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What is Agribusiness?

Mary McMahon
Updated May 16, 2024
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In short, agribusiness is the business of farming. However, the word is a loaded term, especially among critics of corporate farming. For people who view large-scale commercial farming negatively, agribusiness is the antithesis of traditional small-scale family farms. For people involved in it, of course, the word is simply a convenient shorthand for saying that one is in the business of agriculture.

Agribusiness includes the production, processing, and supply of agricultural goods that range from lettuce to corn syrup. Companies may focus on things like cut flowers, fresh vegetables, or byproducts of farming such as fuels derived from farm waste. Agribusiness also encompasses farming equipment, machinery, chemicals, suppliers, and personnel. Several large companies control the bulk of the share of business, especially in the United States; this has been a cause for criticism among people who are concerned about monopolies and price fixing.

Several things characterize agribusiness, differentiating it very distinctively from family farming. The first is the scale, which is typically quite large. The second is considerable vertical and horizontal integration. For example, a company might own a facility that processes frozen vegetables, along with a controlling share in farms which produce these vegetables and companies which provide personnel to harvest and transport them. Agribusiness is also distinguished by being run like a true business, with administrators rather than farmers at the helm of companies in the agriculture business.

This highly efficient and streamlined organization allows agribusiness to keep food costs low. This is an important priority for many consumers and governments, who also appreciate its standardization, which is in theory supposed to limit the possibility of food borne contamination and other issues with the food supply.

The rise of agribusiness began in the 20th century, when citizens of countries in the developed world began flocking to their cities, leaving a shrinking population of farmers struggling to meet the demand for food. Over time, agricultural companies arose, using their size and business experience as leverage to create a highly efficient system of farming and transporting agricultural goods. One major criticism of agribusiness is that it has been too successful, driving down price points and forcing small farms out of business as they cannot compete with big firms.

Critics have also expressed concerns about a heavy focus on chemicals to control problems which arise on farms. Pesticides, herbicides, and a variety of pharmaceuticals are all often a big part of agribusiness, for example. It also distances people from the source of their food, as any glance at the produce section at a major market will confirm; rather than meeting food producers, people can purchase grapes from Chile, peppers from Africa, and rice from China.

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Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By anon251294 — On Feb 29, 2012

Thank you very much for your article. It is very rich, informative and accurate. I am majoring in Agribusiness and this website will be my companion to learn as much as can about agribusiness, how to create it and the issues surrounding it.

By helene55 — On Apr 20, 2011

@Denha - I imagine you got some of that information from King Corn, a documentary on the corn business in Iowa. Even if you didn't, I have seen that and really enjoyed it.

If you are interested in watching it, it is the story of 2 college friends who go back to their roots in Iowa, buy an acre of land from a farmer, grow corn on it, and see what happens to that corn. It is entertaining and also sort of scary in the way these two 20-somethings discover what really happens to the food people eat, and how it gets to us.

Another documentary on a similar subject is Food, Inc. I have not seen it, but hope to do so.

By Denha — On Apr 18, 2011

One of the other causes of agribusiness, though I suppose it is disputed and not considered "fact" was the governmental changes that happened in the mid-20th century. In the 1970s especially, the then-secretary of Agriculture told farmers to "get big or get out" and wanted cheap food- this of course costs us in other ways, but anyway, that was part of the beginning of governmental influence on farming and farm profits, which became more and more influential on how we all eat.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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