Agribusiness is a term that has been conflated with large companies invested in corporate farming, such as Monsanto. This confusion often leads to a negative connotation of the term, which is misplaced in many regards, because it refers to a much broader scope of industry and endeavor. In the article below, we’ll explore the finer points of this misunderstood term, explain its full definition, and investigate all the applications for which it is appropriate.
The Direct Business of Growing
Technically defined, the term agribusiness refers to any corporate industry that is connected to the field of agriculture. In recent decades, it has been directly associated with mega-corporations that manufacture agricultural herbicides, pesticides, and engage in genetic modification engineering enterprises. These companies include Dow AgroSciences, Monsanto, Synergenta, DuPont, and others. However, the scope of the term is, in fact, far broader.
It applies to any business that is directly or indirectly involved in food production or agriculture. These companies include those that manufacture farming equipment, warehouses and shipping lines, animal feed producers, wholesalers, organic or conventional farming supply companies, tourist farms, sustainable agriculture ventures, and many others. In short, the term is one of broad applications, which are far more diverse than most would suspect.
These can be entities such as John Deere, which produces and markets many varieties of farming equipment to agricultural enterprises. But term can also embrace manufacturers of biofuels, companies that develop and supply ingredients used in the production of animal feeds, and even successful farming cooperatives for specific crops, such as the juice giant, Ocean Spray, which purchases cranberries from many farming sources for its product lines.
The Up and Down of Diversification
Another interpretation that links the term’s application to large corporations is its relationship to vertically integrated ventures. While it may refer to local farming cooperatives, it is more closely associated with business ventures that control all or the majority of aspects of food production from field to table. These businesses have interests in seed patenting, growing environments and methods, harvesting, shipping, processing, and marketing, whether direct or indirect. In simple terms, they have many business fingers in many types of pies—whether it’s a chemical company that develops and holds genetic patents for crop seeds or a cattle rearing interest that owns slaughterhouses and shipping methods.
But it’s important to recognize that agribusiness is also a small-scale concern that reaches beyond borders. The United Nations’ Food and Agriculture Organization dedicates a portion of its time and pooled resources to assisting farming or production ventures in many developing countries and communities. They provide educational resources and avenues through which communities can obtain seeds or stock, fertilizers and pesticides specific to both crop types and growing environments, and access to institutional financial assistance.
While the term is often used interchangeably with the concept of corporate farming, this is a limiting and misleading application. Yes, it does refer to that variety of agricultural enterprise, but it also relates to small businesses and local coops, companies that produce components of animal feed and the feed itself, corporations that produce and market farming equipment, companies that produce or market biofuel, and even grassroots efforts to establish sustainable community farming. Agribusiness is simply and broadly the business of farming and all that it entails—growing, caring for, harvesting, transporting, and marketing foodstuffs.