a heavy focus on chemicals to control problems which arise on farms. Pesticides, herbicides, and a variety of pharmaceuticals are all often a big part of agribusiness, for example. It also distances people from the source of their food, as any glance at the produce section at a major market will confirm; rather than meeting food producers, people can purchase grapes from Chile, peppers from Africa, and rice from China.

The Modern Face Of Farming In The UK

John Hutchinson
LPS Special Correspondent

FEW nations have seen such enormous changes in their farming industry as the United Kingdom. Recent decades have not only brought farmers more than their fair share of drought and flood but also powerful new pressures on their livelihoods that their grandfathers, 50 years ago, could never have imagined.

These pressures are generated by the modern world’s economic, environmental and consumer forces that have changed the face of the entire agriculture and food-production industry in the UK.

As a result, the UK’s agricultural and food production and processing technologies have become some of the most advanced and most sought-after in the world. The downside for many farmers is the personal consequences of the inevitable contraction of an industry that once employed millions but now supports a full-time workforce of fewer than 400,000 people.

Today in England, farmers tend an impressive 80% of the country’s 130,000 square kilometres of land and yet the direct economic value of farming in the food they produce is less than 1% of the nation’s gross domestic product.

This tiny proportion hides the real and immeasurable economic value of farming in terms of the raw materials that feed the UK’s major food processing industry, the new generations of energy crops for cleaner fuels, and the enormous benefit for the UK public in the shape of attractive landscapes that provide a fertile field for the growth industry of rural tourism – a sector that today is worth more in economic terms than farming.

Increasingly, these developments are being encouraged not only by government policies in the UK but also by the farming community. Modern farms are getting bigger but profits are dropping and farm incomes are at the lowest levels since the 1930s, while more than 40,000 jobs have been lost in farming in the past two years alone.

Many UK farmers are weathering the storm by becoming more productive. In the past 18 months the total area under crops has increased by 3% to nearly four million hectares, with wheat up by 20% at nearly 1.9 million hectares. At 21 million tonnes, the UK’s wheat and barley harvest marked a 17% increase over 2001.

Cheap grain from the Ukraine has contributed to a drop in grain prices for UK farmers but the UK’s National Farmers’ Union sees a confident future.

The overall wheat market looks promising for UK suppliers, reports a National Farmers’ Union spokesman. World production levels have fallen, especially in the United States, Canada and Australia, while new markets are opening up in north Africa and Asia.

Livestock, overshadowed today by UK’s grain and horticultural sectors, saw reductions of between 2- and 5% in dairy and beef breeding herds. Horticulture, by contrast, is a vibrant and growing feature of UK agriculture, with the UK leading the way internationally in research, development and environmental stewardship. Horticulture output today is worth almost two billion pounds sterling, more than 10% of the total industry.

Farming in UK also contributes strongly to a thriving export business in foodstuffs that rose to more than 4.8 billion pounds in the first six months of 2002 alone.

Defra - the government’s Department for the Environment, Food and Rural Affairs - is striving to help UK farmers survive and prosper, balancing the priorities of ensuring competitively priced food for UK and overseas markets with the need for high standards of safety, environmental care, animal welfare and a sustainable, efficient food chain – while maintaining the essential character of rural communities. Government forecasts point to a 9% growth in farming income this year.

Farmers are also contributing more effectively to government environmental schemes. Direct state ownership of production farms has long since ended but more than 25,000 farmers are now involved in government initiatives and in recent years 400 flourishing farmers’ markets have opened to offer producers scope to sell direct to their customers. Nearly 80,000 farmers and growers are members of farm assurance schemes.

The UK’s leisure and tourist industry, too, is presenting new opportunities for farmers. In the past 20 years an estimated 15,000 farmers have introduced products or services for the leisure market, from big pleasure and educational parks to small-scale facilities for holidaymakers.

Meanwhile the system of state support to food producers is under review with farmers, consumers and the government increasingly anxious to ensure Europe’s Common Agricultural Policy (CAP) develops as an integrated rural development policy.

Reforms to the policy get the support of UK farmers, although the industry is concerned that changes to the proposed phasing-in of farm support to new member states could affect farmers.

Farmers do not see any major competitive threat arising from the introduction of new member states into the European Union (EU), says the National Farmers’ Union. We broadly agree with the proposed EU position on agriculture in the enlargement talks.

Meanwhile another initiative for UK farmers to grasp is new scope for growing green fuels. Research shows almost one fifth of arable land could be devoted to crops for conversion into bio-fuels.

This promises to be one of the most dramatic shifts in the function of farming in recent history, says the National Farmers’ Union. It will provide new opportunities for farmers and will be excellent news for the environment. With such initiatives, UK agriculture is preparing to look ahead to a cleaner, productive and more stable future.

Source : http://www.agriworld.nl/