Scope and Importance of Agribusiness

Scope of Agribusiness

The agriculture industry is so diverse, yet so interdependent, it is particularly difficult to describe. It comprises large corporate houses/units and small single proprietorships. It includes the manufacturing, distribution, storage, wholesaling, retailing and marketing of varied products, commodities and services. Despite its functional diversity, the agribusiness industry comprises only five basic organizational forms of business: (1) Individual proprietorships, (2) Partnerships, (3) Joint Stock Companies (capitalistic form), (4) Co-operatives and (5) Public/State Enterprises

Importace of Agribusiness

Agriculture has now blossomed into mature industry which includes, i) Input supply system, ii) Agricultural production system and iii) Output marketing system. Indian farmers in particular are not only serving the domestic market but have their access to the international market. All the agribusiness enterprises in India have good economic potential due to relatively favorable agro climatic conditions. The agribusiness, mainly aims to capture market and maximize profit through value addition in fruits & vegetables, milk and honey. Therefore, the recently drafted National Agricultural Policy (NAP) has accorded priority for promoting agribusiness activities at different levels for capturing growth in agriculture.

Scope of Agribusiness :

It was already indicated that agribusiness is a complex, system of input sector, production sector, processing manufacturing sector and transport and marketing sector. Therefore, it is directly related to industry, commence and trade, Industry is concerned with the production of commodities and materials while commerce and trade are concerned with their distribution.

Industry :

Industry refers to the processes of extraction and production of goods meant for final consumption or use buy individual or buy another industry for its production. Thus goods used by the final or ultimate consumers are called “consumer goods” such as edible oils, fruit jams, papaya, pickles etc.

Types of industries :

According to nature, the industries are broadly classified into following types.

• Extractive industries : These industries are concerned with the extraction ;and utilization of natural resources. Example – fishing, fruit gathering, agro-based industries, forestation.
• Genetic Industries : These industries include breeding of plants, seeds, cattle breeding farm, fish hatcheries, poultry farms. Of course, factors like nature, climate and environment play a dominant role in these industries, yet human skill involved in their production cannot be ignored. For example intensive agriculture is possible with greater amount of capital and larger number of workers.
• Manufacturing Industries : These industries are engaged in the conversion of raw material or semi finished goods produced in the extractive industries. Some prominent examples are – cotton textile industry, spinning and weaving mills etc. Manufacturing industries can further be classified into five types : (i) Analytical industry (ii) Processing industry (iii) Synthetic industry, (iv) Service industry (v) Assembly industry.