Relationship of Sustainable Agriculture in Agribusiness

Introduction

Sustainable Agriculture: Sustainable Agriculture is defined as an integrated system of plant and animal
production practices having a site specific application that will last over the long term. For example to
satisfy human food and fiber needs, to enhance environment quality, and the natural resources based
upon which the agriculture economy depends, to make the most efficient use of non renewable and on-
farm resources and integrated natural biological cycles and controls, to sustain the economic viability of
farm operations and to enhance the quality of life for farmers and society as a whole. The study and
practice of sustainable agriculture requires a systems approach with the key components viewed
relationally as a whole, inseparable and interdependent, and investigation that encompasses both the
principles common to all complex entities and models, which can be used to describe them. Sustainable
agriculture requires a holistic systems approach to resource management, considering the distinct
physical, biological, and social possibilities and limits of complex, interrelated organisms and sub-
organisms. There are several key principles associated with sustainability in Agriculture which are the
incorporation of biological and ecological processes into agricultural and food production practices. For
example, these processes could include nutrient cycling, soil regeneration, and nitrogen fixation using
decreased amounts of non-renewable and unsustainable inputs, particularly the ones that are
environmentally harmful, using the expertise of farmers to both productively work the land as well as to
promote the self-reliance and self-sufficiency of farmers, solving agricultural and natural resource
problems through the cooperation and collaboration of people with different skills. The problems tackled
include pest management and irrigation. Sustainable agriculture can be understood as an ecosystem
approach to agriculture. Practices that can cause long-term damage to soil include excessive tilling of the
soil (leading to erosion) and irrigation without adequate drainage (leading to salinization). Long-term
experiments have provided some of the best data on how various practices affect soil properties
essential to sustainability.

A sustainable farm achieves environmental soundness by reducing unnecessary chemical or fuel inputs.
Practices are adopted that conserve soil and water resources and encourage ecological diversity and the
presence of natural pest predators through habitat creation or preservation. An integrated approach to
insect, weed and disease management that includes cultural, biological and chemical methods
capitalizes on the natural systems that keep outbreaks in check. Sustainable agriculture integrates three
main goals--environmental health, economic profitability, and social and economic equity. Sustainability
rests on the principle that we must meet the needs of the present without compromising the ability of
future generations to meet their own needs. Therefore, stewardship (or taking care) of both natural and
human resources is of prime importance. Stewardship of human resources includes consideration of
social responsibilities such as working and living conditions of laborers, the needs of rural communities,
and consumer health and safety both in the present and the future. Stewardship of land and natural
resources involves maintaining or enhancing this vital resource base for the long term. Finally, it is
important to point out that reaching toward the goal of sustainable agriculture is the responsibility of all
participants in the system, including farmers, laborers, policymakers, researchers, retailers, and
consumers. Each group has its own part to play, its own unique contribution to make to strengthen the
sustainable agriculture community.

A farm system that mimics as closely as possible the complexity of a healthy and natural ecosystem is
referred as sustainable agriculture.
Goals of Sustainable agriculture include:
1. Providing a more profitable farm income.
2. Promoting environmental stewardship.
3. Promoting stable, prosperous farm families and communities.
Sustainable agriculture reduces inputs, uses ecological pest and weed management strategies, cycles
nutrients back into the soil for fertility and health, strengthens rural and urban communities, produces
viable farm income, promotes healthy family and social values, brings the consumer back into
agriculture.

Agribusiness: Agriculture is an art of cultivating various categories of crops, including animal

husbandry, forestry, fishery and other related activities. Business is an economic unit,that aims to
sell goods and services to customer/consumers at prices that will provide an adequate return to its
owner. Simply it means commercialization of any enterprise. And Management is a set of activities
(planning/decision making, organizing, leading, directing/controlling directed at an organization’s
resources (human, financial, physical and information) with the aim of achieving organizational
goals in an efficient and effective manners).Agriculture has evolved into agribusiness undergoing a
rapid transformation from its traditional subsistence roots to a more modernized to eventually
industrialized sector, however, there are also a large number of countries that have stalled in the
transformation process and have to get agriculture moving. Nepal is still in between subsistence
and modernization process of agriculture. Agribusiness include not only those that farm the land
but also the people and firms that provide the inputs (for ex. Seed, chemicals, credit etc.), process
the output (for ex. Milk, grain, meat etc.), manufacture the food products (for ex. ice cream, bread,
breakfast cereals etc.), and transport and sell the food products to consumers (for ex. restaurants,
supermarkets). Knowing something about how agribusiness came about makes it easier to
understand how this system operates today and how it is likely to change in the future.
Initially agriculture being the major venture it was easy to become a farmer, but productivity was
low. Farmer produced food to feed just their family. As a consequence, most farmers were nearly
totally subsistent and just self-sufficient. They produced most of the inputs they needed for
production, such as seed, draft animals, feed and simple farm equipment. Farm families processed
the commodities they grew to make their own food and clothing. They consumed or used just about
everything they produced. The small amount of output not consumed on the farm was sold for cash.
These items were used to feed and clothe the minor portion of the country’s population that lived in
villages and cities. A few agricultural products made their way into the export market and were sold
to buyers in other countries. Agribusiness management encompasses many aspects of the economy:
agricultural producers, businesses that provide supplies and services to the producers (including
cooperatives), businesses that add value to agricultural products, and those that facilitate the
marketing of agricultural products to an ever-growing marketplace. Farmers found it increasingly
profitable to concentrate on production and began to purchase inputs they formerly made
themselves. This trend enabled others to build business that focused on meeting the need for inputs
used in production agriculture such as seed, fencing, and machinery and so on. These farms
involved into the industries that make up the “agricultural inputs sector”. Input farms are major part
of agribusiness and produce variety of technologically based products that account for
approximately 75 per cent of all the inputs used in production agriculture. At the same time the
agriculture input sector was evolving, a similar evaluation was taking place a commodity processing
and food manufacturing moved off the farm. The form of most commodities (wheat, rice, milk,
livestock and so on) must be changed to make them more useful and convenient for consumers. For
example, consumers would rather buy flour than grind the wheat themselves before backing a cake.
They are willing to pay extra for the convenience of buying the processed commodity (flour) instead
of the raw agriculture commodity (wheat). During the same period technological advance were
being made in food preservation method. Up until this time the perishable nature of most
agriculture commodities meant that they were available only at harvest. Advance in food processing
have made it possible to get those commodities all throughout the year. Today even most farm
families’ use purchased food and fiber products rather than doing the processing themselves. The
farms that meet the consumers demand for greater processing and convenience also constitute a
major part of agribusiness and are referred to as the processing manufacturing sector. It is clear
that the definition of agriculture had to be expanded to include more than production. Farmers rely
on the input industries to provide the products and service they need to produce agricultural
commodities. They also rely on commodity processors, food manufactures, and ultimately food
distributors and retailers to purchase their raw agricultural commodities and to process and deliver
them to the consumer for final sale. The result is the food and fiber system.
The food and fiber system is increasingly being referred to as “agribusiness”. The term agribusiness
was first introduced by John H. Davis and Ray A. Goldberg in 1957. In 1980s it was given three
connotations: synonymous with term agriculture, synonymous with agricultural economics and a
modified concept of agriculture, excluding farming, or the off-farm aspects of agriculture. It
represents three-part sub-systems;
i. The agricultural input
ii. The production and
iii. The processing-manufacturing.

The capture the full meaning of the term “agribusiness” it is important to visualize these three sub-
systems as interrelated parts of a system in which the success of each part depends heavily on the
proper functioning of the other two.

They believed that the concept of agriculture as industry had, in 1957, already existed for over 150
years when a typical family would not only grow and raise food but also produce and use the means
necessary for this production i.e., draft animals, tools, fertilizers, processing and retailing. In other
words, agribusiness encompasses all enterprises that take place inside and outside the farm gate,
bringing products from the field to the consumers. Agribusiness consisted not only of food
production by itself, but included other processes such as generation or acquisition of production
inputs, use of farm produce in different forms through processing and trading of farm products.
Hence, there begun a “specialization” into different aspects of the agricultural industry process.
However, each of these parts relies on the entire process, such that, one cannot function without the
rest. In essence, agribusiness consists of all industries surrounding food production, ultimate end-
user is the consumer, with marketing as the driving force behind all profitable activities.
Agribusiness deals with commodities that are of short shelf-life; hence, marketing plays a vital part
in moving the inputs, products, and by-products to the different sectors and the consumers.

Relationship of Sustainable Agriculture and Agribusiness

Nepal is predominantly an agricultural country where 65.7 percent people are directly involved in
agriculture (MoAD, 2013).The agriculture sector in Nepal constitutes about 36 percent of the national
GDP in 2011/12 (ABPSD, 2012).An agricultural knowledge generation and information system for rural
development and sustainable agriculture links people and institutions to promote mutual learning and
generate, share, and utilize agriculture-related technology, knowledge, and information (FAO/World
Bank, 2000). The system incorporates farmers, agricultural educators, researchers, and extension
workers to harness knowledge and information from various sources, especially from farmer's
“indigenous knowledge systems” (IKSs) for better farming and improved livelihoods. Indigenous
knowledge is the information base for a society, which facilitates communication and decision making.
Generally indigenous knowledge evolves in local environment, so that it is specifically adapted to the
requirement of local people and condition. The investigation of different agricultural knowledge and
information systems based on comparative concepts, structures, and functions for extracting and
delineating appropriate framework for SAKIS. AKIS in Kenya, Hagaz (Eritrea), Israel and Netherlands have
been addressed.
Generation indicates about a space available for work; and an individual occupies that space for a given
time period depending on his/her capability, interest and availability of time. The employer pays to the
employee or laborer for the work/job done as per mutual agreement or company’s rules.
Based on the ownership to such resources employment is broadly divided into two categories:
• Self-employment- when the grower/laborer owns the productive resources and
manages/mobilizes for himself/his household; and
• Employment in other’s Agribusiness: when the producer/laborer works in an
enterprise/farm/industry that belongs to another person/group.
Similarly, based on the nature of the product the employment may be divided into:
• On-farm –if it is related to agricultural work
• Off-farm- if it is related to non-agricultural work .
Generation of Employment Opportunities
On-farm employment:
• Crop-based enterprises
• Livestock-based enterprises
• Soil/compost-based enterprises
• Non-timber forest product-based enterprises
• Mixed enterprises
• Agro-based small industries
Off-farm employment:
• Wage labor (porter, tourist guide, coolie, “Thela gada” or riksa driver)
• Service in different offices/industries/hotels
• Foreign employment
• Miscellaneous jobs in informal sector