Answer to Question #244121 in Marketing for Lar

Question

Explain agribusiness from a systems perspective. Cite literature from different sources. (300 words)

Answer 1

Until the early 1960s, economists examined agricultural output primarily through the lenses of markets and pricing, treating the agricultural sector as a separate entity. Market pricing was adequate to encourage cost-free coordination of production and distribution. Traditional intervention corrects fixed market defects and the resulting price distortions. The study did not focus on private initiatives in agriculture and associated industries. The major subject was government involvement in the market. Davis and Goldberg's (1957) contribution at Harvard University's Graduate School of Business Administration provided fresh views on food system analysis, which proved beneficial for public policy design and the architecture of commercial strategies. The authors recommended that agribusiness be defined as "the total of all activities engaged in the manufacture and distribution of farm supplies, farm production operations, and the storage, processing, and distribution of agricultural commodities." This idea evolved, giving rise to the term "Agribusiness Systems Analysis," which is based on two components: First, agriculture, which had previously been considered as an independent sector, became part of a specialized interdependent system of agents operating in interconnected businesses. The second important point raised by Goldberg is that value contributed at the farm level tends to diminish with time as a percentage of the overall value of output, which has major strategic implications. He was the first to emphasize the fact that margins increase as the product reaches its final market destination. Goldberg developed the Agribusiness Systems Model-based on sector analysis, emphasizing the inter-sectoral linkages.

Reference

Goldberg, R. A. (1968). Agribusiness Coordination: a systems approach to the wheat, soybean, and Florida orange economies. Agribusiness Coordination: a systems approach to the wheat, soybean, and Florida orange economies.