Unit I

Overview of Agribusiness

Introduction
According to Primo Garcia, “No industry could be more important to human survival than
agribusiness”. Undeniably, the emergence of the agribusiness industry brought much utility in the
survival of the human race. Agribusiness facilitate in adding value to the agricultural products to
make it useful for human consumption and as input in other industry. The role of agribusiness goes
beyond satisfaction of daily household needs and it expands to the development of the rural
community and brings progress to the nation as a whole.
Objectives
At the end of the unit/session, students must have:
1. defined and explained agribusiness;
2. traced the history of agribusiness;
3. enumerated the nature, scope and agribusiness;
4. elaborate the concept of agribusiness as a sector, as a system and as a field of study;
5. appreciated the importance of agribusiness;
6. listed the careers in agribusiness;
7. drawn a model of the agribusiness system.

Agribusiness Defined
Early Definition
The term “agribusiness” was first coined by Dr. John H. Davis in a speech during the
Boston Conference on Distribution titled “ Business Responsibility and the Market Farm Products”
at Harvard University on October 17, 1955. He defined agribusiness as “the sum total of all
operations involved in the production, and distribution of food and fiber”.
In 1957, Dr. John H. Davis together with Dr. Ray Goldberg enhanced the definition of
agribusiness. They expanded the scope of agribusiness and defined as:
“Agribusiness- 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” (Davis & Goldberg, 1957).
So, these early definitions were based on farm production and distribution. This is no
surprise since Davis headed the National Council of Farmer Cooperatives 1944-1952 before
joining Goldberg (who grew up on a farm) at the Harvard School of Business Administration to
teach business concepts applied to farm operations (Fusonie, 1995).
Recent Definitions
As time goes by, changes in the agriculture and related business endeavors were prevalent.
This leads to the evolution of the definition of the term Agribusiness. As cited by Van Fleet (2016),
the following are some of the definition of Agribusiness by different authors:
Table 1. Various Definitions of Agribusiness
Author Definition
Downey& Erickson (1987) “all those business
and management activities performed by firms
that provide inputs to the farm sector, produce
farm products, and/or process, transport,
finance, handle or market farm products”
Ricketts & Ricketts (2009) “Agribusiness include the manufacture
and distribution of farm supplies to the
production agriculturist and the storage,
processing,
marketing, transporting, and distributing of
agricultural materials and consumer products
that
were produced by production agriculturalists”
Ng & Siebert (2009); Agribusiness is beyond the farm. More than
Detre et al. (2011) food and fiber would be encompassed.
Edwards & Schultz (2005) “Agribusiness is a dynamic and systemic
endeavor that
serves consumers globally and locally through
innovation and management of multiple value
chains that deliver valued goods and services
derived from the sustainable orchestration of
food,
fiber, and natural resources.”
Encyclopedia Britannica Inc. (2011) Agriculture operated by business; specifically
a part of a modern economy devoted to the
production, processing, and distribution of
food, fiber products and by-products including
the financial institutions that fund these
activities.

If synthesized, agribusiness is comprised of all organizations in various size (micro, small,

medium or large)that engage in the production, distribution, marketing , or utilization of food,
fiber, forest products, or biofuel, including those that supply water to and collect waste from those
organizations. Thus, agribusiness simply pertains to the application of theories and practices of
business administration to organizations engaged in agriculture and agriculturally related products
and services (Van Fleet, 2016).
Distinctive Features of Agribusiness
1. Agribusiness deals with vagaries of Nature.

Drought, typhoon, flood, insect attack, pest infestation are common threat to most
agribusinesses. Everyone is concerned with the weather and environmental conditions.
Weather in the Philippines is tropical and maritime. It is characterized by relatively high
temperature, high humidity and abundant rainfall. Based on the average of all weather
stations in the Philippines, excluding Baguio, the mean annual temperature is 26.6 degrees
C. Due to high temperature and the surrounding bodies of water, the Philippines has a high
relative humidity. The average monthly relative humidty varies between 71 percent in
March and 85 percent in September. Rainfall distribution throughout the country varies
from one region to another, depending upon the direction of the moisture-bearing winds
and the location of the mountain systems. The mean annual rainfall of the Philippines varies
from 965 to 4,064 millimeters annually. Baguio City, eastern Samar, and eastern Surigao
receive the greatest amount of rainfall while the southern portion of Cotabato receives the
least amount of rain. At General Santos City in Cotabato, the average annual rainfall is
only 978 millimeters (Department of Science and Technology, 2019).

Agricultural production is highly dependent to weather conditions. Both crops and

animals are directly affected by adverse weather situations which increase the risks in
production. In 2011, only 9.40% of the total agricultural land are irrigated where a large
percentage of farms rely on rainfall. Key crops like rice are highly dependent on stable
water supply. According to the Philippine Bureau of Agricultural Research (BAR) 80% of
cultivated land in the country depends on rain to water its crops (Ranada, 2015).

2. Small Farm Size

Among the total land area in the Philippines, 32% of it is utilized for agricultural
production. Of this, 51% were arable and 44% were permanent croplands (Department of
Labor and Employment, 2012). In 2012, the Census of Agriculture (CA) reported 5.56 farm
holdings which covers 7.19 million hectares. This means that an average farm area is 1.29
hectares/ farm holding. A dramatic decrease in the average farm size was observed in the
recent census compared to the 2.84 hectares average farm holding in 1980. Across regions,
Region VI – Western Visayas reported the highest number of farms/holdings, 518 thousand
farms/holdings with a total area of 460.45 thousand hectares. Region V - Bicol followed
next with 486 thousand farms/holdings operated in 765.82 thousand hectares. Region II
ranked third with 443 thousand farms/holdings measuring about 478.72 thousand hectares.
NCR had the least number of farms/holdings (39 thousand) with an area of 20.27 thousand
hectares (Philippine Statistics Authority, 2015).
Table 2. Number and Area of Farms/Holdings and Average Area per Farm/Holding, by
Region: 2012
Region Number of Area of Farm/Holdings Average Area per
Farm/Holdings (in Hectares) Farm/Holding
Philippines 5,562,577 7,190,087.109 1.293
NCR 38,580 20,271.328 0.525
CAR 167,510 137,638.422 0.822
Region I- Ilocos 313,398 218,652.942 0.698
Region II- Cagayan Valley 443,196 478,720.965 1.080
Region III- Central Luzon 361,335 440,901.956 1.220
Region IVA- CALABARZON 341,832 497,500.864 1.455
Region IVB- MIMAROPA 277,739 445,587.947 1.604
Region V- Bicol 486,227 765,824.085 1.575
Region VI- Western Visayan 517,725 460,456.040 0.889
Region VII- Central Visayas 427,464 292,571.400 0.684
Region VIII- Eastern Visayas 412,836 453,606.874 1.099
Region IX- Zamboanga 212,711 448,181.293 2.107
Peninsula
Region X- Northern Mindanao 371,903 532,889.367 1.433
Region XI- Davao 338,324 571,236.451 1.688
Region XII- SOCCSKSARGEN 385,634 618,117.170 1.603
Region XIII- CARAGA 183,471 461,405.185 2.515
ARMM 282,692 246,524.821 1.226
Source: PSA, Census of Agriculture and Fisheries 2012

The top four regions with more than 500 thousand hectares consisted of Region V
– Bicol (765.82 thousand hectares), Region XII - SOCCSKSARGEN (618.12 thousand
hectares), Region XI - Davao (571.24 thousand hectares) and Region X – Northern
Mindanao (532.89 thousand hectares).
In terms of average area per farm/holding, six regions reported to have more than
1.5 hectare per farm/holding. These were Region XIII – CARAGA (2.515
has./farm/holding), Region IX – Zamboanga Peninsula (2.107 has./farm/holding), Region
XI – Davao (1.688 has./farm/holding), Region IVB – MIMAROPA (1.604
has./farm/holding), Region XII – SOCCSKSARGEN (1.603 has./farm/holding) and
Region 5 – Bicol (1.575 has./farm/holding).
Table 3. Number and Area of Farm/Holdings and Average Area per Farm/Holding, by
Size of Farm/Holding: 2012
Size of Farm Number % Area Average Area
Total 5,562,577 100.00 7,190,087.109 1.29
Under 0.5 ha. 2,159,963 38.83 277,780.819 0.13
0.500 ha. to 0.999 ha. 1,004,633 18.06 609,084.068 0.61
1.000 ha. to 2.999 ha. 1,780,702 32.01 2,594,814.772 1.46
3.000 ha. to 7.000 ha. 518,046 9.31 2,112,231.941 4.08
7.001 ha. to 9.999 ha. 44,102 0.79 363,201.962 8.24
10.000 ha. to 24.999 ha. 49,657 0.89 655,133.751 13.19
25.000 ha. to 49.999 ha. 3,877 0.07 125,214.209 32.30
50.000 ha. and over 1,597 0.03 452,625.587 283.42
Source: PSA, Census of Agriculture and Fisheries 2012

In terms of the distribution of the average area per farm/holding, it can be observed that
the highest percentage is on individuals who have farms less than or equal to half a hectare.
3. Price Fluctuations

Agricultural products are characterized to be seasonal in terms of supply yet the

demand for these products are more or less constant. Ex. Mango, tomato, rice, corn. This
economic set-up results to lower prices during high overall production and high prices
during lower production. This has always been a challenge among players in the
agribusiness industry in making decisions on when or where to sell or buy. Large
fluctuations in prices in rare to happen in other industries.

As an example, the Philippine Statistic Authority mentioned that the retail price of
well-milled rice rose by about 10% just within a year. While a regular-milled rice has 13%
increase in retail price within a year. Imports has still very minimal effect on lowering the
prices. NFA rice serves as market stabilizers, minimizing the jacking up of prices in
commercial rice. The average daily consumption of Filipinos of 32,000 MT.The problem
is on traders, middlemen, speculators who are riding on the tax reform issue to justify their
market and price manipulation. As a result, as farm gate prices have dropped, there was no
change in the retail prices of commodities in the market. This development confirmed what
the stakeholders of agriculture and fisheries have been saying all along- “the increase in
the prices of food commodities happens in the market and does not benefit the farmers and
fishermen.” According to PSA, the increase in farm gate prices of food items was only one
percent while increase in the prices of food in the market was over 5%. The DA has
implemented counter-inflationary measures to help ease prices of commodities, including
the lifting of special safeguard mechanisms that sets a trigger price of 93.96/kg for poultry
which means that imported chicken brought in at 7-0/kg will be charged with an additional
tariff of 23.96 to place the price at par at 93.96 (Simeon, 2018).
4. Bulkiness

It is another characteristic of agricultural products. Basically, handling and storage

has been a challenge among players especially upon seeking for means of transportation
and in looking for a large storage facility. This also results to increase in costs for logistics.

5. Wide Variety of Agribusinesses. Agribusiness covers the input suppliers, farmer-

producers, processors-manufacturer-distributors, and retailers

Different kinds of businesses are built around this sector. For input suppliers,
breeders, greenhouse operators, fertilizer producers, feeds producers, and pesticide
manufacturers are some of its example establishments. Farmer-producers include
establishments which are usually farms which are directly operating and managing day to
day operations that produce all sorts of raw commodities for processing and consumption.
Processors-manufacturer-distributors establishments are those which process produce from
the farm. This can range from backyard enterprises to big manufacturing firms. Retailing
establishments vary greatly from sellers in the public market stalls to big grocery stores in
malls. Cooperative is another form of agribusiness establishment. A cooperative formed
by farmers where they pool their resources together to cater the needs of every farmer-
member (Department of Labor and Employment, 2012).

6. Inclusive to all Business Size

In terms of size, agribusinesses ranges from micro-enterprises to large and

multinational companies. In the Philippines, 89.3% of all the enterprises are classified as
micro-enterprises (PSA, 2015).

7. Agribusiness Firms tend to be Family-oriented

Family involvement and family labor is common in the Philippines considering the
average size of land holdings in the country. Ninety-nine percent (or 5.51 million) of the
farms/holdings in the country were operated by the households or by individual person.
Other farms/holdings were operated by partnership (0.8%), corporation (0.04%),
cooperative, government institution, private institution, etc. (Philippine Statistics
Authority, 2015).

In other countries, even most of agribusiness ventures begin as family business, the
advancement in technology brought some changes to such situation. There are already
some lone individuals who started their companies without the involvement of their family.
This is common to application-oriented companies (Van Fleet, Van Fleet, & Seperich,
Agribusiness: Principles of Management, 2014).
8. Some of Agribusinesses are Seasonal in Nature

The seasonality of agricultural products affects the operations even the large and
multinational companies. There is an intimate relationship and interdependence between
farm producers and agribusinesses. Due to the planting and harvesting season, some
challenges arise in terms of the balance between demand and supply and so with the prices
of the agribusiness products.

9. Agribusinesses are directly affected by Government Programs and Policies.

Agribusiness products are commonly subjected to government policies and

programs. These policies and programs include product tariffication, price control,
infrastructural development, agricultural modernization, and the like.

10. Low elasticity of demand and supply

Farmers do not have full control over their production to the same degree as in other
industries. The nature of production is also such that the gestation period is too long.
Therefore, it is not possible for farmers to adjust their production immediately according
to the market signals. Even in case of demand also it is true. Most of the agricultural
commodities come under necessary goods. Therefore, consumers will not reduce or
increase their consumption significantly in response to the sale prices of agricultural
commodities.

Scope of Agribusiness
The dynamism of the activities in agribusiness makes it difficult to put borders on the
width of the coverage of such industry. Based on early definitions, agricultural production and
management serves as the core of agribusiness. It covers the activities in the agricultural sector,
some portions agro-processing sector and portions of service sectors. Hence, the nature of work
in agribusiness has a very wide scope from input production, farm operations and management,
food/non-food processing, equipment and supplies manufacturing, trading, and retailing
(Department of Labor and Employment, 2012). Specifically, a more detailed scope of
agribusiness includes the following:

✓ Our daily requirements of food and fiber products at desired place at required form and
time come from efficient and hardworking of many business personnel in input, farm and
food production and also in marketing them. The entire system in brief is called
Agribusiness.
✓ Agribusiness, of late, is combining the diverse commercial enterprises, using
heterogeneous combination of labor, materials, capital and technology.
✓ It is a dynamic sector and continuously meets current demands of consumers in domestic
and world markets.

✓ Agri-business establishment leads to strengthening of infrastructural facilities in that area,

expansion of credit, raw materials supply agencies, adoption of modern technology in
production and marketing of agricultural products.

✓ Agri-business provides crucial forward and backward linkages.

✓ Agri-business generates potential employment opportunities.
✓ It adds value to products and thereby increases the net profits.

3 Ways in Perceiving Agribusiness

1. Agribusiness as a Sector
Agribusiness includes the whole of agriculture or the farm sector and other related off-farm
and non-farm entities.
These sectors operate under one big system known as the agribusiness system. From the
system’s environment’s viewpoint, all of the above sectors must be viable to make the whole
system viable. To ensure viability of the different subsystems, all of the sectors are coordinated
by different governing bodies, which are either government or non-government institutions. These
are under one agribusiness subsystem known as the support subsystem.
The other way of presenting agribusiness structure is by grouping the five major
components into just three major categories namely: agricultural production, agro-industries
and services.
In a more detailed sense, agribusiness covers the following:
1. Agriculture
2. Fishery
3. Forestry
4. Manufacturing/Agro industries
a. Food manufactures
b. Beverage industries
c. Tobacco manufactures
d. Textile manufactures
e. Wood and cork products
f. Furniture and fixtures
g. Paper and paper products
h. Leather and leather products
i. Rubber products
5. Agro-services
6. Genetic Industries

These industries include breeding of plants, seeds, cattle breeding farm, fish hatcheries, and poultry
farms. Of course, factors like nature, climate and environment play a dominant role in these
industries, yet human skill involved in their production cannot be ignored. For example, intensive
agriculture is possible with greater amount of capital and larger number of workers.
2. Agribusiness as a System
a. The Input Subsystem. It consist of all entities and industries manufacturing and
providing farm and agro-industrial inputs. These include fertilizer industry, pesticide
industry, feed milling, seed and other agro-chemical industries.

b. The Farm or the Production Subsystem. It consist of the producers of raw agricultural
products. This includes crop and livestock producers and fishermen.

c. The Processing Subsystem. Otherwise known as agro-industries, these consist of all

entities which use agricultural raw materials as base. These include food processing
and non-food processing such as fiber, leather and bio-fuel processing.

d. The Marketing Subsystem. This sector includes all those individuals and entities which
trade inputs, raw materials and finished products. This sector services and connects all
of the abovementioned sectors.

e. The Support Subsystem. It encompasses all government and non-government agency,

research institutions, industry associations, financing institutions, international
organizations and other entities that directly or indirectly affect the agribusiness system
through the provision of necessary logistics, coordination, financing and human
resources, technology, information, policies, programs, incentives, and other services
to the system.
Input
Subsystem

Production
Subsystem Coordination
Financing
Manpower
Technology
Processing Information
Subsystem Infrastructure
Policies/Programs
Other Services
(Support Subsystem- govt. agencies, private institutions,
Marketing industry associations, financing institution and research
Subsystem institiutions)

Consumers

Figure 1. The Agribusiness System

3. Agribusiness as a Field of Study

As a field of study, agribusiness is founded on management. It is an integrative field of
study that draws concepts from different disciplines like economics, psychology, sociology,
statistics, mathematics, political science, and engineering. It also integrates the relevant aspects of
agricultural disciplines such as horticulture, agronomy, animal science, crop protection, soil
science, aquaculture and forest science.

Nature of Successful Agribusiness

Agribusiness in this century has become complex and competitive which was driven by
the changes in the taste and preferences of the consumer together with the introduction and
availability of cheaper yet competitive goods. As cited by Jaipur National University (2014), the
following are some of the requisites for successful agribusiness ventures:
The old dictum, “produce and sells has changed overtime into “produce only what customers
want.” In fact, knowing what customers want is never simple. Nevertheless, a farmer
operator/farmer manager has to give proper thought to this consideration in order to make his
business a successful one.
1. Planning. It is the process of the determination of the goals of the business and making
decisions on how to achieve them (Van Fleet, Van Fleet, & Seperich, Agribusiness:
Principles of Management, 2014). In setting the objectives of the business, it must be
clearly identified. Objectives serve as the destination points of the business. Thus,
objectives must be SMART to be able to concentrate the efforts of the business in attaining
its clear targets (Jaipur National University, 2014).

2. Sound Organization. Agribusiness requires a harmonious and well-orchestrated

combination of the 5Ms in management (men, money, materials, machines and methods).

3. Investment on Research. Agribusiness philosophy is “produce what consumer wants”.

Consumer behaviour is affected by variety of factors like cultural, economic, personal,
psychological, etc. The business needs to know and appreciate these factors and then
function accordingly. The knowledge of these factors is acquired through market research.
Research is a systematic search for new knowledge. Market research enables a business in
finding out new methods of production, improving the quality of product and developing
new products as per the changing tastes and wants of the consumers.

4. Financial Access and Management. As cited by Paramasivan & Subramanian (2016),

finance is hailed to be the lifeblood of any business. It is required to fuel the day to day
activities of the business (Colipano, 2019).

5. Proper Plant Location, Layout and Size. The accessibility of the location of the business
both for source of inputs and target market will result to decrease costs and opportunity to
increase income.

6. Effective and Efficient Management. Poor management is one of the most common reason
for business failure. Proper management of the resources in lieu with the pursuance of
business objectives will contribute to business success.

7. Harmonious Human Relations. Good relations among members of the organization will
lead to full cooperation towards the attainment of business objectives. It also lead to better
utilization of non-human resources.
Learning Activity 1.1
Understanding Agribusiness

Instruction: Answer the following questions briefly in a short bond paper.

1. Based on the facts discussed, create your description and discussion of the agribusiness
concepts.
2. Create a model/illustration that describes your interpretation on the interdependence of the
various subsectors in the whole agribusiness system. Discuss your model.
3. In your locality (municipality/city), observe and identify 3 successful agribusiness
enterprise. Describe the nature of operation of each enterprise. Then, analyze and discuss the
factors that made them successful.
4. Observe and describe the agribusiness sector in your own province. Discuss how each
agribusiness sector interact with each other
5. Based on number 4, what are the challenges that you observed in the agribusiness sector?
What can you suggest addressing such challenges?

Scoring Rubrics
Criteria Very Good Good Fair Failed
(3 points) (2 points) (1 point) (0 point)
Content Shows originality The ideas There is not No answer at all.
of the idea. The expressed are enough
idea addressed already common. substantial idea
the question being The idea slightly expressed.
asked. answers the
question being
asked.
Relevance The ideas are The ideas are The ideas are No answer at all.
highly realistic and somewhat not so realistic.
based on current realistic. Arguments have
situations. Arguments have been
Arguments have enough basis. questionable.
valid basis.
Organization Appropriate words Acceptable words Not appropriate No answer at all.
are use. There is are used. There is words are used.
coherence in the average The construction
organization of coherence in the of ideas is not
ideas. organization of clear and
ideas. organized
History of Agriculture
Agriculture is the core of agribusiness. Mckenzie (2007) traced a brief history of
agriculture and food production from earlier days up to green revolution.
In Genesis 4 (Holy Bible – Old Testament), agriculture started with the very first family
activities; Adam and Eve with their sons, Cain and Abel worked to cultivate the soil. Cain produce
for the production of crops while Abel for the raising of livestock particularly sheep.
As such, agriculture was focus on the caring of natural resources and dealt mostly on the
gathering of food and appropriate handling. Thus, early inhabitants were mostly working in
hunting and gathering activities.
Since agriculture is basically farming, this developed further and it gave people to develop
other things like language, art, and religion.
Life before Agriculture
• People roam around great distances to gather plants and hunt animals for food
• Nutrition and health were not the prime concern of people; people seldom live past twenty-
five years of age
• Hunting was considered a game
• Gathering of vegetables and insects was the main activity of people. Insects were the best
food before by early humans
• The best of all discoveries were noted when people learned to fish and use fire for cooking

Bronze Age (around 3,000 B.C.)

• Wooden implants were made sharper and more durable by using metal
• People started to cultivate larger areas of land faster; spread of agriculture became a way
of life
• Bronze tools and plows made for easier and faster farming
• The Nile river was used by Egyptians to irrigate crops
• The wheel was discovered making the transport of crops possible
• World population rose from 3 million before the invention of agriculture to nearly 100
million

Iron Age (1000 BC)

• Use of iron to produce more

• Iron tools and plows were prepared some of which are similar to those used today
• Money was developed because of the need to trade excess crops
• The introduction of fallow practice was recognized; fallow is to make the soil idle after
the first operation
Middle Ages (AD 400-1000)
• Farming was still considered a way of life with few develops; crop rotation and selective
breeding
• Farmers started to understand the importance of conserving soil moisture and nutrients
• Farming delineation started
• Use of draft animals
• Breeding activities of animals

11th Century
• Draft horse and plow came into use, greatly increasing farmers’ ability to cultivate larger
fields
• Farmers learned how to maintain soil fertility, but cereal yields reached a plateau
• Increased concentration and larger amounts of land under cultivation. Food surpluses
enabled peasants to more easily move to cities

1800s
• Period of profound change
• 1825—world population reaches one billion people
• Crop yields sufficient to provide exports
• Mechanized farm equipment, expansion of farm size, and the decline in the number of
farms
• Agricultural science gained prominence; enough food to “feed the world”
• Per capita calorie consumption increased, consumption of animal proteins increased, and
cereal consumption decreased

1900s

• Land available for cropping became a limiting factor

• Increased crop yields prioritized
• Nitrogen fertilizers
• First use of pesticides in the early 1900s
• Traction power contributed to the expansion of farm size and decline in farm numbers

Industrial Agriculture

• 1960—world population reached 3 billion

• Chemical inputs for agriculture greatly increased
• Mechanized methods of farming and food production became the norm
• Animal agriculture industry begins raising large numbers of animals confined in crowded
indoor facilities
Green Revolution

• Planned international effort to eliminate hunger by improving crop performance

• Increase yields—new crops, irrigation, fertilizers, pesticides, mechanization
• Increasing technological knowledge
• Supplying materials to farmers

Past Development of Agribusiness in the Philippines

The agribusiness concept is market-oriented. Components must lead to satisfy consumer’s
needs. It is important that there should be constant communication between and among key players
in order to inform what is happening to the system. Interactions and movements play important
parts in the system because it provides direction and the willingness of people to be involved in
and people are engaged in social exchanges and relationships are established (Collado, 1977).
This implies that what the agribusiness participants do at the input to trading ends depends
largely on what the user/consumer end requires. In relation to the market-oriented nature of
agribusiness Dr. Geronimo Collado (1977) traced the past development of agribusiness and
categorized these into three distinct phases:

1. Phase 1. Self- oriented Agricultural Sector. This started from time immemorial up
to the early 1990s. The Filipinos’ way of life then was hunting, fishing and gathering
of fresh products. This phase was characterized by :

• General self-sufficiency of producers

• One household commodity system
• Minimal / negligible market transaction

2. Phase 2. Structural Dualism. The entry of the colonizers into the country changed
Philippine agriculture. This phase marked the transfer of technology, marketing,
financial and management expertise from the colonizers to the Filipino farmers which
encouraged these farmers to engage in plantation crops. With these changes, Philippine
agriculture became dualistic in structure/nature. By dualism, it means that there
are two major farming sub-sectors: 1) the traditional farming subsector which
produces rice, corn, and other subsistence crops and 2) the modern agribusiness –
oriented plantations which produces industrial crops for processing and marketing
(local and export).

3. Phase III. Market Oriented Food and Fiber System. With the increasing number of
technological packages in the country and the genetic breakthrough in rice, wheat and
corn, farmers produced more than what they can traditionally consume. Many
subsistence producers became market-oriented and with this, increasingly complex
linkages and interdependence among the various components of the agribusiness
system were developed.

Importance of Agribusiness
➢ It deals with agricultural sector and also with the portion of industrial sector, which is the
major source of farm inputs like fertilizers, pesticides, machines, processing and post-
harvest technologies.

➢ Agribusiness is the food provider of the economy. Food and non-alcoholic beverages
accounts for about 38.7% of the total household expenditure in a Filipino family on the 1 st
quarter of 2019 (Philippine Statistics Authority, 2019).

➢ It provides non-food products which are essential in human survival.

➢ Increase the value of agricultural and agro industrial production for both the local and
export market.

➢ It provides raw materials to agro industries and manufacturing.

➢ It generates employment for individuals in the community. In 2012, around 12 million

Filipinos or 33% of the country’s labor force are employed in agriculture although it
decreases to 25.44% in 2017. Of the 42.78 million persons in the labor force in 2017, about
40.33 million persons or 94.27 percent were employed. The agriculture sector absorbed
10.26 million persons, representing 25.44 percent of the national employment. The current
wage rate in agriculture is Php 276.03/day (Philippine Statistics Authority, 2019).

➢ It contributes a good part of the national economy. The agriculture, hunting, forestry and
fishing sector contribute for about 8.9% to the country’s GDP in the last quarter of 2018
and 8% on the 1st quarter of 2019 (Department of Trade and Industry, 2019).

➢ It serves as a platform among individuals to enhance their entrepreneurial potential.

Careers in Agribusiness
Agribusiness industry has tremendous potential for growth and development. Individuals
in this field of endeavour can go along a wide vast of opportunities across different path. Careers
in agribusiness can range from a small business owner/manager to a large multinational company
administrator. The following are some of the possible career that can be taken in the field of
agribusiness:
Table 4. Common Careers in Agribusiness
Agribusiness Bank Teller Operations Campaign Sales Entrepreneur
Managers Supervisor Executive
Food Firm Financial Quality Marketing Commercial
Managers Advisor Assurance Personnel/Manager farmers/Growers
Manager/Officer
Business Loan Officer Merchandiser Sales Agriculturist
Development Representative
Officer
Management Financial Warehouse Merchandiser Farm owner/
Trainee Analyst Operator manager
Teacher Bookkeeper Human Data Analyst Researcher/
Resource Research
Personnel Assistant
Extension Administrative Public relations Training Officer Freelance
Agent Assistant/Officer Officer Business
Consultant

Agribusiness management as a general field, it encompasses a wide array of options and

opportunities. It requires agribusiness people to work hard in order to learn the different crafts in
the different fields to be able to be flexible in different trade. Thus, the more knowledge and skills
that are learned, the more opportunities are being made available.

Entrepreneurship in Agribusiness
Entrepreneurs are the key drivers in agribusiness. They are the owners of micro, small, and
medium enterprises which significantly contribute to the value adding to the agricultural products
and creates employment opportunities for individuals in the in the community. It then often results
to upliftment of the quality of life in the locality (Food and Agriculture Organization of the United
Nations, 2017).
The concept of entrepreneurship may be defined in various ways. There is no universal
definition entrepreneurship. The Schumpeterian definition of entrepreneurship regards with the
“creative destruction” by offering new products/services, new methodologies in
production/operation, opening new market, organizing new forms of organization or discovering
new materials.
Entrepreneurs are commonly known for their phrases like “be your own boss” and “create
jobs rather than find jobs”. The Merriam Webster Dictionary defines an entrepreneur as “one who
organizes, manages, and assumes the risk of a business or enterprise”. This means that an
entrepreneur is characterized to be (1) innovative; (2) creative; (3) leader; (4) risk taker; and (5)
passionate.
Risks associated with Entrepreneurship
• Entrepreneurs work for themselves, are independent, and make their own business
decisions
• Whatever income they earn above their financial obligations is theirs to keep
• They can test their own theories and ideas on how to run their business
• They set their own working business
• They themselves set prices, determine production levels, and control inventory according
to the market
• They determine the product or service offered and control its quality as well as the overall
reputation of the business
• They solve the problems
• They perform all the human resource functions such as hiring, training, and firing
• They set the company policy

Personal Characteristics of Entrepreneurs

Every person is different and unique. However, there are qualities that are common to
entrepreneurs that set them apart. The skills needed by entrepreneurs vary widely, depending on
the type and nature of the business.
Some characteristics common to entrepreneurs
• Independent. Entrepreneurs believe that they can do the job better than anyone. They prefer
to control their own destiny
• Self-confident. People who believe in themselves and what they can do have a definite in
self-employment
• Energetic. Entrepreneurs usually are sick less often than other people. They enjoy good
health and use it to improve their business
• Organized. These people are able to organize their work according to their own unique
system
• Vision. Entrepreneurs can keep tabs on the whole business and see how the different parts
of the business fit together. They are in command of the entire business operation
• Persistent. They are able to keep their business moving forward even when tough times are
prevailing. If they do encounter a roadblock, they will find another way.
• Optimism. No matter what the situation, the outlook is always good for the entrepreneur.
Such people are natural optimists.
• Committed. They accomplish what is necessary to carry out their ideas
• Problem-Solver. Entrepreneurs willingly take on new challenges. They capitalize on
opportunities to make use of their time, talents, and ideas
• Self-nurturing. They have little concern for what others think about them. Entrepreneurs
have a conviction that they are on the right track regardless of what others may think.
• Risk takers. They are willing to give up things like a steady job in order to achive their
personal and business goals. They are not gamblers; rather, they take risks based on the
confidence in their own abilities.
• Action oriented. Great business ideas are not enough. The most important thing is a burning
desire to turn dreams into reality
• A sense of urgency. Entrepreneurs are restless unless they are working, and they may often
seem to want challenges if everything is going too smoothly
• Flexibility. If one option falls through, they find another way to do the job or finance the
change.
• Emotionally stable. Entrepreneurs are not given emotional highs and lows as their moods
change.

Learning Activity 1.2

Agribusiness Origin and Entrepreneurship

Instruction: Answer the following questions briefly in a short bond paper.

1. What do you think is the most important lesson that can be learned in the history of
agriculture and how it can help in the improvement of the current agricultural situation in the
Philippines?
2. In your personal life experience, how do you appreciate (if there is any) agribusiness?
3. Create a 15 years’ timeline for your career. Discuss.
4. Identify a successful entrepreneur in the Philippines and discuss his/her story. Identify the
qualities of that entrepreneur that you think you also possess.
5. Do you see yourself as a future entrepreneur? Why or why not?
Scoring Rubrics
Criteria Very Good Good Fair Failed
(3 points) (2 points) (1 point) (0 point)
Content Shows originality The ideas There is not No answer at all.
of the idea. The expressed are enough
idea addressed already common. substantial idea
the question being The idea slightly expressed.
asked. answers the
question being
asked.
Relevance The ideas are The ideas are The ideas are No answer at all.
highly realistic and somewhat not so realistic.
based on current realistic. Arguments have
situations. Arguments have been
Arguments have enough basis. questionable.
valid basis.
Organization Appropriate words Acceptable words Not appropriate No answer at all.
are use. There is are used. There is words are used.
coherence in the average The construction
organization of coherence in the of ideas is not
ideas. organization of clear and
ideas. organized

Unit Quiz (Quiz No. 1)

Instruction:
1. Write an essay about the general picture of Philippine agribusiness.
2. Make a reflection paper for the whole chapter by expressing what you learned, your
realizations and your suggestions to resolve the issues and challenges identified in the
subject matter. Do it by elaborating the following:
I learned….
I realized…
It would be better if….

Scoring Rubrics
Criteria Very Good Good Fair Failed
(3 points) (2 points) (1 point) (0 point)
Content Shows originality The ideas There is not No answer at all.
of the idea. The expressed are enough
idea addressed already common. substantial idea
the question being The idea slightly expressed.
asked. answers the
question being
asked.
Relevance The ideas are The ideas are The ideas are No answer at all.
highly realistic and somewhat not so realistic.
based on current realistic. Arguments have
situations. Arguments have been
Arguments have enough basis. questionable.
valid basis.
Organization Appropriate words Acceptable words Not appropriate No answer at all.
are use. There is are used. There is words are used.
coherence in the average The construction
organization of coherence in the of ideas is not
ideas. organization of clear and
ideas. organized

References

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Multinomial Logistic REgression Analysis.
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Atmospheric, Geophysical and Astronomical Services Administration:
http://bagong.pagasa.dost.gov
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Food and Agriculture Organization of the United Nations. (2017). FAO Develops Capacity on
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Statistics Authority: https://psa.gov.ph
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Ranada, P. (2015, June 24). DA to Farmers: Use Rainy Season to Fight El Nino. Rappler.
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