Difference between farming and agribusiness
Many people use the terms farming and agribusiness interchangeably, yet they represent different concepts within the agricultural sector. Understanding the difference between farming and agribusiness is important for farmers, investors, students and anyone interested in building a profitable venture in agriculture. While farming focuses mainly on production, agribusiness covers the entire agricultural value chain, from inputs to the final consumer.
What is farming?
Farming is the practice of growing crops and rearing animals for food, fiber or other agricultural products. It is the most basic and traditional form of agriculture. Farmers concentrate on activities such as land preparation, planting, irrigation, animal feeding, disease control and harvesting.
In many parts of Africa, farming is largely small-scale and subsistence-based. The main goal is to produce enough food for household consumption, with surplus sold in local markets. Income generation exists, but it is often secondary to food security. Farming relies heavily on natural factors such as rainfall, soil fertility, and climate conditions, which makes it vulnerable to risks like droughts, pests and diseases.
What is Agribusiness?
Agribusiness refers to agriculture practiced as a business with a strong focus on profitability, efficiency and market demand. It goes beyond production and includes all activities along the agricultural value chain. This means agribusiness covers input supply, production, processing, storage, transportation, marketing and distribution of agricultural products.
Unlike traditional farming, agribusiness is market-driven. Decisions are based on consumer needs, pricing, quality standards and long-term sustainability. Agribusiness can be small, medium or large-scale and often incorporates technology, innovation, value addition, branding and formal business structures.
Key differences between farming and agribusiness
1. Scope of Operations
The main difference between farming and agribusiness lies in their scope. Farming is limited to producing crops or livestock. Agribusiness, on the other hand, includes production plus all supporting and downstream activities such as processing, packaging, marketing and export.
For example, a maize farmer who grows and sells maize is practicing farming. A company that supplies seeds, processes maize into flour, brands it and sells it to supermarkets is engaged in agribusiness.
2. Purpose and Goals
Farming is often aimed at food production and household survival, especially in subsistence systems. Profit may not always be the primary goal. Agribusiness is profit-oriented and focuses on wealth creation, business growth and sustainability.
Agribusiness operators plan for scalability, consistent income, and long-term market presence, while farmers may focus on seasonal production.
3. Business and management approach
Farming can be informal and based on traditional knowledge passed down through generations. Record keeping, budgeting, and market analysis may be minimal. Agribusiness applies formal business principles such as financial planning, market research, risk management and performance evaluation.
In agribusiness, activities are guided by business plans, contracts and structured management systems.
4. Value Addition and Processing
Most farming activities end at harvesting or livestock sale. Agribusiness emphasizes value addition to increase profits. This includes processing raw products into finished or semi-finished goods such as milk into yoghurt, fruits into juices or grains into flour.
Value addition helps agribusinesses reduce post-harvest losses, meet quality standards, and access higher-value markets.
5. Market Orientation
Farming is often production-driven, meaning farmers grow what they are familiar with and then look for a market. Agribusiness is market-driven, meaning production decisions are based on market demand, consumer preferences, and price trends.
Agribusiness operators identify target markets before production begins, ensuring better pricing and reduced loss.
6. Use of Technology and Innovation
Traditional farming may use basic tools and manual labor. Agribusiness adopts modern technologies such as mechanization, irrigation systems, improved seed varieties, digital platforms and data-driven decision-making.
Technology increases efficiency, reduces costs and improves product quality in agribusiness.
Relationship between farming and agribusiness
Farming is the foundation of agribusiness. Without farmers producing raw agricultural products, agribusiness cannot exist. Agribusiness, in turn, supports farming by providing inputs, markets, financing and technical services.
When farming is transformed into agribusiness, farmers move from subsistence production to commercial and sustainable enterprise.
Why understanding the difference matters
Knowing the difference between farming and agribusiness helps individuals and policymakers make better decisions. Farmers can shift from traditional farming to agribusiness by focusing on markets, value addition, and business planning. Investors can identify opportunities along the value chain, while governments can design policies that support agricultural commercialization and job creation.
In summary, farming focuses on agricultural production, while agribusiness encompasses the entire agricultural value chain with a strong business orientation. Farming feeds people, but agribusiness feeds economies. Transforming farming into agribusiness is key to increasing incomes, reducing unemployment and driving sustainable economic growth, especially in developing countries.
Author: Moureen Koech
Moureen Koech is a passionate Digital Journalist, an adept Agribusiness Writer with a keen eye for news and an impactful story-teller,whose stories provide key value to Agripreneurs and stakeholders in the Agricultural sector
