Agribusiness management: understanding, function, and aspects in it

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Agribusiness management: understanding, function, and aspects in it

Agribusiness management understanding function and aspects in it

Some of us must have a few who are still lay with the terms of agribusiness management. To understand the true understanding of agribusiness management, we must know the explanation of each he said, namely the word management and agribusiness.

As we already know together, management has the meaning of managing. But what about agribusiness? Well, agribusiness itself has a business meaning based on business in agriculture or other fields in its derivatives.

So what is the understanding of agribusiness management? Find the full answer in this article:

Understanding of agribusiness management

So, basically agribusiness management is an activity in the agricultural industry or agro-industry which in it applies the principle of management science.

The principle of science of management imposed includes the function of planning, direction, control, preparation, and utilizing all existing resources to achieve a purpose, namely to produce a favorable product for its owners.

In the business world, agribusiness management has a very broad understanding and some experts also have different views.

But in concept, agribusiness management is an activity of procurement, distribution, to marketing various agricultural and agro-business products that have close relationships between one with others.

Management science has an important role in agribusiness as a means of forming more structured and well-organized agribusiness planning.

With this explanation, we can draw conclusion that planning in agribusiness has a very important role considering the business in agriculture is full of uncertainty and very vulnerable to losses.

Understanding of agribusiness management based on experts

E. Austin.

Austin explained that agribusiness management is a form of unity of business activity which includes farming, processing food, business facilities and various infrastructure of agricultural production, transportation, trade and also stability and other activities, including the distribution of food and fiber and fiber Food to consumers.


Wibowo and other experts explain that agribusiness is all activities carried out from the process of procurement, distribution, implementation, to the process of marketing products obtained from a farm or agro-business activities that are bound between one with the other.

Sjarkowi and M. Sufri

Sjarkowi and Sufri in his book explained that the meaning of agribusiness is all businesses that are closely related to agricultural production activities that include agricultural input companies and or production efforts themselves and also the management process of agriculture.

That means, agribusiness is an economic perspective for food agribusions in a country.

Agribusiness management function

You need to know that agribusiness has different characteristics with other types. Therefore, the application and various managerial functions applied in agribusiness are different. Some other functions of agribusiness, namely:

  • Organizing and distributing production facilities
  • Do cultivation activities
  • Processing goods
  • Goods marketing
  • Procurement and

The various agribusiness functions can be arranged into a system in which the entire system in it will be processed again into several sub-system groups.

The entire agribusiness system will only function maximally if all the subsystem functions in it can run well according to their functions. If later there will be a disruption to one sub-system, the system in it will be affected.

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Scope of agribusiness management

Until here we have understood that agribusiness management is a whole system, from the start of the subsystem to the provision of various production facilities and agricultural equipment, farmer business subsystems, processing sub-systems or agro-industry, and sub-system marketing.

The support of the sub-system and institutional facilities and infrastructure, as well as coaching sub-systems in it are needed so that the agribusiness system can operate according to its function.

Well, here are four important indicators in determining the success of agribusiness.

1. Farmers have improved well-being

  • Farmers’ Exchange Rate Increases
  • There is an increase in comparative advantage and also competitive farmers.
  • There is an increase in farming and attempted attempts related to farms
  • The quality of farming products and farming processing businesses can increase
  • Increased export value in agricultural commodities
  • Declining the value of importing agricultural commodities

2. Increased employment opportunities

  • An increase in the number of agribusiness businesses in the countryside
  • The development of the upstream industrial business and industries on farming processing
  • The unemployment rate in the countryside has decreased.

3. Increased food security

  • Increased availability of food sources
  • Food import material decreases
  • Decreased number of foods that are fast-prone society
  • There is an increase in diversification in non-rice food consumption.

4. Services for increased farmers

  • The presence of developments in more specific agribusiness technology
  • The presence of technology services in the agribusiness sector.
  • The presence of a Credit Service Center and also farmer production facilities
  • The formation of the agribusiness market center in various regions.

Important aspects in agribusiness management

In agribusiness management, there are several main aspects that must be prepared properly, including:

1. Compilation of Business Vision and Mission

As we discussed together from the definition of agribusiness management above, in deciding the department of an agricultural business is needed for vision planning and also the mission of Matan as the main form of implementation.

This can be done by analyzing SWOT or (Strength, Weakness, Opportunity Threat) on the type of business that is being developed. This is done nothing but to determine the direction of business and business trips in the future.

2. Marketing Plan

In agriculture, marketing management must be prepared before a production plan. The aim is of course to make a more targeted chart, such as what products will be produced, anyone who has to buy, marketing goals, and estimates of the price.

This is what makes agribusiness management have a very important role, because without a mature marketing plan, the product can certainly not sell well in the market. In fact, the agricultural industry is one of the vulnerable industries to fail because it is easy to wither and if it has withered it will not be feasible for consumption.

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3. Production plan

The production plan in agribusiness management is an asset use and also the means of companies in producing a product.

The main principle emphasized in it includes market orientation, which means producing or producing a product or service that is needed by the market. The aim is that if the item has been produced, it can be best selling in the market because there is value in it.

4. Financial Plan

Finance is one of the most important factors in any business. Finance is also the main goal in doing business.

Well, agribusiness management is needed to make a financial plan and if needed will be carried out together with consultants.

5. Resource plan

As we discussed above, agribusiness is an agricultural business which means it requires a lot of human resources. Thus, many recruitment processes will require many expenses for a company.

With good business management, it will help suppress the need for human resources, one example is by collecting several activities on one special responsibility.

The importance of agribusiness management

When having a business in agriculture, management is needed as a form of planning, management and also a review or a business that is being carried out.

Well, based on the above explanation, the management can be included in the form of a document that contains a business strategy, objectives, and related how a business will be done. Some examples of applying agribusiness management include:

  • Able to anticipate pest attacks and other diseases in plants.
  • Able to pay attention to the season of plants with the aim of maximizing crops.
  • Able to pay attention to the character of plant land
  • Able to pay attention to natural characters on a commodity.
  • Anticipation of pest attacks and plant diseases.

Well, by implementing good agribusiness management, a business will be able to run more systematically as a form of increasing the value of profits and minimizing the potential losses.


From the complete explanation above, we can draw the conclusion that agribusiness management is everything that is closely related to planning and also agro-industry management. For this reason, every effort in the agriculture will desperately need a good presence of management so that it can be directed to the right destination and gaining maximum profits.

The five main aspects that we have discussed above can be used as a foundation in making management documents more structured for good planning. In the end, profits will be able to get more optimally.

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