What is the scope of Agri-Business Management in India?

Posted by Prof. Kuldeep Sharma (Director, IIBS) On 28/06/2021 11:29:39

India is ranked 2nd in the world in agricultural and farm output, this course promises a good career scope for MBA with Agri-Business professionals. MBA/PGDM in Agri-Business Management is one of the fastest-growing sectors for both as an entrepreneur or as a professional. The course is related to the business of crop cultivation, food production, and the various related business concepts in agriculture. Agri-Business management is a young subject comparatively; it gained more popularity during the 60s and 70s in the twentieth century. 

Several definitions of the term agribusiness exist in the literature. Encyclopedia Britannica defines agribusiness broadly as “agriculture operated by business; specifically, a part of a modern economy devoted to the production, processing, and distribution of food, fiber products and by-products including the financial institutions that fund these activities” (Encyclopedia Britannica Inc., 2011)

Agribusiness and agro-industry both involve the commercialization and value addition of agricultural and post-production enterprises and the building of linkages among agricultural enterprises. The terms agribusiness and agro-industries are often associated with large-scale farming enterprises or enterprises involved in large-scale food production, processing, distribution, and quality control of agricultural products.

A simplistic definition states that agribusiness refers to any business related to agriculture, including farming, processing, exporting, input suppliers, trading, and retailing. The term agribusiness is often used to convey an aggregate view of agriculture and business-related activities, covering the multiple functions and processes involved in modern food production and distribution.

It covers agricultural input suppliers, producers, agro-processors, distributors, traders, exporters, retailers, and consumers. Agri-business as a concept was born at Harvard University in 1957 with the publication of a book “A concept of Agri-business”, written by John David and A. Gold Berg. 

It was introduced in the Philippines in early 1966 when the University of the Philippines offered an Agri-business Management (ABM) program at the undergraduate level. In 1969, the first Advanced Agribusiness Management seminar was held in Manila.  While agribusiness once was not even a word, there are many agribusiness programs offered presently around the globe.

Goldberg and Davis defined the term agribusiness as:

Agribusiness is a concept of economics that includes the total of all operations involved in the manufacturing and distribution of farm supplies; production operation on the farm; and the storage, processing, and distribution of farm commodities and items made from them.

Agri-business involves three sectors: 

  1. Input sector: It deals with the supply of inputs required by the farmers for raising crops, livestock, and other allied enterprises. These include seeds, fertilizers, chemicals, machinery, and fuel. 
  2. Farm sector: It aims at producing crops, livestock, and other products. 
  3. Product sector: It deals with various aspects like storage, processing, and marketing the finished products to meet the dynamic needs of consumers. 

Therefore, Agribusiness is the total of all operations or activities involved in the business of production and marketing of farm supplies and farm products for achieving the targeted objectives.

Scope of Agri-business

  1. Our daily requirements of food and fiber products at the desired place at the required form and time come from the efficiency and hard-working of many business personnel in input, farm, and food production and also in marketing them. The entire system in brief is called Agribusiness. 
  2. Agribusiness, of late, is combining the diverse commercial enterprises, using a heterogeneous combination of labor, materials, capital, and technology. 
  3. It is a dynamic sector and continuously meets the current demands of consumers in domestic and world markets. 
  4. Agri-business establishment leads to the strengthening of infrastructural facilities in that area, expansion of credit, raw materials supply agencies, adoption of modern technology in the production and marketing of agricultural products. 
  5. Agri-business provides crucial forward and backward linkages. (Backward linkage includes the supply of inputs, credit, production technologies, farm services, etc., A forward linkage includes storage, processing, transportation, and marketing aspects.) 
  6. Agri-business generates potential employment opportunities. Agribusiness Management and Trade 
  7. It adds value to products and thereby increases the net profits.

India is endowed with varied ago-climate, which facilitates the production of temperate, subtropical, and tropical agricultural commodities. There is a growing demand for agricultural inputs like feed and fodder, inorganic fertilizers, bio-fertilizers.  Export can be harnessed as a source of economic growth. As a signatory of the World Trade Organization, India has vast potential to improve its present position in the World trade of agricultural commodities both raw and processed form. The products line include cereals, pulses, oilseeds and oils, oil meal, spices and condiments, fruits and vegetables, flowers, medicinal plants and essential oils, agricultural advisory services, agricultural tools and implements, meat, milk and milk products, fish and fish products, ornamental fish, forest by-products, etc.

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