ENTREP ELEC 2

Introduction to Agribusiness Management

Module 2
Agribusiness in Retrospect

1. Introduction

Retrospective review is the process of determining coverage after treatment has been given
and evaluates the effects of regulations after they have been implemented and verifies whether
the existing regulations need to be removed, amended, or streamlined. Retrospective review
also helps improve the design of future regulations.

The main purpose of the retrospective is to come together and share what might be
slowing things down and what changes can be made to improve outcomes. The main aim is to
inspect the situation and adapt to the reality and to improve continuously.

Retrospect provides a focused time to learn from the past and each other so they can
constantly improve the development process. Retrospective benefits are vast, and they trickle
down into all areas of development.

2. Learning Outcomes
At the end of the chapter, the students shall be able to

1. Discuss the growth and development of agribusiness

2. Discuss the agribusiness systems concepts
3. Discuss the agribusiness enterprise formation
4. Enumerate various roles of agribusiness sector to the economic development
5. Know the growth trends prospect in the food sector
3. Learning Content
Agribusiness has been popularized in many countries during the past centuries. With the
proliferation of agri-based enterprises and massive technological breakthroughs in agriculture,
the need to increase the supply of effective agribusiness managers becomes imperative. With the
recent ratification of the Agriculture and Fishery Modernization Act (AFMA), the Philippine
now engages itself with various programs to professionalize its manpower in agriculture to stay
competitive, otherwise they will be left behind by its neighboring countries.
A. The Growth & Development of Agribusiness

The term “agribusiness” originated and was first used by Prof. John H. Davis of Harvard
University in 1955. This became a buzz word ( a word or expression that has become fashionable in a

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particular field and is being used a lot by the media )
and has gained wide acceptance all over the world.
The term is not only found in internet websites, newspapers, magazines, professional journals,
and textbooks, but it is also widely used by academicians and businessman in classroom
sessions, seminars and day-to-day conversation.

Since agribusiness is closely related to the fields of agriculture, business, management,

economics, accountancy and public administration, a uniform definition of agribusiness is hereby
formulated to with:

Agribusiness is a system oriented emphasizing on the interactions of all activities and

factors affecting the manufacture and distribution of farm inputs, production activities on the
farm and the storage, processing and distribution of farm commodities and items made from

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them, locally and globally within the context of the country’s biophysical, socio-cultural,
political, economic environment and development needs.

Based on the above definition of agribusiness, it is therefore the main objective of the
program to produce educated well-rounded professionals in agribusiness capable of meeting the
national and global needs for highly trained managers, academicians, researchers, extentionists
and entrepreneurs.

A business niche is a segment of a larger market that has a specific target audience. This
can help a company fit the needs of specific consumers. Some common aspects that help define
different business niches include: Price: Some consumers prefer higher or lower-priced items.

The term agribusiness was coined meaning it was invented as a new word or expression, or
to use one in a particular way for the first time.

Agribusiness will be the central metaphor of business system meaning the qualities or
characteristics of agribusiness are carried over to another systems to make a direct comparison
highlighting a specific idea.

Agribusiness can be split into three major categories—agriculture, livestock, and forestry.
Agriculture includes activities like planting and harvesting crops. Livestock concerns raising
animals for products like milk, eggs, or meat. Forestry involves planting, growing, and
harvesting trees for construction, papermaking, and other purposes. Agriculture is a business. It
is not different from other types of businesses, it requires management and risk-taking. The tools
of trade (production, marketing, finance and corporate planning) are equally interrelated
functions of agriculture, hence, doing business related to agriculture is Agribusiness.
Like other type of business, it is viewed as an investment, which normally involves factors
of production such as land, labor and capital. As an investment therefore, agribusiness can be
defined as the science and art of mobilizing, utilizing and managing economic resources to
produce goods and/or services to generate profit. This profit orientation connotes that
agribusiness should not focus merely on the production of goods and/or services for self-
subsistence purposes of family’s own consumption.

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 An agribusiness enterprise must be market-oriented and shall always produce beyond
family consumption to have marketable surplus to generate profit. Aside from profit-orientation,
it must be consumer-oriented and environment-friendly to stay long in the business

B. The Agribusiness Systems Concepts

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 Drilon J.D. defines “agribusiness as the sum total of all the operations involved in the
manufacture and distribution of farm supplies; production activities in the farm; and storage,
processing and distribution of commodities and other items made from them”.

Note: The success of each part depends upon the functioning of the other two.

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 From this definition, agribusiness can be viewed as a vertically structures system and can
be equated with a commodity system comprising the input subsystem, production subsystem,
processing subsystem, marketing subsystem, consumer subsystem and the support subsystem.

Its system’s orientation connotes that for the system to work effectively and efficiently, its
different subsystem shall be well coordinated. While these subsystems are interdependent and
interrelated, it must be a common perspective among key players or agribusiness managers that
their operations be synchronized to reinforce each other in achieving a common end, the
satisfaction of final consumers.

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 It is considered as multifaceted point of view meaning it has many aspects and
perspective, it is from different views and with different approaches. So it involves multiple
institutions making simultaneous progress on various fronts towards the same goals. A
multifaceted system creates the positive conditions for the effective involvement of individuals,
providers, and institutions in these processes.

It has a vertical structure meaning the organization has a hierarchical model where
authority and communication typically flow from the top down. It is arranged in order of rank
one in which people have different ranks or positions, depending on how important they are.

It is market-oriented meaning it is a customer-centered approach to product design. It

involves market research aimed at determining what consumers view as their immediate needs,
primary concerns, or personal preferences within a particular product category.

The scope is the extent of the area or the application and effectiveness or subject matter
that something deals with or to which it is relevant.

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 The biotechnology is a multidisciplinary area that is applied to pharmaceuticals,
agriculture, food sciences, and forestry sciences. Its application results in improved medicines,
more productive crops, and even more resilient materials, among others. Let us look of its
applications:

a. environmental biotechnology which serves to create a sustainable crop as well as to

optimize natural resources. Some faculties of microorganisms, fungi, enzymes and
plant are used to recover contaminated ecosystems.
b. industrial biotechnology where it uses enzymes and microorganisms to develop new
materials and biotechnological process. It can be applied to packaging, hydrocarbons,
chemical products, cosmetics, biofuels, renewable fuels, textiles and much more.
c. plant biotechnology is a series of techniques used to improve the varieties of
plants, with the aim of avoiding insect pests, diseases and weeds that can
destroy crops. It is also used for phytoremediation, a combination of plant
and environmental biotechnology, which uses plants to decontaminate soils,
purify water and clean indoor air.
d. Animal biotechnology studies three bit areas: animal genomics, the cloning
of animals, and transgenic animals. The aim is to promote human health,
improve the health of land animals, develop improved foods, and contribute
to preserving the environment

Fishes involved in the inland fishery are freshwater and cannot survive in salt water. Fishes
involved in the marine fishery can survive only in saltwater or marine environment. In inland
fishery, a significant number of fish are cultivated for human consumption in ponds, tanks, or
lakes. Ornamental fish culture is the culture of attractive, colourful fishes of various
characteristics, which are reared in a confined aquatic system. Farmers and hobbyists mainly
grow it and these fish are also known as living jewels.

Organic farming is an agricultural system that uses ecologically based pest controls and
biological fertilizers derived largely from animal and plant wastes and nitrogen-fixing cover
crops. Modern organic farming was developed as a response to the environmental harm caused
by the use of chemical pesticides and synthetic fertilizers in conventional agriculture, and it has
numerous ecological benefits.

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 Biocontrol agent is the practice or process by which an undesirable organism is controlled
by means of another (beneficial) organism. Parasitism. A method of controlling pests, whether
pest animals such as insects and mites, weeds, or pathogens affecting animals or plants by using
other organisms.

Micro irrigation is a low-pressure, low-flow-rate type of irrigation that can reduce the
likelihood of overwatering a landscape. This form of irrigation delivers water directly to where it
is needed most-the root zone of plants. In micro irrigation, water is delivered through various
methods, including drip emitters and micro-sprinklers. Drip irrigation, on the other hand,
specifically focuses on delivering water through a network of tubes and emitters placed near the
plant's roots.

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 C. Agribusiness Enterprise Formation

Agricultural Enterprises refer to businesses involved in the production of crops or livestock

for domestic or international markets, ranging from large-scale industrial operations to small to
medium scale farms.

If the farm business is successful, the rewards are many and could include wealth, fame,
recognition, etc. Every business pass through five basic business cycles of start-up, growth,
shake-out, maturity and ageing. Should the farm business fail due to crop failure in crop
production or disease outbreak on his poultry farm in case of livestock farming he may lose his
home if pledged as collateral, have to change his lifestyle and even lose some liberty if declared
bankrupt.

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 D. The Role of Agribusiness Sector to Economic Development

Agribusiness and its role in economic development has given rise to much debate.
Although it is frequently perceived in terms of negative externalities, it remains a solid vector
for creating jobs and reducing poverty. However, agribusiness needs to resolve issues relating
to the inclusion of smallholders, respect for the environment, product quality and price
competitiveness. The agri-food sector: creating jobs and capable of reducing poverty.
Agribusiness includes processing agricultural commodities, packaging and distributing them as
marketable products as well as the related services (supplying fertilizer, seed and equipment)
and, by extension, all agricultural production systems. Agribusiness plays a crucial role in the
economic development of the Philippines for several reasons:

1. Contribution to GDP
Agribusiness significantly contributes to the country's Gross Domestic Product (GDP).
Agriculture, including agribusiness activities, accounts for a substantial portion of the GDP,
providing a foundation for economic growth in rural areas.

2. Employment Generation
The agricultural sector is one of the largest employers in the Philippines. A significant
portion of the population relies on agribusiness for their livelihoods, including farmers, laborers,
and those involved in p processing, distribution, and retail.

3. Food Security
Agribusiness is essential for ensuring food security in the country. It helps in the
production, processing, and distribution of food, contributing to the availability and accessibility
of essential food items for the population.
4. Rural Development
Agribusiness fosters rural development by improving infrastructure, such as roads and
markets, and providing access to education and healthcare services. This development can lead
to improved living standards and reduced poverty in rural communities.

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 5. Export Opportunities
The Philippines has a variety of agricultural products, such as bananas, coconuts, and
seafood, that are significant for export. Agribusinesses contribute to foreign exchange earnings,
enhancing the country’s economic stability.

6. Innovation and Technology Adoption

Agribusiness encourages the adoption of new technologies and practices, which can
improve productivity and sustainability in agriculture. This includes advancements in crop
management, biotechnology, and sustainable practices that address environmental challenges.

7. Linkages with Other Sectors

Agribusiness creates linkages with other sectors of the economy, including manufacturing
and services. For example, food processing and retailing are integral parts of the agribusiness
value chain, providing opportunities for economic diversification.

8. Sustainability and Environmental Impact

As agribusiness grows, there is a growing emphasis on sustainable practices to mitigate
environmental impacts. This includes initiatives to promote organic farming, reduce waste, and
ensure the responsible use of resources.
Therefore, agribusiness is integral to the Philippine economy, supporting growth,
employment, and food security while also presenting challenges that need to be addressed, such
as climate change, market access, and rural infrastructure development. Investing in agribusiness
can lead to significant improvements in the overall economic landscape of the Philippines.
E. Growth Trends & Prospects in the Food Sector

Our planet is currently facing unprecedented interconnected environmental, societal, and

economic dilemmas due to climate change, the outbreak of pandemics and wars, among others.
These global challenges pose direct threats to food security and safety and clearly show the
urgent need for innovative scientific solutions and technological approaches. Backed by the
current alarming situation, many food-related trends have emerged in recent years in response to
these global issues.
On the other side, many digital advanced technologies (e.g., artificial intelligence, big data,
the Internet of Things, blockchain, and 3D printing) have been increasingly applied in smart
farms and smart food factories to improve food system outcomes. Increasing adoption of vegetal
innovations and harnessing Industry 4.0 technologies along the food supply chain have the
potential to enable efficient digital and ecological transitions.
Food is an important part of our lives, which is why the way it is grown, manufacture and
transported is worth understanding and improving. The food industry causes a series of
industrial activities.

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 Currently, the food supply chain is facing serious sustainability and security challenges that
can be fuelled by climate change, the rapid growth in the world's population, and the ongoing
international conflicts and pandemic outbreaks. Consequently, all actors within the food supply
chain (e.g., manufacturers and retailers), as well as policy makers, and non-profit organizations
are looking for innovative solutions to render the food system more sustainable and resilient.
This has been backed by increasing consumers' awareness about the relatedness among their
dietary habits, health, nutrition, and sustainability
Digitalization is continuously evolving with the aim to enhance productivity, reduce food
safety risk, and improve the overall sustainability of the vegetal supply chain. Many Industry 4.0
technologies such as AI, IoT, BD, blockchain, robotics, and smart sensors are being employed by
the whole vegetal supply chain from farm to fork.
Artificial intelligence (AI) is happening in almost all industries (including the agriculture
and food industry) on a global scale.
IoT (Internet of Things) is a network of connected devices that collect and share data with
other devices and systems. This allows easy access to live data as well as its storage and
distribution to stakeholders and decision makers. Consequently, processes and products can be
monitored in real-time, and thus accelerating the move toward precision agriculture technologies
and smart farming practices. IoT is slowly being embraced by large food businesses. For
instance, IoT-based technologies such as remote monitoring systems, decision support tools,
automated irrigation systems, frost protection systems, and fertilization systems support
agricultural operations.
Most IoT applications in the food industry focus on the control of traceability, temperature,
humidity, color, and enhancement of sustainability performance. Other parameters that have
been controlled via IoT include soil nutritional content, humidity, temperature, and plant
physiology, such as the vegetative index, nutritional requirements, electrical conductivity, and
magnetic susceptibility. All this information allows more precise crop monitoring.
Big Data (BD) refers to large, fast and complex data that cannot be processed and
managed by classical and traditional techniques. Big Data Analytics (BDA) is the process of
using sophisticated analytics on BD. The most current or potential applications of BD in
vegetables, fruits and other plant-based sectors include optimal planting of fruit trees using data
extracted from satellite and unmanned aerial vehicle imagery, characterization of size and shape
phenotypes of horticultural crops using high throughput imagery, improvement of controlled
environment agriculture, such as soilless hydroponics and others for vegetable and fruit farming,
and mitigating post-harvest losses and managing fruit and vegetable quality through machine
learning.
The need for these advanced technologies in agriculture and the food industry has been
exacerbated by the COVID-19 outbreak. Automation and robotization are other aspects of digital
technology and play significant roles in agriculture to achieve smart farming/precision
agriculture and in the food industry to accelerate the move toward smart factories. Nowadays,
advanced robots and drones are equipped with smart sensors and can cooperate with humans to

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perform many tasks in the production field, such as crop production (such as seeding, planting,
weeding, picking, handling, and harvesting) or during the later stage of the food manufacturing
chain, e.g., packaging, cutting, slicing, and packaging.
In recent years, agriculture and the food industry have experienced significant disruptions
due to pandemic outbreaks, large-scale geopolitical conflicts, and climate change, among others.
Agri-food systems are undergoing a digital transformation at different stages along the food
supply chain, from farmers to consumers, covering the food production (precision
agriculture/smart farming) and food manufacturing industries (smart food factories). This work
briefly discussed recent developments in digitalization and the newest innovations in plant-based
foods and the interconnection between vegetal and digital trends.
Currently, the market of vegetal products is gaining momentum with the growing demand
for plant-based food products that are increasingly proposed as sustainable alternatives to
conventional meat, seafood, egg, and dairy. Numerous obstacles, mainly related to consumers’
acceptance of sensory properties and nutritional quality, not to mention a certain psychological
reluctance towards new sources (food neophobia), are still hindering their wider
commercialization, but these issues could be mitigated by comprehensive information on the
advantages and by properly incorporating innovation and emerging technologies.
Indeed, Industry 4.0 technologies, including AI, BD, IoT, blockchain, robotics and smart
sensors have been increasingly applied to solve many challenges in the agri-food sector.
Increasing evidence shows that digital technologies and other technological advances could be
leveraged to accelerate the shift to vegetal diets, thus contributing to the transition to more
sustainable food systems. The whole journey of plant-based food starting from the primary
vegetal production, to processing, distribution, retail, and finally to the consumer, could be
assisted through digital solutions that could increase food nutritional quality, safety, and
transparency.
For example, IoT-based technologies are being used at various stages along the vegetable
supply chain, to help achieve accurate control and monitoring of numerous agricultural
operations, enhancing crop productivity. Implementation of AI-based solutions can provide many
opportunities at the agricultural stage to test soil, improve crop yield, detect ripe products
automatically, predict crop diseases, etc. or at later manufacturing stages to develop new recipes
for plant-based products. Other digital and Industry 4.0 technologies are revolutionizing the agri-
food sector ad taking it to the next generations, enabling smart food production and
manufacturing.
However, investment and knowledge and skills required to ensure the successful
implementation of new technologies, in addition to technophobia and resistance to change
(silo mentality) could be highlighted as significant barriers facing the digital revolution. More
multidisciplinary research is encouraged to overcome current limitations, build a balanced
sustainable future food, and set food systems on a better course.

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