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Agribusiness Management

January 4, 2010

India is still largely an agrarian economy. A major chunk of its GDP comes from the agricultural sector. It accounted for nearly 17% of the GDP and employed 60% of the total workforce in 2007. Despite a steady decline of its share in the GDP, it is still the largest economic sector and plays a significant role in the overall socio-economic development of India.

This sector has not received its due share of attention in recent years. Thus India needs to look at strengthening what has been historically core to its economy and adopt a more pragmatic approach in this sector. This has also led to a glaring need for managerial skills in the agribusiness and rural sector.

 

So what is agribusiness management (ABM)?

The moment one says ‘agriculture’ we visualize a farmer plowing a field, planting seeds, harvesting crops, milking cows, or feeding livestock. Until recently, this was a fairly an accurate picture. But today’s agriculture is radically different. Agriculture has now evolved into agribusiness which is a vast and complex system that reaches far beyond the farmer to include all those who are involved in bringing food and fiber to us, the consumers.

 

Agribusiness not only includes those that contribute on the farmland but also people who provide inputs like seeds, fertilizers, monetary credit, etc, process output for eg. milk, grain, meat etc., manufacture food products like bread, cornflakes, flour and sell these food products to consumers, like those who run supermarkets, restaurants and even our local grocer. Thus agribusiness management is a complex study of the input sector, production sector, processing manufacturing sector and transport and marketing sector. It is directly related to industry, commence and trade, Industry being concerned with the production of commodities and materials while commerce and trade are concerned with their distribution.

 

The term ‘agribusiness management’ was coined by a Harvard professor and did not find its way into Indian B-schools till 1979. The Institute of Rural Management (Anand) or IRMA first conceived the idea of formal education in this space. It didn’t take long for other B-Schools like IIM-A, IIM-L, IIFM (Bhopal), XIM (Bhubaneshwar), etc. to catch up on this idea. This is a positive development, obviously, as it shows that trends and ideologies have undergone a change with more and more social entrepreneurial initiatives in this area emerging all over the nation. Companies are taking advantage of large untapped markets which is evident from the increasing number of initiatives being launched for the rural sector under the heading of corporate social responsibility. So we can infer that a need for such managers is slowly gathering.

 

 

Why Agribusiness Management?

Frankly and quite evidently, agribusiness is not fast in terms of growth and dynamism. However growth in terms of role or position is comparable to any sector. Another paramount attribute that people in this sector identify with is honesty.

Still not attractive, isn’t it? Heard of recession? Of course you have. It is the buzzword nowadays. India like any other country is dependent on USA (and other developed nations) for its trade. Hence India’s economy is also affected by recession. The service sector in India is facing some liquidity problems, industrial sector and financial sectors are in some trouble too. However agriculture has not been much impacted by the global economy crisis, except for some export oriented crops. Agriculture being an absolute necessity, producing the basic human needs of food and clothing, etc. an investment in agriculture is considered conservative and tangible with consistent returns. Agriculture is therefore the best solutions to maintain economic growth. Even in down markets agriculture companies performed well in 2008 and 2009.

 

We students are reluctant to take up opportunities in the agribusiness sector because the remuneration is not at par with the other sectors. But we must understand that there are cyclical trends in any industry. According to statistics covering the last 5 years, agriculture has been the most sustainable sector even in terms of payments. Retrenchment as well as salary cuts have been the least in this sector.

So in my opinion, we as students, should also consider options in this sector. After all, agriculture has been the one of the main occupations of our ancestors. It has been a means of livelihood for our previous generations for years. So how wrong can we go with it? In this industry one may have to start at the grassroots, like working at the shop floor or in case of marketing job, one may have to go from door to door to achieve sale targets, etc. There would be interactions with people who may not be well-educated or polished. However such experiences prove to be great learning grounds in the long-term. All one has to do is stay focussed and mature. But isn’t this the case with any other job?

 

Agribusiness is a very promising field, something we should all consider. Those who are genuinely interested and have a passion for it, must also consider enrolling in an ABM programmes that the country’s finest institutions offer. This education will give an opportunity to connect with the basic fabric of our economy.

 

Lucrative? May or may not be. Impactful and growth-oriented? Definitely.

 

References: Advanc’edge (magazine).

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11 Comments leave one →
  1. January 5, 2010 12:18 AM

    Has the invasion of agribusiness managers in multinational corporations the reason for price rise on agricultural products?
    My thought process goes like this. The big retailers currently aplenty in Indian market buys directly from farmers in huge quantity thereby creating a scarcity for the supply to local markets where these farmers used to supply early. Also the big retailers offers big money thus increasing the price of vegetables. As a result farmers sell the left over to local markets also at a higher price.
    The end result is that common man has to bear the brunt of all these huge money making steps of the business school graduates lead multinational retailers.

    I am not saying that these thoughts are true. Your posts on agribusiness management made me think about the rising prices of vegetables.

    • January 5, 2010 11:33 AM

      you dont need to be an agribusiness manager to induce price escalations by hoarding etc.
      i am just presenting an opportunity for students (like myself) another career direction.. economists are all preaching to rely on agriculture for the betterment of our economy.. something which a lot of us are unaware of. so why not find gold in something which is relatively an untapped industry in terms of specialised skilled workforce.
      you maybe true till some extent, i am not denying that. but this practice you mentioned, was prevelant even before the concept of agribusiness mgmt became popular..

  2. January 5, 2010 2:26 AM

    this is an interesting read, I didn’t know there was so much that had already been done about it…very very informative, now I have something to do 🙂
    thanks a bunch, cheers!

  3. January 5, 2010 9:10 AM

    What made you write about Agribusiness?

    • January 5, 2010 11:53 AM

      i hv given a couple of mba entrances this year and i have come across these programmes.
      somehow it never is our first choice inspite of even the IIMs offering it..
      so i thought i would write abt ABM so as to get a few ppl interested, including myself :D.

      so im going to ask you something back? y did u ask me this question?

      • January 5, 2010 12:31 PM

        I am not quite the educated man people think I am but, I have been reading a lot these days, specially the Indian Economy and Agro based industries and the so called “Recession” (which was a bluff really). It quite amused me to the core when i found this article while I was researching. Why and who would ever take this up! Good job on the written part but I’d really love to see some truth up there rather than writig about what happens in theory 😀 As far as statistics are concerned we all know numbers don’t lie, but they can sure be manipulated… Advice: Pick a better career 😀

        • January 5, 2010 1:50 PM

          i dont understand. you dont believe in the concept just because it is “theoritical” and i have presented “some statistics, which can be manipulated”. dont you think it is such a cliched retort. just because of the above mentioned traits it doesnt become impractical and unrealistic.
          plz come up with a better argument. i would really like to know your point of view.

  4. January 5, 2010 2:41 PM

    OK, tell me what would like an arguement on, be fair, there is too much room for debate on the above. ABM? or careers? or the agro base economy? or the social responsibility keyed in? You tell me what would you prefer to read about?

  5. January 5, 2010 6:12 PM

    Sure, I havent gotten around writing about Agriculture, Recession has kept me busy. I shall get u a link once i am done with the paper 🙂 Arguements? no ways, I just have opinions 😉 I loved all your other posts by the way and here it is 😀 Advice: When you write what you feel is when you write beautiful, keep it natural, references spoil your work somehow.

    (Again the above said is a personal opinion) 😀

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