How Is an Agribusiness Different From Family Farming?

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The family farm is the oldest form of food producer in the United States. Agribusiness grew out of the family farm. Some people hold the opinion that agribusiness overgrew the family farm. In modern food production the differences between agribusiness and family farm have become as diverse as apples and oranges; the two are same type of business but have completely different characteristics.

Definitions

  • Agribusiness is defined as a business involved in agriculture. Agribusiness is actually a range of businesses from growing to processing and shipping of food. Family farming is defined as any farm with no hired manager or non-family corporation. A family farm has the owning family members supplying at least half of the man hours to operate the business. Agribusiness uses only hired personnel to run daily operations.

Size

  • Family farms are single-family operations. Land size is usually smaller than agribusinesses but can be any size. Agribusiness can hold operations in multiple communities and states, while family farms are mainly operated within one community.

Structure

  • Agribusiness is usually a vertical group containing multiple operations that can include, but are not limited to, farming. Agribusiness can include processing, shipping and possibly sales. Family farms deal in mainly farming with connections to others to get products to market. Family farms have the ability to sell in small numbers, and usually do this locally. Agribusiness can operate nationally and sometimes internationally.

Planting

  • Agribusiness farms normally grow one single crop or group of crops. There is little or no diversity to the land or the growing methods. Family farms grow a multifaceted fields with a variety of foods. Family farms started in efforts to create self-sufficiency. Agribusiness concentrates on the financial aspect of growing and therefore relies on one or similar crops that generate the most revenue. Family farms can use one or multiple crops to generate family income.

Financial

  • Agribusinesses are set to bring financial rewards to shareholders and corporations. Family farms have no outside shareholders. Agribusiness relies on streamlined operations and vertical integration to generate income. Family farms rely on simple profit and loss with much less integration.

Examples

  • An example of an Agribusiness would be Land O Lakes, which has multiple products all related to the dairy industry, such as butter and cheese. Another example of an agribusiness is Frito-Lay, whose main product is snack food. An example of a family farm is the farmer who sells his crop under contract to either of the business above. The family farm can be the local farmer you see at the farm markets as well. Another agribusiness example is a winegrowers cooperative in which the farms are also the larger corporation and are guided by the corporation. A winegrowers association is a group of family farms that, while joined to create better retailing and processing abilities, still operate as individual units.

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