Republic of the Philippines

Tarlac Agricultural University

COLLEGE OF BUSINESS AND MANAGEMENT
Malacampa, Camiling, Tarlac
1st SEMESTER 2022-2023

Agribusiness encompasses the economic sectors for farming and farming-related

commerce. It involves all the steps for getting agricultural goods to the market,
including production, processing, and distribution.

Agribusiness is an important part of the economic market with job opportunities

involving important commodities like crops, livestock and biofuels. If you're

AGRIBUSINESS AND
considering a career in agriculture, knowing what agribusiness is and how each of
its components relates to another can help you in your job search. Learning more
about what makes up agribusiness can help you understand the food production
system and all the related businesses that comprise the agriculture industry.

MANAGEMENT Agribusiness refers to the industry of agricultural products and services involved
in growing, processing and distributing food. Agribusiness includes small and
largescale farming operations, farming equipment such as tractors and harvesters,
growth aids like fertilizer, food processing plants and distribution chains involved in
shipping, storing and selling food.

The agribusiness industry also produces materials grown for non-consumable

products. One way to remember the key elements of agribusiness is through the
four "F's":

• Food: The main component of agribusiness includes creating products for

consumption such as meat, vegetables, fruit, grains and dairy.
PREPARED BY:
• Fiber: Materials produced by plants or animals help create other products
MS. ALLIAH MAE M. GAMUROT like textiles.
Instructor
• Forest: Agribusiness uses natural elements like forests to make consumer
products.
 • Fuel: Farms produce energy such as biofuel to serve as renewable fuel
sources.
WHY IS AGRIBUSINESS IMPORTANT?
Agribusiness supports the growth of the agricultural industry, which leads to
economic growth across countries. Since countries can export their products, this
allows for an increase in revenue sources.
Below are some other benefits of agribusiness:
• Enhances agriculture productivity: Agribusiness creates a more
productive and efficient operation through the use of new food production
technologies and improved growing methods.
• Improves systems of food security : By developing innovative ways
for growing crops, agribusiness components can lead to greater levels of
food security for a community.
• Creates sustainable food production: Agribusiness often involves
using sustainable practices like crop rotation to produce food.
• Lowers food prices for consumers: Agribusiness can increase crop
yields through effective growing and distribution methods, often reducing
food costs for consumers.
• Reduces poverty: Through the reduction of food prices and the creation
of jobs, agribusiness can help reduce poverty, leading to a higher quality of
life for a community or country.
FACTORS THAT AFFECT AGRIBUSINESS
Since agribusiness is a type of commerce, many market forces such as supply
and demand and the state of the economy affect the industry. Here are some of
the main factors affecting agribusiness:
Changes in consumer tastes
As food trends change, farms make adjustments to grow the new demanded
product.
Crop production
Farmers produce various vegetables and fruits to support the food system. They
use practices such as crop rotation to produce more crops using less land and
fewer resources.
Land availability
Because much of agribusiness depends on the crops produced, the amount of
land available is an important factor. If land becomes commercialized, it
decreases the amount available for farming.
Technology use
Agribusiness sectors are beginning to implement new technologies, like drones,
to perform tasks such as conducting field analyses and planting and monitoring
crops.
Environmental changes
Farms are now finding practices to adapt to the changing weather patterns to
ensure they continue growing crops effectively.
Agricultural production systems are simply the ways in which a farmer makes
use of available resources to meet their food, fuel, and fiber demands.
Around the world, production systems are characterized by multiple combinations of
physical conditions (e.g., climate, altitude, soils) and socio-economic
conditions (e.g., capital, cultural practices, education, age, land size and tenure).
Agricultural production systems can be classified according to the following general
categories:
 • Subsistence farming. Smallholder farmers produce food (crops or
livestock) for themselves and their families. Inputs, such as fertilizer
and improved seeds, are often lacking, resulting in low productivity.
• Pastoral or livestock farming. Pastoral farming only produces
livestock and does not include crops. Livestock is primarily raised to
produce labor and commodities such as meat, milk, eggs, wool, and fur.
• Nomadic farming. Similar to pastoral farming, herdsmen relocate
their livestock in search of suitable grazing land and water. Livestock
typically consists of cattle, sheep, goats, camels, horses and donkeys.
• Shifting cultivation. Farmers clear a plot of forested land by felling
or burning vegetation. Wood products may be used for timber or other
purposes. The newly cleared land is then used to grow crops.
• Arable farming. Farmers only grow crops at small or commercial
scales. Crops are often, but not limited to, annuals, such as vegetables,
grains, legumes, etc. Arable farming also includes paddy rice.
• Plantation or tree crop farming. Often found in tropical climates,
plantation farming is characterized by monocropping at commercial
scales (> 40 hectares (ha)). For instance, if a farmer decides to grow
wheat, the entire plantation will consist of wheat.
• Mixed farming. Farmers grow crops and raise livestock at the same
time on the same piece of land. Different crops with different maturity
periods are grown at the same time, with continuous cropping
throughout the growing season. Mixed farming is typically practiced at
small to medium scales. Agroforestry systems encompass aspects of
mixed farming.
Agricultural processing can also be called agro-processing and it is defined as
one or more of the operations that transforms, package, sort, or grade livestock or
livestock products, agricultural commodities, plant or plant products into goods that
are used for intermediate or final consumption including goods for nonfood use
such as the products of forestry.
Agricultural processing can also be seen as the act of changing an agricultural
product (fruits, nuts and vegetables) from its natural state to a different form, such
as grapes to wine, apples to juice or sauce, etc. Bear in mind that every agricultural
product can be processed into one or more products.
TYPES OF AGRICULTURAL PROCESSING
Agricultural processing can be classified into three major commodity groups:
• Crop processing - is a crucial aspect in the production cycle which
involves the transformation of raw materials harvested from the farm into a
valuable marketable product.
• Livestock processing- has to do with all the operations involved to
bring livestock to the market and consumers. These operations involves;
preslaughter handling, stunning, and slaughtering.
• Fish processing- has to do with the transformation of fresh fishes of any
kind to consumable ones. This refers to the mechanical or chemical
operations performed on fish in order to transform or preserve them. Fish
are processed in a variety of ways and in different working environments.
Removing the entrails from fish (e.g. gutting or cleaning) is a simple
processing technique designed to extend shelf life.
• Fruit processing - preparation of fruit for human consumption. Fruit is
sometimes defined as the product of growth from an angiosperm, or
flowering plant. From a purely botanical point of view, the fruit may be only
the fleshy growth that arises from the ovary of a flower and may not
necessarily include any other structures.
IMPORTANCE OF AGRICULTURAL PROCESSING
Employment generation: Agro processing takes place in agro industries,
and these industries have the capacity to absorb a vast amount of manpower in
the primary and secondary level of production. Due to the seasonality of
agriculture, a production season may experience high and low demand for
labour on the farm. Conversely, after harvesting the processing industry can
absorb a whole lot of manpower thus creating jobs for the unemployed and
generating income for their livelihood.
• Improving food self-sufficiency: Processing can also extend the
period of availability of food products, reducing the “hungry gap”
between harvests and mitigating the seasonal rise in food costs at these
times, which puts so many people at nutritional risk.
• A better nation’s GDP: Some countries like Brazil and some Asian
countries like Malaysia and the likes get huge returns from the export of
agricultural products mostly in their processed forms, example is rice.
Majority of the inputs in the manufacturing industry are agricultural
products. Rubber Latex is used as a raw material in the shoe and tyre
industries.
• Promotes socio-economic development: Strong relationships
can exist between agro industries, agriculture and poverty alleviation.
Agro industries provides capital and services to farmers (e.g. seeds and
equipment, training, production and market information), promotes
entrepreneurship, raises demand for agricultural products and connects
farmers with markets through the handling, processing, marketing and
distribution of agricultural products.
• Feed for animals and manures for plants: Large quantities of
agricultural “waste” produced in one location which can be transformed
into useful products such as animal feed and plant manure, which will
also help farmer conserve income.
CONSTRAINTS FACING AGRICULTURAL PROCESSING
• Infrastructural problems
• An inconsistent and insufficient supply of raw materials
• Seasonality of crops
• Poor quality of raw material supply and high losses during transport from
farm to factory
• Inappropriate or obsolete processing and ancillary equipment
• Poor and inconsistent quality of processed products
• Sub-optimal use of processing facilities and equipment
• Poorly trained personnel and a lack of qualified food technologists
• A lack of proper hygiene and sanitation practices
• Inappropriate packaging materials and high packaging cost
• Weak or non-existent market development
• A lack of technical support for the agro industrial sector
• Absence of good management of the processing facility once
commercialized
An agricultural farm is a piece of land where various agricultural activities are
carried out to produce food, fiber, and other products. Farms can specialize in
growing crops, raising livestock, or a combination of both. Here are examples
of
different types of agricultural farms:
1. Crop Farms: Agricultural enterprises primarily focused on the cultivation of
crops for various purposes, including food, feed, fiber, and industrial uses.
These farms can vary widely in size, scale, and the types of crops they
grow. Here are some common types of crop farms:
• Grain Farms: These farms focus on growing grains such as wheat, corn
(maize) The Queen of Cereals, rice, barley, and oats.
• Fruit Orchards: Farms that cultivate fruit-bearing trees and plants,
including apple orchards, orange groves, and vineyards for grapes.
• Vegetable Farms: Farms that grow vegetables such as tomatoes,
lettuce, carrots, and broccoli.
• Plantation Farms: These farms cultivate large-scale crops like tea,
coffee, rubber, and sugarcane.
2. Livestock Farms: also known as animal farms or ranches, are agricultural
operations primarily focused on the breeding, raising, and management of
domesticated animals for various purposes. Livestock farming encompasses
 a diverse range of animals, each serving different roles and providing
various products. Here are common types of livestock farms:
• Dairy Farms: Farms that primarily produce milk and dairy products, often
by raising cows or goats.
• Poultry Farms: Farms that focus on raising chickens, ducks, goose or
turkeys for eggs and meat.
• Cattle Ranches: Farms that raise cattle for beef production. Raise cows
for the production of milk and dairy products such as cheese, butter, and
yogurt.
• Sheep Farms: Farms that raise sheep for wool, meat, and other
products. Raise goats or sheep for milk and dairy products, including goat
cheese and sheep cheese.
3. Mixed Farms: also known as mixed-use or diversified farms, engage in a
combination of crop cultivation and animal husbandry. These farms
integrate various agricultural activities to optimize resource utilization,
enhance sustainability, and diversify income streams. Here are some key
features and examples of mixed farms:
• Crop and Cattle Farms: Combine the cultivation of crops with the
raising of cattle. Crops can provide feed for the livestock, and animal
manure can be used to fertilize the fields.
• Agroforestry Farms: Integrate trees and shrubs with crops and/or
livestock. This approach promotes biodiversity, enhances soil fertility, and
provides multiple products from the same land, such as timber, fruits, and
animal forage.
• Polyculture Farms: Grow multiple crops simultaneously, often including
a combination of grains, vegetables, and sometimes fruit trees. Livestock,
such as chickens or goats, may also be part of the system.
• Integrated Aquaculture Farms: Combine fish farming with crop
cultivation. For example, fish ponds may be integrated with rice paddies,
creating a symbiotic relationship where fish waste fertilizes the rice and rice
fields help filter and purify the water for the fish.
• Mixed Livestock Farms: Raise various types of livestock on the same
farm, such as cows, pigs, and chickens. This diversity can provide a range of
products, including meat, dairy, and eggs.
• Organic Mixed Farms: Integrate organic crop cultivation with organic
livestock management, emphasizing sustainable and environmentally
friendly practices.
4. Specialized Farms: focus on the cultivation or raising of specific crops,
livestock, or products, often emphasizing expertise in a particular niche.
Specialization allows farmers to optimize their resources and operations for
a specific market or product. Here are examples of specialized farms:
• Aquaculture Farms: Farms that cultivate fish or other aquatic organisms
in controlled environments. Cultivate fish in controlled environments for
human consumption. Common species include salmon, trout, tilapia, and
catfish.
• Horse Farms: Raise horses for various purposes, including recreation,
racing, show, and sometimes for meat in certain regions.
• Winery Farms: Specialize in cultivating grapevines and producing wine.
• Citrus Orchards: Specialize in growing citrus fruits such as oranges,
lemons, and grapefruits.
• Floriculture Farms: Specialize in the cultivation of flowers for
ornamental and decorative purposes.
• Nursery Farms: Focus on propagating and selling plants, trees, and
shrubs for landscaping and gardening.
• Spice Plantations: Grow spices such as pepper, cinnamon, vanilla, or
cardamom.
• Beekeeping Farms: Specialize in beekeeping for honey production and
sometimes other hive products like beeswax and royal jelly.
• Cotton Plantations: Focus on cultivating cotton plants for the
production of cotton fiber used in textiles.
• Mushroom Farms: Specialize in the cultivation of various mushroom
varieties.
 • Herb Gardens: Grow a variety of herbs for culinary, medicinal, or
aromatic purposes.
5. Organic Farms: are agricultural operations that follow organic farming
principles and practices. Organic farming is an approach that emphasizes
sustainable and environmentally friendly methods of crop cultivation and
animal husbandry. Organic farmers avoid the use of synthetic pesticides,
fertilizers, genetically modified organisms (GMOs), and antibiotics. Instead,
they rely on natural and organic inputs to maintain soil fertility, control
pests, and ensure the health and well-being of plants and animals.
• Organic greenhouse refers to a controlled environment for plant
cultivation that follows organic farming principles. While traditional
greenhouses use controlled conditions like temperature, humidity, and light
to optimize plant growth, organic greenhouses take it a step further by
adhering to organic agricultural practices.
Organic fertilizers are derived from natural sources and contain essential
nutrients for plant growth. Unlike synthetic or chemical fertilizers, organic fertilizers
are derived from organic materials such as plant and animal waste. They contribute
to soil fertility, improve soil structure, and promote sustainable agricultural
practices. Here are some common types of organic fertilizers:
• Compost: Compost is one of the most well-known organic fertilizers. It is
produced by decomposing organic matter such as kitchen scraps, yard
waste, and manure. Compost adds organic matter to the soil, enhances soil
structure, and provides a range of essential nutrients for plant growth.
• Vermicompost also known as worm castings or worm compost, is a
nutrient-rich organic fertilizer and soil conditioner produced through the
composting process with the help of earthworms.
• Manure: Animal manure, such as cow, chicken, or horse manure, is a rich
source of nitrogen, phosphorus, and potassium. Manure can be composted
before use to reduce the risk of pathogens and to improve its nutrient
content. It is commonly used in organic farming to enrich the soil.
• Bone Meal: Bone meal is made from ground animal bones and is a good
source of phosphorus and calcium. It is often used to promote root
development and flowering in plants. Bone meal is slow-releasing and
provides a long-lasting source of nutrients.
• Blood Meal: Blood meal is a nitrogen-rich fertilizer made from dried
animal blood. It is a quick-release fertilizer that provides an immediate
source of nitrogen to plants. Blood meal is often used to boost nitrogen
levels in the soil.
• Fish Emulsion: Fish emulsion is a liquid fertilizer made from fish waste,
such as the remains of fish processing. It is a good source of nitrogen,
phosphorus, and trace minerals. Fish emulsion is known for its quick
absorption by plants.
• Seaweed and Kelp: Seaweed and kelp extracts are derived from marine
plants. They contain a range of nutrients, including potassium, trace
minerals, and growth-promoting hormones. Seaweed and kelp are often
used to improve plant resistance to stress and enhance overall plant health.
• Green Manure: Green manure involves growing specific cover crops,
such as legumes or clover, and then incorporating them into the soil before
they reach maturity. These cover crops add organic matter, fix nitrogen, and
improve soil structure.
• Guano: Guano is a natural fertilizer derived from the excrement of
seabirds or bats. It is rich in nitrogen, phosphorus, and potassium. Guano is
available in both liquid and granular forms.

• Rock Phosphate: Rock phosphate is a natural mineral source of
phosphorus. It is derived from rock deposits and is a slow-release fertilizer.
Rock phosphate helps improve root development and flowering in plants.
Agricultural marketing involves the activities and processes related to getting
agricultural products from the farm to the consumer. It encompasses various stages,
from production and distribution to the final sale of agricultural goods. Here are key
aspects of agricultural marketing:
• Production and Harvesting: Agricultural marketing starts with the
production of crops and livestock.
• Storage and Handling: After harvesting, agricultural products may
need proper storage to maintain quality. Storage facilities help prevent
spoilage and allow for a continuous supply to the market, even during non-
harvest seasons.
• Processing and Value Addition: Some agricultural products undergo
processing to create value-added products. For example, raw milk can be
processed into cheese, fruits into jams, or grains into flour. This adds value
to the products and provides consumers with a variety of choices.
• Transportation: Efficient transportation is critical to getting agricultural
products from farms to processing facilities, markets, and eventually to
consumers.
• Market Research: Farmers and marketers engage in market research to
understand consumer preferences, market trends, and competitive
dynamics.
• Pricing and Negotiation: Setting fair prices for agricultural products is
crucial for both farmers and consumers. Negotiation and price determination
take place at various stages of the supply chain,
• Market Channels: Agricultural products reach consumers through
different market channels. These include traditional markets, supermarkets,
farmers' markets, online platforms, and export channels.
• Government Policies: play a significant role in agricultural marketing.
Subsidies, price supports, and trade policies can impact the competitiveness
of agricultural products domestically and internationally.
• Quality Assurance and Certification: ensure that agricultural
products meet specific criteria for safety and quality.
• Consumer Awareness and Promotion: Marketing efforts also focus
on creating awareness among consumers about agricultural products. This
includes advertising, labeling, and promotional activities that highlight the
benefits and characteristics of specific products.
• Technology Adoption: The use of technology, such as precision
agriculture, e-commerce platforms, and data analytics, is increasingly important in
modern agricultural marketing.
Agricultural marketing is a dynamic and complex field that involves coordination
among various stakeholders to ensure the efficient flow of agricultural products
from farm to fork. It plays a crucial role in supporting the livelihoods of farmers,
ensuring food security, and meeting the diverse needs of consumers.
DIFFERENT FORMS OF UTILITY IN MARKETING
In marketing, the term "utility" refers to the value or usefulness that a product or
service provides to consumers. There are different forms of utility that contribute to
the overall satisfaction and desirability of a product. These forms of utility are often
categorized into four main types:
1. Form Utility: is the value created by converting raw materials and
components into a finished product.
  Example: A bakery transforms flour, sugar, and other ingredients into a
finished cake. The process of baking and decorating adds form utility to the
ingredients, making the final product more valuable to consumers.
2. Place Utility: is the value created by making a product available at a
location convenient for consumers.
 Example: An online retailer provides place utility by allowing consumers to
purchase products from the comfort of their homes. This convenience adds
value to the products by eliminating the need for consumers to travel to a
physical store.
3. Time Utility: Time utility is the value created by making a product available
at a specific time when consumers want or need it.
 Example: A grocery store that stays open late into the evening provides time
utility by allowing consumers to purchase groceries at a time that suits their
schedule. This flexibility adds value to the products and services offered.
4. Possession Utility: is the value created by facilitating the ownership or
possession of a product.
 Example: Credit card companies provide possession utility by allowing
consumers to make purchases even if they don't have the immediate funds.
This deferred payment option adds value to the products and enables
consumers to possess and use items before paying for them.
These forms of utility are crucial considerations in marketing strategies. Successful
businesses focus on creating and maximizing these utilities to meet the needs and
preferences of their target audience. Additionally, advancements in technology and
changes in consumer behavior can impact the way these utilities are delivered. For
example, e-commerce and digital platforms have significantly influenced the way
businesses provide place and time utility to consumers.
DIFFERENT TYPES OF FARMERS
Farmers are individuals or groups of people engaged in the cultivation of crops,
the raising of livestock, or other agricultural activities. They play a crucial role in
producing food, fiber, and other essential products for human consumption and
industrial use. Crop Farmers: who primarily focus on cultivating and harvesting
crops, such as grains, fruits, vegetables, herbs, and spices.
• Livestock Farmers:Farmers whose main emphasis is on raising and
breeding animals, such as cattle, poultry, sheep, pigs, and goats, for various
purposes like meat, dairy, wool, and other by-products.
• Mixed Farmers: who engage in a combination of both crop and livestock
farming. This approach provides a diversified income stream and risk
management.
• Specialized Farmers: who concentrate on specific agricultural activities
or products, such as dairy farming, beekeeping, aquaculture, floriculture,
and organic farming.
• Cash Crop Farmers: who grow crops primarily for sale rather than for
personal consumption. Common cash crops include cotton, tobacco, coffee,
and tea.
• Subsistence Farmers: who grow crops and raise livestock primarily to
meet the needs of their own families with little surplus for sale. Subsistence
farming is often practiced in developing regions.
• Urban Farmers: who practice agriculture in urban or peri-urban areas,
often using innovative methods such as rooftop gardens, vertical farming, or
community gardens.
• Commercial Farmers: who operate large-scale, profit-oriented
agricultural businesses. They often use modern technology, machinery, and
practices to maximize yields and profits.
 • Smallholder Farmers: who operate small-scale farms, often with
limited resources. Smallholder farmers play a vital role in global food
production, especially in developing countries.

• Contract Farmers: who work under contractual agreements with

agribusinesses or food processing companies. They may grow specific crops
or raise certain livestock based on contracts with buyers.

These categories help distinguish the various roles and focuses within the
agricultural sector. Farmers may identify with one or more types depending on the
nature of their agricultural activities and goals. The diversity in types of farmers
reflects the complexity and versatility of the agricultural industry.