Agricultural Business Management: Definition, Characteristics, Objectives and Process
The Agricultural Business management helps the production and profitability of this sector so important to the economy of a country.
Agricultural companies increasingly need the management to be competitive and effective in their processes.
For this reason, today I will explain how good management will help you in managing the means of production and in achieving the objectives of your farm, hacienda, herd or farm.
The subject is easy and very enjoyable, and to help you in reading I raise the following points:
- What is the management of Agricultural Companies?
- Characteristics of agricultural or livestock companies.
- Objectives of the Agricultural management.
- Process of the management of Agricultural Companies.
- Resources of the management of Agricultural Companies.
- Profile of an Agricultural Administrator.
- Conclusions.
What is the management of Agricultural Companies?
The agricultural activity belongs to the primary sector of the economy. It uses renewable natural resources for agriculture, livestock, aquaculture and forestry.
It is important to highlight that this sector is key for the economic development of any country.
Hence the need to manage production factors, strengthen development and increase the competitiveness of companies in this sector.
This is how the management of Agricultural Companies appears , or simply Agricultural management.
It is a science that will analyze the dynamic environment and make the appropriate decisions.
In this sense, this discipline uses productive factors effectively to achieve sustainable and profitable development over time.
A concept of agricultural management is:
The decision-making process by which (scarce) resources are distributed over a number of alternatives; Its purpose is to organize, direct and control the business, in such a way that the objectives that have been set are achieved.
The planning, organization, direction and control of capital, human resources, technology and natural resources affect the production of these companies.
In summary, managing the available resources appropriately will make agricultural or livestock companies more compatible with the environment.
Characteristics of agricultural or livestock companies
- They are highly dependent on environmental factors, since the changes that occur in these affect production.
- The production process is biological, therefore it must be stimulated to increase production.
- They depend on natural resources, such as water and soil, which, being highly variable, are difficult to optimize.
- Inability to change business.
- Production processes cannot be reduced, that is, cycles must be respected.
- In agriculture you should wait to measure performance, unlike industrial companies that can predict it.
Objectives of the management of Agricultural Companies
The agricultural management allows to increase the productivity of the company making use of the technology.
Next, I describe the objectives of good agricultural management:
- Achieve a good combination of the company’s resources.
- Minimize losses and reduce waste of production factors.
- Maximize the company’s income. These are obtained with the sale of the products.
- Increase the competitiveness of the hacienda, herd or farm.
- Guide producers in the administrative process so that they use their production factors optimally.
- Promote the natural balance and thus guarantee that the company is more sustainable over time.
- Increase the productivity of the herd, farm or farm, making use of technology.
Process of the management of Agricultural Companies
After knowing in detail the agricultural and livestock companies, you must learn how to apply the administrative process.
For this reason, I briefly describe them to you:
Planning :
In this first stage, you define what you want to achieve in the future. What and how much to produce is established and policies are designed.
In this sense, planning must take into account:
- Government policies on the agricultural and livestock area.
- Available resources. Especially natural resources like land, water.
- Weather conditions.
- The risks derived from the dependence on resources and factors that can vary.
Organization :
Its purpose is to reduce, as much as possible, improvisation to reduce risks. For this, functions and resources are distributed.
In this sense, what machinery to use, what agricultural or livestock procedures to follow are defined, and the inputs and resources for production are distributed.
In addition, tasks and those responsible for them are assigned.
Execution :
It consists of carrying out the plans defined in the first stage of the process.
Here you must, among other activities, buy supplies, buy machinery, define work schedules.
In addition, producers will be trained in each of the company’s processes.
Control :
To carry out this process, the standards are defined and thus, when obtaining the results, you can compare them and verify the degree to which they were met.
Resources of the management of Agricultural Companies
The resources in a company are characterized by being scarce, but it is necessary to identify them to know how they contribute to the production process.
In this sense, I briefly describe the resources with which we work and which are administered in agricultural or livestock companies:
Natural resources: They are the resources that nature provides and that are essential in this type of companies. It is about the land, the water and the climate.
Human resources: They are the people who will perform agricultural or livestock functions. For example: the farmer, the agricultural engineer, the veterinarian, among others.
Capital: They are the goods that help the production process. It includes machinery, tools, infrastructure, livestock, supplies.
Examples of capital are: livestock used for milk production, silos, fertilizers, irrigation systems.
Capital also includes improvements made to land because, although they are not seen, they are permanent. For example, the land leveling.
Profile of an agricultural administrator
A company, regardless of the sector, must have trained personnel to carry out the different functions.
The agricultural administrator is the professional in the administrative area with extensive knowledge of agricultural and livestock activities.
Therefore, it must be in charge of planning, organizing, directing and controlling the production factors to satisfy the food demand of the population.
In this sense, the administrator will fulfill the following functions:
- Design production plans for the company.
- Guide agricultural activities in the different areas of the company.
- Manage the human resource that develops agricultural or livestock activities.
- Perform the combination of different resources in order to achieve the proposed objectives.
- Study and apply new technologies that increase the productivity and profitability of the company.
To successfully carry out these functions, in addition to knowing the production processes, the agricultural administrator must have knowledge of finance, markets, etc.
In addition, he must possess qualities such as leadership and the ability to adapt to changes, make decisions and face unpredictable situations.
Conclusions on Agricultural Business Management
Agricultural companies are very important to the economy of a country. Your success depends on the correct management of your scarce resources.
In summary, agricultural and livestock companies are characterized by their high dependence on natural resources, which makes everything more variable.
The agricultural management is the discipline that is responsible for applying the entire administrative process to the factors of production on a farm, farm, herd …
Its objective is to make the company productive, sustainable and profitable.
It is important to highlight that the ideal person to exercise the administrative process in a farm, herd, farm or estate, is the agricultural administrator.
The management of agricultural companies is only one of the types of management that exists.
Finally, I hope that the information I have shared will be useful to you. Also, check out these articles on management:
- Risk Management: Functions, Process, Objectives and Importance
- Operations Management: Definition, Principles Objectives, Importance and Functions
Thanks for reading this article on Agricultural Business Management.
