The Oxford dictionary defines the word ‘business’ as buying and selling or trade or commercial work. The word trade or commerce means the exchange of goods as a means of livelihood or profit.
In our National Accounts, agro-processing, production of agro-chemicals and farm machinery, and trade (wholesaling and retailing) are considered as parts of the manufacturing (industrial) or service (tertiary) sector. With the structural transformation of the economy, the share of agricultural production (farming) in the economy is going down, and that of processing, distribution, and trade is increasing. Further, with the increase in backward and forward linkages, the distinction between agriculture and agro-industry is getting blurred.
Farm production, processing, and trade are getting increasingly coupled. The word ‘supply chain’ is being increasingly talked of and discussed. The supply chain is a coordinated system of organizations, people, activities, information, and resources involved in moving a product or service in physical or virtual form from supplier to the customer. Supply chain activities include the transformation of raw material and components into finished products that are then delivered to the end customers. In the developed countries, agribusiness is defined as the total output arising from farm production and product processing at both pre- and post-farm gate levels. In developing countries like India, the agribusiness sector encompasses four distinct sub-sectors, viz. agricultural inputs; agricultural production; agro-processing; and marketing and trade or utility to the goods.