Commercial agriculture
Encyclopedia
Commercial Agriculture refers to a process of large-scale production of crops
for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat
, maize
, tea
, coffee
, sugarcane
, cashew
, rubber
, banana
, cotton
are harvested and sold into world markets. Commercial agriculture includes livestock
production and livestock grazing. Due to the expensive nature of capital formation and implementation of technological processes, the landowners of such farms are often large agricultural corporations (especially in developing countries). Large-scale commercial farming, in terms of some of its processes, may be conceptually not very different from large industrial enterprises; United Fruit Company (now Chiquita Brands International) is an example. Commercial farming is most commonly found in advanced industrialized nations. The harvested crop may be processed on-site (or shipped to a processing facility belonging to the farm owners) and then sold to a wholesaler as a complete product, or it may be sold as-is for further processing elsewhere. Commercial Agriculture differs significantly from subsistence agriculture
, as the main objective of commercial agriculture is achieving higher profits through economies of scale, specialization, introduction of capital-intensive farming techniques, labour-saving technologies, and maximization of crop yields per hectare through synthetic and natural resources (fertilizers, hybrid seeds, irrigation, etc.).
. This may be further augmented by higher levels of technology that might significantly reduce the risk of poor harvests. Thus, the key difference between commercial farming and less-developed forms of agriculture is the new emphasis on capital formation, scientific progress and technological development, as opposed to a reliance mainly on natural resource utilization that is common to subsistence and diversified agriculture.
1. Location
Commercial farms must move their products to market. Farms need to be located near transportation systems. Trucks, ships, planes, and trains are several ways that products can be moved from where they are grown or made to where customers can buy them.
2. Climate
A farm's soil, as well as the climate of the region in which it is located, determine what crops will grow there or whether the land can support livestock. The temperature and rainfall can also determine the type of crop grown. For example, oranges must be grown in a hot climate. They will not grow if the temperature is too cold.
3. Raw Materials
A commercial farm depends on raw material. For example, a farmer will plant grain to get wheat. A farmer will have dairy cows to produce milk. Seeds and animals are two examples of raw materials used in commercial agriculture.
4. Market Forces
Supply and demand are important for selling agricultural products. If there is a high demand for a product and low supply, the price will be increased.
5. Labour
People who work on farms provide different types of labour. Labour is needed to plant crops, as well as to harvest them. This is important because some produce, such as grapes, need to be hand harvested.
6. Transportation
Movement of agricultural products to market depends on transportation systems. For example, produce is shipped by rail in special refrigerated cars, then shipped across the ocean. Some crops. such as fruit, must get to the market quickly, or else they will rot; crops like these are often shipped shorter distances or are sold in the regions where they are grown.
Crop (agriculture)
A crop is a non-animal species or variety that is grown to be harvested as food, livestock fodder, fuel or for any other economic purpose. Major world crops include maize , wheat, rice, soybeans, hay, potatoes and cotton. While the term "crop" most commonly refers to plants, it can also include...
for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
, tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, sugarcane
Sugarcane
Sugarcane refers to any of six to 37 species of tall perennial grasses of the genus Saccharum . Native to the warm temperate to tropical regions of South Asia, they have stout, jointed, fibrous stalks that are rich in sugar, and measure two to six metres tall...
, cashew
Cashew
The cashew is a tree in the family Anacardiaceae. Its English name derives from the Portuguese name for the fruit of the cashew tree, caju, which in turn derives from the indigenous Tupi name, acajú. It is now widely grown in tropical climates for its cashew nuts and cashew apples.-Etymology:The...
, rubber
Rubber
Natural rubber, also called India rubber or caoutchouc, is an elastomer that was originally derived from latex, a milky colloid produced by some plants. The plants would be ‘tapped’, that is, an incision made into the bark of the tree and the sticky, milk colored latex sap collected and refined...
, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
, cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
are harvested and sold into world markets. Commercial agriculture includes livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
production and livestock grazing. Due to the expensive nature of capital formation and implementation of technological processes, the landowners of such farms are often large agricultural corporations (especially in developing countries). Large-scale commercial farming, in terms of some of its processes, may be conceptually not very different from large industrial enterprises; United Fruit Company (now Chiquita Brands International) is an example. Commercial farming is most commonly found in advanced industrialized nations. The harvested crop may be processed on-site (or shipped to a processing facility belonging to the farm owners) and then sold to a wholesaler as a complete product, or it may be sold as-is for further processing elsewhere. Commercial Agriculture differs significantly from subsistence agriculture
Subsistence agriculture
Subsistence agriculture is self-sufficiency farming in which the farmers focus on growing enough food to feed their families. The typical subsistence farm has a range of crops and animals needed by the family to eat and clothe themselves during the year. Planting decisions are made with an eye...
, as the main objective of commercial agriculture is achieving higher profits through economies of scale, specialization, introduction of capital-intensive farming techniques, labour-saving technologies, and maximization of crop yields per hectare through synthetic and natural resources (fertilizers, hybrid seeds, irrigation, etc.).
Development
Commercial farming is a progression from diversified (sometimes called mixed) farming, where the farmer's intention is to produce goods for sale primarily for widespread consumption by others. The farmer may acquire a sufficiently large amount of arable land and/or sufficiently advanced technology. In advanced countries, there is also investment in expensive capital equipment like tractors, harvesters and so forth. At this point, it may become more profitable for the farmer to specialize and focus on one or a few particular crops due to economies of scaleEconomies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
. This may be further augmented by higher levels of technology that might significantly reduce the risk of poor harvests. Thus, the key difference between commercial farming and less-developed forms of agriculture is the new emphasis on capital formation, scientific progress and technological development, as opposed to a reliance mainly on natural resource utilization that is common to subsistence and diversified agriculture.
Types
There are types of commercial agriculture:- Intensive Commercial Farming: A system of agriculture in which relatively large amounts of capitol or labour and applied to relatively smaller areas of land. It is practiced in countries where the population pressure is reducing the size of landholdings. The State of West BengalWest BengalWest Bengal is a state in the eastern region of India and is the nation's fourth-most populous. It is also the seventh-most populous sub-national entity in the world, with over 91 million inhabitants. A major agricultural producer, West Bengal is the sixth-largest contributor to India's GDP...
in IndiaIndiaIndia , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
provides one of the best examples of intensive commercial farming.
- Extensive Commercial Farming: It is a system of agriculture in which relatively small amounts of capital or labour investment are applied to relatively large areas of land. At times, the land is left fallow to regain its fertility. It is mostly mechanized as labour is very expensive or may not be available at all. It usually occurs at the margin of the agricultural system, at a great distance from market or on poor land of limited potential. It is practiced usually in the tarai regions of southern Nepal. Crops grown are sugarcane, rice and wheat.
- Plantation Agriculture: Plantation is a large farm or estate usually in a tropical or sub-tropical country where crops are grown for sale in distant markets rather than local consumption.
Factors
Commercial agriculture contains six key factors:1. Location
Commercial farms must move their products to market. Farms need to be located near transportation systems. Trucks, ships, planes, and trains are several ways that products can be moved from where they are grown or made to where customers can buy them.
2. Climate
A farm's soil, as well as the climate of the region in which it is located, determine what crops will grow there or whether the land can support livestock. The temperature and rainfall can also determine the type of crop grown. For example, oranges must be grown in a hot climate. They will not grow if the temperature is too cold.
3. Raw Materials
A commercial farm depends on raw material. For example, a farmer will plant grain to get wheat. A farmer will have dairy cows to produce milk. Seeds and animals are two examples of raw materials used in commercial agriculture.
4. Market Forces
Supply and demand are important for selling agricultural products. If there is a high demand for a product and low supply, the price will be increased.
5. Labour
People who work on farms provide different types of labour. Labour is needed to plant crops, as well as to harvest them. This is important because some produce, such as grapes, need to be hand harvested.
6. Transportation
Movement of agricultural products to market depends on transportation systems. For example, produce is shipped by rail in special refrigerated cars, then shipped across the ocean. Some crops. such as fruit, must get to the market quickly, or else they will rot; crops like these are often shipped shorter distances or are sold in the regions where they are grown.