Agribusiness refers to an industry composed of businesses involved in agricultural and agricultural-related commercial activities. Such businesses and companies are involved at varying degrees along the entire agricultural value chain which include all the steps required to send an agricultural good to market: production, processing and distribution.
These companies include those that plant and farm agricultural products, manufacture farming equipment, warehouses and shipping lines, animal feed producers, wholesalers, organic or conventional farming supply companies and many others. In short, the term is one of broad applications, which are far more diverse than most would suspect. Agribusiness is simply and broadly the business of agriculture and all that it entails - growing, managing, harvesting, transporting, and marketing of food.
Agribusiness has a massive economic, social, and environmental footprint. According to McKinsey & Company, the industry's value globally surpasses 5 USD trillion annually and represents 10% of global consumer spending, 40% of employment as well as 30% of greenhouse-gas emissions.
The agricultural industry provides more to the world than just food however. Agricultural development is one of the most powerful tools to end extreme poverty and boost shared prosperity. For example, growth in the agriculture sector has been found two to four times more effective in raising incomes among the poorest compared to other sectors. Agriculture is also crucial to economic growth accounting for one-third of the world’s gross domestic product annually.
The importance of agribusiness and agriculture as a whole is expanding and becoming a centerpiece in the creation of economic policy, international trade and strategic investments.
Key Agribusiness Stats
USD Trillion Value p.a
Of Global Employment
Source: McKinsey & Company
Agricultural production includes activities such as land preparation, planting, management and the harvesting of produce.
Agricultural processing is the transformation of harvested products into other forms. This includes activities such as freezing, canning, slicing and packaging.
Distribution involves all activities involved in moving agricultural products from the farm to the consumer. It includes transportation, wholesalers and retail outlets.