What is Agribusiness?
Agribusiness is doing business with agricultural products. Agribusiness is a term that bridges Agriculture and Business.
Agribusiness includes all business entities that buy from or sell to farmers. The transaction can include a product, a commodity or a service and involves products such as feed, crop, fertilizer facilities, electricity, machinery, etc. Agricultural goods, such as food and fibre, etc. Facilitative services, such as loans, marketing of insurance, storage, manufacturing, transport, packaging, distribution, etc.
Agribusiness,’ the complete number of all operations involved in the cultivation, production, farm operations, processing and distribution of agricultural commodities and goods derived from them’ (David and Goldberg, 1957), is an important sector in many Asian countries’ economies.
It contributes to GNP and rural employment in a significant way. Since the majority of agribusiness operations are in rural areas, growth can be an important tool to slow down urbanization. In addition, agri-business promotion can become a valuable means of alleviating poverty and a significant source of foreign exchange profits. It is perceived to be strategically important to national security in some countries. Agribusiness can also be characterized as the science and practice of backward and forward-looking activities relating to production, processing, marketing and trade, the distribution of raw and processed foodstuffs, feed, fiber, including the provision of inputs and the provision of services for such activities.
Bangladesh is predominantly an agricultural country that is subjugated by the production of crops. By and large, Bangladesh enjoys a sub-tropical monsoon climate. Bangladesh is known for cultivating a wide range of tropical crops, including rice, wheat, tobacco, jute, peas, oilseeds, sugar cane, etc.
In a developing country such as Bangladesh, four main sectors such as the input sector, the commercial farm production sector, the commodity sector (storage, manufacturing, marketing, wholesale and retail), the service sector are the agribusiness system with forward and backward relations (education ,banking, finance, investment and technical advice).
One of the world’s developing countries marked by a high incidence of landlessness and a labor surplus economy is Bangladesh, home to more than 160.00 million people. With the idea of market economies for sustainable growth, the global economic climate is witnessing dramatic changes. In such a climate, both agribusiness and industrial development are stagnating the aid pipeline, drying up remittances and becoming shy as an investment series. Only exports offer the most promising avenue for sustained growth, especially in non-traditional areas.
In this context, through increased domestic agricultural production, agro-based business processing industries have ample and fresh opportunities for jobs and revenue generation.
The supply chain management of agriculture needs to be made more effective in order to realize the full potential of producing non-food agriculture, and agribusiness can play a key role here. Focusing on the commercial profit-making perspective, agribusiness creates successful interconnections between agricultural inputs, the manufacturing sector and the manufacturing-processing sectors that contribute to manufacturing and post-production activities, including processing, storage and marketing.
Given the limited scope for further growth in conventional agriculture, agribusiness opens up an option for overcoming obstacles and improving the diversification of agricultural production. It also supports the inherent requirements already developed into the current agricultural system for its effective growth. It is also clear that, relative to agricultural activities, there has been a growing trend towards moving towards non-farming occupations in rural areas.
The agribusiness system with forward and backward ties in a developing country like Bangladesh consists of four major sectors such as
- Input sector
- The industrial farm manufacturing field
- Product industry (storage, processing, marketing, wholesaling, and retailing)
- Service industry (education, banking, finance, investment, and technical advice)
These four sectors serve as interrelated components of a framework in which, to a large degree, the performance of each sector depends on the proper functioning of the other sectors. Agribusiness is therefore all about how to conduct a profitable business in the sectors linked to food and agriculture. Agribusiness management is nothing but the implementation of agricultural management concepts.
Agro-based organized sectors:
› Business service
› Agricultural Education.
Meat, milk, and milk products
Last year, the livestock sector provided huge opportunities for beef, milk, and milk products to be produced. In Bangladesh, there are many organizations such as Milk Vita, Aftab Group, Arong Group, which are involved in this form of agribusiness and earn a large profit that contributes to our GDP. The Bengal Meat Company in Pabna is programmed to process meat and is doing monopoly business in Bangladesh.
Poultry products, fish products
A day is now commonly performed in the poultry industry in Bangladesh, which is one kind of agribusiness. For this type of profitable company, poultry farm is widely developed, particularly in savar areas and throughout the country. The fish processing business, on the other hand, is rising well. Processing fish are exported to other countries such as Shrimp, Hilsa, Tela pia, Rui, Mrigel, etc. by meeting our demand that contributes to our GDP growth. Significant sectors of agribusiness are also fish products.
Poultry and other equipment business
The demand for poultry equipment has increased in recent years because of the success of the poultry industry. Bangladesh’s poultry supplier groups are Agro-industrial Trust, Iqbal Brother, and Riaz Uddin co. Some other companies also do business such as fishing net, twine, and equipment.
One of the most important agro-business sectors is the tannery industry. In Bangladesh, there are 240 factories, so many involve this industry for doing business and Govt. can also export it to earn huge amounts of money.
Mushroom production and sales business
The production of mushrooms for domestic consumption and export can be enhanced by improving the state of the art of their production, as well as the important sectors of agriculture. Many companies are already producing and selling for high prices in the domestic market.
Bangladesh’s fruit industry (such as mango, banana, pineapple, jack fruit, etc.) will be the most lucrative agricultural business. Many companies such as Pran Group, Square Group, and ACI Group are doing business by processing these kinds of fruits and supplying them all year round and contributing to our GDP growth (juice, chips, etc.).
Bangladesh’s seed sector is a significant agro-based business. At present, various organizations (such as BADC, BARI, etc.) and some other private organizations supply seeds.
Feed, fodder, and bio-fertilizer business
There is a rising demand for agricultural inputs such as feed, fodder, and bio-fertilizer. to satisfy the demand of almost some public and private companies doing this business as an agricultural country.
One kind of agribusiness sector in Bangladesh is the company of flowers. There are plenty of wholesale and retail markets for flowers (Kharmar Bari and Shahabag). Many individuals are interested in it and make tremendous money.
Bio-pesticides and bio-control business
There is a lot of demand for bio-pesticides and biocontrol agents to prevent the crop from pests as an agricultural country. Many companies have been making bio-pesticides and bio-control businesses on the basis of this market, such as SUMITHION insecticide by SHETU Corporation, ACTELLIC 50 EC by ACI Bangladesh Ltd, and also by Bayer Crop Science Ltd.
Apiculture is another form of agribusiness, with most of the companies engaged in the business of apiculture, processing honey and distributing it throughout the world.
Agricultural products are perishable in nature, so fast transport and storage facilities are required. Many companies that are part of agribusiness are doing their job. The private agribusiness sector in Bangladesh emerged after the observed rise in non-farm business activities during the late 1980s and showed sustained growth well into the early 2000s. It is projected that this sector accounts for more than 10% of total GDP and that its growth is nearly double that of agricultural GDP. Therefore, there is potential to accelerate growth further, taking into account the existing opportunities in the sector, in particular, because, relative to other Asian countries, growth in the sector is still low at a similar development level.
According to reports on agribusiness practice in Bangladesh, the lack of effective value chain links between input providers, producers, traders, processors, and service providers is the main problem for agribusiness growth (Agrico Limited 2014). Any barrier to the supply of products to customers in the value chain could lead to a decrease in the overall productivity of trade, which in turn can impede the realization of the optimal gain of higher rural incomes and jobs, limiting the potential for rural development.
Given these constraints, despite government intervention with subsidized credit, improved infrastructure, tax incentives, and other fiscal incentives, the growth of the agribusiness sector has been modest in terms of regional standards and has not yet reached a level that would have a significant effect on overall growth and the reduction of poverty.
The exploitation of potential needs is well established, and a comprehensive agricultural export promotion program would have a major impact on agriculture and economic growth. This will provide farmers with higher incomes to earn foreign currency and grow the agro-processing market.