Agribusiness : What Is It All About?

Michael W. Woolverton Gail L. Cramer

Timothy M. Hammonds

Agribusiness evolved as the input supply industries, commodity processors, food manufacturers, and food distributors were established to respond to the needs of farmers and consumers. Agribusiness is an emerging academic discipline at land grant and nonland grant schools. Agribusiness: An International Journal is a new publication designed to serve as a forum for industry practitioners and university researchers.

In this, the first issue of Agribusiness, the senior editors thought it might be useful to describe agribusiness, its relationships with agricultural economics and other academic disciplines, and the types of articles we hope to publish in this international journal.

U.S. agriculture was, at its beginning, a self-contained industry. Each farm produced its own inputs such as seed, feed, draft animals, and simple farm equipment. Farm families processed the commodities they produced to make food and clothing. The small amount of commodities not consumed on-farm were sold for cash to feed and clothe the minor proportion of the country's population living in villages and cities.

The rapid adoption of technological innovations driven by the relative scarcity of farm labor changed agriculture and led to the development of input agri- businesses. ' Newly invented manufactured inputs slowly replaced human and animal muscle to make individual farmers more productive. The input supply industries evolved to produce these purchased inputs. Now, farmers purchase nearly all inputs off-farm.

Michael Wooluerton, Managing Editor of Agribusiness, is Agribusiness Coordinator in the Division of Agriculture at Arizona State University, Tempe, Arizona.

Gail Cramer, Editor of Agribusiness, is Professor ofAgricultura1 Economics at Montana State University, Bozeman, Montana.

Timothy Hammonrls, Editor of Agribusiness, is Senior Vice President for Research and Education, Food Marketing Institute, Washington, DC.

Agribusiness, Vol. 1, No. 1, 1-3 (1985) 0 1985 by John Wiley & Sons, Inc. CCC 0742-@77/85/0 1000 1 -03$04.00

2 WOOLVERTON, CRAMER, A N D HAMhlONDS

The evolution of the commodity processing, food manufacturing, and food distribution industries paralleled that of the input supply industries. Motivated at first by the need to preserve food, entrepreneurs in these industries learned to fulfill consumer desires for quality, variety, and convenience. Even farm families, by and large, have turned to purchased food and fiber products rather than process their own.

Agribusiness is a basic and important part of our economic system. Besides providing essential food and clothing, agribusiness in the United States contrib- utes about 20% to the CNP and employs approximately 23% of the labor force. In 1980 the input supply industries employed about 7.6 million people; 3.3 people were engaged in agricultural production; and the commodity processing, food manufacturing, and distribution sector employed slightly more than 12.7 million people.'

Agribusiness is an important segment of nearly every country's economy. As countries develop, the input supply industries and commodity processing, food manufacturing, and distribution firms tend to evolve and grow while the pro- duction sector shrinks in terms of number of people e m p l ~ y e d . ~ The role of agribusiness in economic development is a vital one and needs to be examined more closely.

The first agribusiness academic program was established at the Harvard Busi- ness School in 1956. There are now about 60 agribusiness programs in the United States and similar programs in many other countries. Most of the programs in the United States are offered by agricultural economics departments in land grant institutions, but some nonland grant schools have agribusiness programs as do a few graduate schools of business administration."

As an emerging academic discipline, agribusiness is most closely related to agricultural economics. The relationship is analogous with that of economics to business administration or physics to engineering, with one field serving as the theoretical base and the second being the practical application of theory.

Davis and Coldberg introduced us to the term agribusiness in a 1957 book entitled A Concept of Agribusiness. They defined agribusiness as the " . . . sum total of all operations involved in the manufacture and distribution of farm supplies; production operations on the farm; and the storage, processing, and distribution of farm commodities and items made from them."'

It is this definition of agribusiness that forms the basis for the editorial thrust of Agribusiness: An International Journal. Agribusiness will provide a forum for the world-wide community of researchers and practitioners in industry, academia, and government involved in all areas of agribusiness including agricultural in- puts, agricultural production, commodity processing, food manufacturing, and food distribution.

Major goals of the editorial team are to make Agribusiness relevant and read- able. Papers will be considered that deal with farm inputs, agricultural produc- tion, natural resources, agricultural marketing, agricultural finance, agricultural policy, international agricultural trade, food oriented consumer behavior, eco- nomic development, rural development, and other areas related to agribusiness. Manuscripts should report, in a rigorous manner without being unnecessarily quantitative, practical, applied work that is directly useful to farm managers, agribusiness firm managers, analysts, government policy makers, and academic professionals. Authors will be asked to minimize mathematical notation in ar-

AGRIBUSINESS 3

tides. I f essential to the development of a topic, extensive mathematics will appear in an appendix.

The business and mechanical aspects of publishing Agribusiness will be per- formed by the Professional Journals Division of John Wiley & Sons, Inc., a well respected publisher. ‘The editorial tasks of soliciting manuscripts, sending them out for review, and making final preparations for publication will be handled by the editorial team. An editorial advisory board chaired by Professor Ray A. Goldberg and made up of highly qualified individuals from industry, government, and academia from around the world will counsel the editorial team. Many others will become involved with the functioning of Agribusiness as contributing authors and reviewers. The readers will be the major beneficiaries as they use the information contained in articles to help them in their agribusiness careers.

The editors have been encouraged by the response to the launching of this new journal. There is widespread interest in a medium for the formal exposition of ideas relating to agribusiness. ilgrihusiness: An International Journal will fill this void. It will serve as a world-wide communications link to those interested in this dynamic subject matter.

REFERENCES

1. w. D. Rasmussen, “The Mechdnization of i\gricuiture,” Scirnfific .hnericun. 247(3), 76-83 (1982).

2. W. ,4nderson, “Marketplace: Trends i n .igribusinrss,” k’redslufls, March 22, 8( 1982). 3 . 11.1. W. Woolverton, “Agribusiness in Latin America: The Role of U. S. Multinationals,” in

Change und Perspective in Latin Americu: Proceedings of the 1982 Meeting of the Rocky Mountain Council on Latin American Studies. C. Richard Bath, Ed., Center for Inter-American and Border Studies, El Paso, TX, 1982, p. 113.

4. C. E. French, J. Niles, and R. Westgren, “Agribusiness Management: Classroom Education,” Unpublished paper presented at the Western Agricultural Economics Association Meeting in Sari Diego, CA, Ju ly 10, 1984.

5. J. H. Davis and R. A. Goldberg, A Concept of Agribusiness, Division of‘ Research, Graduate School of Business Administration, Harvard University, Boston, MA, 1957, p. 1 .