Agriculture

Agriculture is the oldest, and arguably the most critical, industry in human  history.

The agribusiness industry encompasses enterprises engaged in growing crops, raising animals, providing inputs for agricultural activities (seeds, fertilizers, irrigation, feed, machinery, etc.), and postharvest storage, processing and distribution. The development and growth of agribusinesses is crucial to economic growth. According to the World Bank, growth in the agribusiness sector is two to four times more effective in raising incomes among the poorest compared to other sectors. The industry is in a constant state of evolution as new technologies and methods lead to increased productivity and efficiency.

Timeline

11,000 — 8,000 B.C.
Humans domesticate animals for consumption, plant the first crop seeds and develop agricultural tools to assist with the harvest
6,000 B.C.
People living along the Nile River in Egypt and the Tigris and Euphrates Rivers in Mesopotamia invent the first form of farm irrigation
4,000 B.C. — 250 B.C.
Use of tools and animals (like the ox and horse plough) and new technologies improved the ability to cultivate land, increased agricultural productivity, and contributed towards the move from nomadic to stationery societies
900 — 1600
Exploration leads to increased trade and the exchange of a variety of plants and farming and preservation methods
1700 — mid 1800s
Invention of mechanized machinery and additional advances in farming methods further increase agricultural productivity and food supply, contributing towards rapid population growth
mid 1800s — early 1900s
Better food processing technologies (such as refrigeration, pasteurization, and canning) and faster transportation methods allow agricultural commodities to be distributed wider and easier
1930s — 1960s
Green Revolution leads to increased agricultural production worldwide, particularly in Mexico, India, Pakistan, the Philippines and other developing countries
1960s — Present day
Continued advancements machine technology, plant breeding, soil conservation, and food science have allowed farmers to specialize and make full use of natural resources, and improved preservation, packaging and distribution has led to better food quality

Statistics

Sub-Saharan Africa: World:
$313B Total Current Size ($)
$5T Total Current Size ($)
$1T Expected Size by 2030 ($)
Expected Size by 2030 ($)
32% of GDP
7% of GDP
65% of Workforce
35% of Workforce
of Total Consumer Spending
10% of Total Consumer Spending

Subsectors

Some sub­sectors in the agribusiness industry include:

  • Agrochemicals
  • Animal Slaughtering and Processing
  • Aquaculture
  • Crop Production
  • Commercial Fishing
  • Dairy Production
  • Edible Oils
  • Equipment and Machinery
  • Extracts
  • Farm Support Services • Food Processing and Manufacturing
  • Food Storage and Distribution • Horticulture
  • Insurance
  • Seeds
  • Veterinary Services

Global Leaders

Agribusiness is a diverse and extremely fragmented industry. Some of the global leaders in the industry include:

  • Del Monte Foods
  • Dole Food Company
  • Cargill
  • Tyson Foods
  • Hormel Foods Corp
  • Deere & Company
  • Caterpillar
  • Archer Daniels Midland • Monsanto Company
  • BASF
  • Dow Chemical
  • Syngenta
  • DuPont
  • Potash Corp.

Trends

Trends

Emerging markets, and countries in Africa in particular, are experiencing increasing population growth, urbanization, and increased income. Half of global GDP growth will occur in emerging markets, which will increase food demand and demand for more calories, protein, and processed food. Although there will be some pressures for consolidation in the industry, there is an opportunity for smallholder farmers to leapfrog traditional agribusinesses through technology and empowerment, especially within specialty niches in the value chain. Trends to watch for in developing countries include:

  • Improving innovations in the areas of probiotics and genetically modified organisms that lead to increased crop and animal productivity
  • Integration of smallholder farmers directly into the commercial value chain • Increased focus on digital technology, information systems, and access to finance
  • Investments in dry and cold storage to mitigate losses
  • Consolidation of firms across the agricultural value chain • Increased demand for healthconscious food

Risks & Challenges

Risks & Challenges

Investors in the agribusiness industry should take a longterm view on their investment (7 years or more) due to volatility in the industry. Businesses in the industry are susceptible to some of the following risks and challenges:

  • Climate change and extreme weather conditions
  • High volatility and decreasing prices in commodities
  • Watersecurity
  • Soil depletion
  • Increased regulatory standards for food production and environmental sustainability

Future Outlook

Future Outlook

Until the day that the human species finds a way to subsist without the need to eat food for sustenance, the agribusiness industry will remain strong and vibrant globally. Rapid population growth and erratic climate conditions will place significant pressure on food security. Despite increased scrutiny and regulations around scientific advancements, the rate of innovation will continue to increase and this will lead to higher productivity and growth in the industry.