The History of Farming as a Business Model: A Brief Guide

Agriculture and business have intersected since time immemorial. The terms are so closely intertwined, they're sometimes merged to form ‘agribusiness’, a theory that the private sector should be responsible for the stability of agriculture rather than the government.

In this short post, we'll take you through the history behind agribusiness, including how it emerged and why it remains central to modern life. Let's get into it!

1957: Where the Term Originated

Farming has existed for thousands and thousands of years. Although today we have multiple businesses dedicated to supporting the practice (such as daltonengineering.co.uk), farming was once viewed as a one-dimensional practice.

You planted crops, reared animals, and sold your produce for profit. Simple!

However, the need to reorganize the practice became more prevalent in light of a booming population and numerous expanding industries. This leads us to the invention of the term ‘agribusiness,’ a combination of agriculture and business.

First coined by John H. Davis and Ray A. Goldberg, the idea proposed that for farming to truly revolutionize, it required large corporations to take over.

Further Development: Industrialization

Despite being directly related to farming, the development of agribusiness didn't relate to on-farm activities. Instead, the key to successful development all happened off the farm, including how other industries may benefit from agricultural practices. This, in turn, would then motivate larger industries to support farming and create a network of mutually beneficial corporations.

Essentially, this would create a practically indestructible relationship between the industrial and agricultural sectors. Changes in government policy made this even more likely.

Throughout the 1970s, Secretary of Agriculture, Early Butz, heavily favored the idea of industrialized farming and was less fond of traditional family farms. In fact, he's quoted as saying ‘get big or get out’, so his stance was clear.

Introduction of Enhanced Technology

The ambitions of agribusiness heavily relied upon improved engineering and technology. The idea of enormous farms providing ample produce to the masses was ambitious and could not be achieved without a mixture of scientific developments, new machinery, and business-minded production — all of which assisted in making agribusiness a reality.

This often involved partnerships with universities to develop new and innovative ways to mass-produce farming products. It saw a shift in university education from the purpose of learning to the study of maximum economic benefit.

However, this all came at a price. Farming required significant financing to afford these new developments. Initially, this was achieved by smaller farms consolidating their funds.

However, the farming crisis in the 1980s meant many of these smaller farms could no longer keep up and were forced to shut down. Corporations moved in, and agribusiness has remained dominant ever since.

Farming and Business Have a Strong History

As one of the world's most significant and profitable industries, it's no wonder that farming and business have held such a strong partnership for so long with no sign of slowing down. Understanding the history of agribusiness can help us to understand where it may go next and what that means for farming as a whole.