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The business of agriceuticals

Nature Biotechnology volume 17, pages BV5–BV6 (1999)Cite this article

Forty-two years ago when John H. Davis and I wrote A Concept of Agribusiness 1, we recognized that private, public, and farm cooperative decision making required a systems approach. Decision makers had to position their firms and/or institutions in a supply chain that stretched from farm input to the finished food, fiber, feed, or fuel product originating from land or water. That chain involved farm supply (seed and agrochemicals), farmers, assemblers of farm produce, food processors, distributors, and ultimately consumers.

The world, of course, has changed in the last half century, not least in agribusiness. The industrialization of the global agribusiness system has concentrated opportunities for adding value to the process end of the chain (Table 1). In 1950, the farmer contributed roughly 32% of the added value. By 2028, I estimate that farmers will add only 10%. Whereas food processing and distribution accounted for half of 1950's added value, it will account for over 80% in 2028.

Table 1 The value-added in global agribusiness has shifted markedly towards the end product between 1950 and 2028.
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Figure 1: US agribusiness consolidation.
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References

  1. Davis, J.H. and Goldberg, R.A. A Concept of Agribusiness (Harvard Business School, Cambridge, MA, 1957).

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  2. Harvard Business School. Case #N9-599-057. Wegmans Food Markets: Diabetes Counseling. Prepared by Research Associate Ann Leamon under the supervision of Ray A. Goldberg and David E. Bell, November 6, 1998. (Harvard Business School, Cambridge, MA, 1998).

  3. Margretta, J. Harvard Business Review January/February 1997, 78–88.

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  1. Harvard University Graduate School of Business Administration, Soldiers Field, Boston, 02163, MA, USA

    Ray Goldberg

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Goldberg, R. The business of agriceuticals. Nat Biotechnol 17 (Suppl 2), BV5–BV6 (1999). https://doi.org/10.1038/7146

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