Agriculture Reference
In-Depth Information
Government involvement
. Due to almost every other factor raised above, the government has
a fundamental role in food and agribusiness. Some government programs infl uence
commodity prices and farm income. Others are intended to protect the health of the
consumer through safe food and better nutrition information. Still other policies regu-
late the use of crop protection chemicals, and affect how livestock producers handle
animal waste. Tariffs and quotas impact international trade. School lunch programs
and food stamps help shape food demand. The government, through policies and regula-
tions, has a pervasive impact on the job of the food and agribusiness manager.
Each of these special features of the food production and marketing system affects
the environment where an agribusiness manager practices their craft. Agribusiness is unique
and thus, requires unique abilities and skills of those involved with this sector of the U.S.
economy.
The food production and marketing system
The highly effi cient and effective
food production and marketing system
in the U.S. is a
result of a favorable climate and geography; abundant and specialized production and
logistics capabilities; intense use of mechanical, chemical, biological, and information tech-
nologies; and the creative and productive individuals who lead and manage the fi rms which
make up the food and agribusiness industries. This U.S. food production and marketing
system produces enormous supplies of food and fi ber products. These products not only feed
and clothe U.S. consumers, but are also exported to the international marketplace to fulfi ll
needs of consumers around the world.
The food production and marketing system encompasses all the economic activities
that support farm production and the conversion of raw farm products to consumable goods.
This broad defi nition includes a farm machinery manufacturer, a fertilizer mine, a baby food
factory, the paper fi rm that supplies cardboard boxes, rail and trucking fi rms, wholesalers,
distributors, and retailers of food, restaurateurs, and many, many others.
The U.S. food production and marketing system is extremely large, directly employing
over ten million workers, generating $646 billion worth of value-added products and serv-
added production to the gross domestic product (GDP) of the U.S. economy.
Note that the U.S. economic activity also includes the contributions of fi rms providing
inputs to the farm, forestry, and fi sheries sectors. In 2009, $207.6 billion of energy, materi-
als, and purchased inputs were used by farming and related ventures, representing 1.5 per-
cent of GDP (
Table 1.1)
. In addition, the food and agribusiness sectors are key contributors
to the economic activity of transportation, wholesaling, and retailing in the U.S. Prior
estimates put this effort at 5.4 percent of U.S. GDP (Edmonson 2000).
Food and agricultural systems vary widely across the globe. Countries with higher per
capita GDP (over $25,000) typically have a lower proportion of their population (under 3
percent) involved in production agriculture (
Table 1.2
). In contrast, the characteristics of the
less developed countries fi nd a lower GDP per capita and a higher proportion of the popula-
tion involved in production agriculture. In China, 40 percent of the population is involved in
farming, while in India the fi gure is 52 percent. The continued economic growth of these
countries is fueling a tremendous demand for additional inputs, as well as branded food
products. As a result, many U.S. fi rms are attempting to establish joint ventures with fi rms in
these countries to aid in this development process, and build future markets in the process.
