The goal of the global agribusiness value chain, which spans input companies through to the final consumer and has a total value of around US$5 trillion, is to provide sustainable access to affordable food, feed, fibre and, more recently, fuel. However, this goal is getting harder to achieve every year due to several prominent challenges.
On the demand side, the growing global population and economic growth combine to generate more need for increased levels of crop and food production. Policies promoting biofuels have also added a significant new source of demand to the equation. Apart from such considerations affecting the quantity of demand, there are also drivers affecting its quality as the food chain and consumers increasingly consider the environmental and social dimensions of how food is produced. On the supply side, there is concern about declining levels of yield gain, whether due to the laws of diminishing returns or the effects of water shortages and global warming.
The agribusiness sector’s complex value chain spans input companies, farmers, traders, food companies and retailers, all of whom must ultimately satisfy the varying demands of the consumer in a sustainable manner.The sector encompasses huge diversity and variety at each stage, from R&D-based input companies to generic manufacturers, subsistence farmers to high tech agroholdings, biotech boutiques and small and medium-sized enterprises (SMEs) to multinational corporations.