Agro Food Company

Table of Contents
1.0.

Introduction.....................................................................................................................3

1.0.

Agro-food production circuits.........................................................................................4

2.0.

Global shifts in the agro-food industries.........................................................................6

3.0.

Consumption...................................................................................................................9

4.0.

The role of the state.......................................................................................................10

4.1.

Promoting and protecting agro-food industries:........................................................10

4.2.

Regulating agro-food industries:...............................................................................11

5.0.

A new phenomenon: state land grabs........................................................................11

6.0.

Impact of FDI on agro-food industry............................................................................12

7.0.

Conclusion.....................................................................................................................12

References................................................................................................................................14

1.0. Introduction
The production of food is ultimate fundamental of all human needs. It is basically dependent
on the abstraction of resources and materials from the natural environment. Production of
food is a renewable process and its agriculture process can be harmed by soil erosion, water
shortages and over production (Dickens, 2011). The fact is identified that food production is
different from other manufacturing industries. They are placed in biophysical processes. On
the other hand, high value foods has captured global market by increasing in consumption
and distribution (McMichael, 2013). Prosperous consumers, with high excess to supermarket
shelves, the seasons have been expatriate by permanent global summertime (OECD, 2012,
pp. 45-748).
Generating food for the global market is a tough task because it requires great capital
investment and provides enormous power to the transactional huge retailers and food
manufacturers. Producing food can create good opportunities as well as big problems to the
food suppliers because they are now entered into network of agro-food production (Pritchard,
2013).
The interest for nourishment and horticultural items is changing in phenomenal ways.
Increments in per capita earnings, higher urbanization and the developing quantities of ladies
in the workforce incite more noteworthy interest for high-esteem items, handled items and
prepared arranged sustenance. A reasonable pattern exists towards diets that incorporate more
creature items, for example, fish, meat and dairy items, which thusly builds the interest for
food grains. There is additionally a developing utilization of horticultural items, especially
grains furthermore, oil crops, as bioenergy creation feedstock. Universal exchange and
interchanges are quickening changes popular, prompting merging of dietary examples and
additionally developing enthusiasm for ethnic nourishments from particular land areas.
The nature and degree of the changing structure of agro-food interest offer phenomenal open
doors for expansion and worth expansion in horticulture, especially in creating nations. As an
impression of changing customer request, the 1990s saw an enhancement of creation in
forming nations into non-conventional foods grown from the ground. The offer of creating
nations in world exchange of non-conventional foods grown from the ground has expanded

quickly in the later past. While the majority of these deals are in high-pay nations, the rates of
worldwide assembling esteem expansion for the primary agro-industry fabricating item
classifications produced by creating nations have almost multiplied in the most recent 25
years. Global food production highly contributes in disturbances in environment as resulting
in the application of chemical fertilizers and pest controlling agents, excessive exploitation of
sensitive natural ecosystems, the transportation of high-value foods (HVFs) over vast
geographical distances, the increasing attempts to genetically modify seeds, plants and even
animals and to patent life (Pritchard, 2013, pp. 485-752). Because of these processes, agrofood becomes a penetratingly delicate industry by rising the important question of who owns
nature. Without any doubt this industry becomes a battleground between producers and
consumers, producers and governments, producers and producers. Agro-food is one of the
highly regulated industry.

1.0. Agro-food production circuits

The circuit in the production of agro-food businesses are enormously speckled. In the case of
traditional merchandises, like grains, the circuit is comparatively modest and on the other
hand, for high value goods, the circuit is complex. Figure 1 exhibits the extremely complex
structure of the US chicken (broiler) manufacture circuit (Pritchard, 2013). This industry is
now progressively dominated by very huge cohesive manufacturers. The main advantage of
chicken production is that it enables the direction of chicken raising processes which are
related to inherent biological gaps. Continuous integration provides the best quality and
ensures food safety.

Figure 1: The Agro food Industries, source: (Dickens, 2011)

Figure 2 demonstrates the fresh fruit and vegetable production circuit among the
manufacturing countries of Kenya and Zimbabwe containing the purchaser markets of
Europe, predominantly UK. They put more emphasis on marketing and distribution functions
of agro food production circuits plus the governance and management (Ruben, 2015, pp. 485856). Fruit and vegetable are largely driven by large super markets rather than by any
supplier or producer itself. Figure 1 and 2 explains conservative agro-food production
circuits. Moreover it also includes some other production circuits as well. The quickened
development of agro-businesses in creating nations moreover postures dangers regarding
value, manageability and comprehensiveness. Where there is lopsided business sector power

in agro-food chains, esteem expansion and catch can be concentrated among one or a couple
chain members, to the impediment of the others. Agro-commercial ventures will be practical
just on the off chance that they are aggressive in terms of costs, costs, operational
efficiencies, item offers and other related parameters and just if the costs they can pay
agriculturists are profitable for those agriculturists. Building up and looking after intensity
constitute a specific test.

Figure 2: Market Segmentation, source: (Peter Wehrheim, 2011)

2.0. Global shifts in the agro-food industries

As shown in figure 1, circuit of chicken production is enormously difficult, agro-food
industry is extremely integrated (Ruben, 2015). Globally, this industry is controlled by 3 main
countries, Brazil, China and US. Figure 4 represent the world total account collected by these

countries. Recently, US maintained to become the worlds foremost exporter of chicken, but
now it has been surpassed by Brazil. In 1997, Brazils chicken exports were less than a third
those of the US. But production has taken off since 2000 growth averaged 230 per cent the
past two years and today Brazil controls 36 per cent of the world share and exports to 127
different countries.
Agro-food industry also includes fresh fruit and vegetable production which is heavily
determined worldwide. Figure 5 reflects the total contribution of fresh fruits and vegetables.
Brazil is by far the lowest producer of fresh fruits and vegetables by contributing 3.4 % in
total, US followed 4.5 %, India has lead over Brazil and US by 9% and china leads the
highest production by far with the world total of 38% (Dickens, 2011, pp. 427-985).
Moreover, the structure and design of trading fruits and vegetables have changed evidently
throughout the past two eras. Exports of fresh fruits and vegetables are considerably higher
than the exports of traditional products like, apple juices, canned pineapples and oranges etc.
Export of these traditional products are very low. It is clear that non-traditional goods grew
more quicker: Some commodities mangoes, frozen potatoes, single-strength orange and
apple juices, fresh mushrooms, garlic, sweet corn (prepared or preserved), and avocado
achieved, or were close to, double-digit growth rate in their exports.
Global trade of fresh fruits and vegetables is sturdily decentralized. Importers of this food
category does not include only North America and Europe along with Japan, they are
considerably exporters as well. These both districts have certain climate conditions which are
favourable to the production of some fruit and vegetables such as: the Mediterranean rim in
the case of Europe; Mexico and the Caribbean in the case of North America. Figure 6
reflects worlds 30 leading importers of fruits and vegetables along with their origins. From
the highest income countries of North America to the intra-regional trade flows, Japan and
Europe, the Southern Hemisphere countries have significant roles. Whereas the banana
producing countries accounts for their fresh fruit exports nearly 90% for their single product.
As compare to banana producing countries, the Southern Hemisphere countries have larger
number of exports for cumulative variety of products (Peter Wehrheim, 2011).

Figure 3: origin of imports of fruits and vegetables to the World 30Leading importers, source: (Ruben, 2015)

The Southern Hemisphere countries exported more than half of the fresh fruits for example
apples, grapes and lesser quantity of pears as well. Hemisphere countries have advantage to
increase their export portion because of the temperate-climate fruits. Southern hemisphere
countries export almost two-thirds of apple from New Zealand and Chile. Whereas these
countries, Chile and New Zealand are core suppliers of pears and grapes. Moreover, the
Southern hemisphere countries have one-third portion in total imports of fresh juices bought
by the worlds leading 30 importers (Ruben, 2015). They are major supplier of fresh juices.
Other countries like Argentina is the second largest exporting country of grape and apple
juices with 11% of the exports and whereas Brazil has exports of three-fourth portion from
the total juice regions export.

The trade in high-value products and its pattern of production, syndicates components of
regional local scales and global. Globally, Southern Hemisphere countries have advantage to
increase their export portion because of the temperate-climate fruits and because of this
emergence, it engenders long-distance trade flows. Areas like East Asia, Europe and North
America leads towards solid intra-regional trade flows of high-value goods and foods. These
areas are consist of outlandish production due to which it has led to strong flows. Local
production, often organic, has less contribution in Agro-food industry because of the
increasing concentration in alternative food networks.

3.0. Consumption
In history, people have to work hard and struggle to acquire some food to persist. Less
number of population in different places were found who enjoy and afford to sustain good
quality food. This case is still the same for millions of individual in underprivileged and rich
countries. As income has risen throughout the past years because of the economic growth, the
demand for food substantially increased. This fact might be actualized because of increasing
population in associated urbanization. It is measured that now, in developed countries, people
spend more income on food which is almost around one-tenth of their income in comparison
with 50-60 years ago proportion of one-third (Dickens, 2011, pp. 78-245).
This struggle and persistence for food as per income, leads the food production and its
consumption into more complex relationship. This relationship has been derived through
consumers choice that what they want to eat. This makes a very complex process.
Relationship between consumption and food production is highly affected by religion, ethical
position, and mix of taste, health concerns, lifestyle and culture. Food producers are striving
for innovation and good quality which manage to attract consumers and earn wealthy profits.
On the other hand, consumers are engaged in their self-developed agendas (McMichael,
2013).
East Asia, Europe and North America is consist of well-heeled buyer market. The important
point here is that, these areas have altering patterns of their consumption and demand, they
are not wholly consist of changing in food consumption. As the prosperity or wealth

Increased, it arouses the demand by consumers for high-quality food products. This demand
is reflected in big superstores where number of food products are available to satisfy

consumers needs. Food producers have greater influence over growth of new products for
example: the chilled convenience food market. It is reflected in the ever-changing dietary
fashions of the affluent in their search for the route to beauty and long life.
Moreover, there is confrontation which is increasing day by day by consumers for the
diversity of food products in supermarkets. This includes all traditional providers also who
sold fast food. Food production is under pressure by consumers to delocalize. For example:
Fresh supermarket food is predicated on a new nature-defying order where every
conceivable fruit and vegetable grown anywhere is available all the time PGST [permanent
global summertime] may look good, but in the name of consumer choice and public health
the irregularity and diversity that is part of the natural order has been eliminated, not to
benefit consumers but to fit the way our big food retailers like to do business. In essence, this
means sourcing vast quantities of easy-to-retail, long-shelf-life standard varieties, grown to
rigid size and cosmetic specifications, that can be supplied 365 days a year (OECD, 2012,
pp. 457-585).
They want to build food production as per their requirements and culture. Delocalization will
include reliability on local products and local sources. This resistances took place because of
the substantial combination between methods which are using in food production, either
ethically acceptable or unacceptable and anxiety for the environmental damages for
protection of foods developed. Recently, there has been substantial growth in agro-food
industry because of the movement in ethical consumer. For example: Some 7 million farmers
and workers in around 60 developing countries are now covered by the Fairtrade charitable
scheme, which pays a guaranteed price covering basic costs and a surplus to reinvest in
further development (Peter Wehrheim, 2011).

4.0. The role of the state

The role of state is very important and compulsory for the betterment of agro- food industries.
State laws are severely promoted, dynamically protected and extremely controlled for entire
economy and activities related to it.
4.1.

Promoting and protecting agro-food industries:

Promoting and protecting is one task that has been done by the state. Need of guarantee for
effective and secure food production and its supply is important for the welfare of citizens.
The role of state includes subsidizing of food products in order to minimize any harmful

results. Many countries are now developing strategies and policies to sustain and maintain the
effectiveness of quality in food production or agro-food industry. One another duty is to save
agro-food industry from external competition. In figure 8 many countries are mentioned who
are concerned with agricultural subsidies. For example, countries like Korea and japan have
adopted particular policies and strategies for the protection of their rice industry. This
example reflects great meanings of cultural significance and state roles in subsidizing food
sector and promoting strategies to secure it (Ruben, 2015).
4.2.

Regulating agro-food industries:

conflict

the major focus of trade

Government departments and agencies are responsible for the food safety. A primary
objective of this activity is to solve the issue in safety of food production. Different agencies
and government departments are involved in this operation and ensures food quality. For
example: Food and Rural Affairs, the Food Standards Agency, the US Department of
Agriculture and its Food and Drug Administration and the UK Department of Environment
(Pritchard, 2013).

5.0.

A new phenomenon: state land grabs

Future shortages of food and fuels is important fact to consider in agro-food industry. Food
producers have to manage goods and products daily to identify requirement for each material.
This might led to the delays if requirements did not measured properly. This fact leads to
several phenomenon in recent years. : land grabbing, is one of the example for recent
phenomena, which is supported by the state in foreign countries to take actions in order to
obtain agricultural land.
A 2009 report estimated that: An area half the size of Europes farmland was targeted in the
last six months at least 30m hectares is being acquired to grow food for countries such as
China and the Gulf states who cannot produce enough for their populations The land grab is
being blamed on wealthy countries with concerns about food security. Some of the largest
deals include South Koreas acquisition of 700,000 ha in Sudan, and Saudi Arabias purchase
of 500,000 ha in Tanzania. India has lent money to 80 companies to buy 350,000 ha in Africa.
At least six countries are known to have bought large landholdings in Sudan, one of the least
food-secure countries in the world. Other countries that have acquired land in the last year

include the Gulf States, Sweden, China and Libya. Those targeted include not only fertile
countries such as Brazil, Russia and Ukraine, but also poor countries like Cameroon,
Ethiopia, Madagascar and Zambia (Dickens, 2011, pp. 215-879)

6.0. Impact of FDI on agro-food industry

Significant increases in investment of agriculture in developing countries are required to
battle deficiency and ensure nutrition goals plus food safety. It is considered as most effective
strategy for decrease in poverty in rural areas. FDI has a great impact over any industry. Most
of all, it provides benefits to reduce hunger through different ways. Recently, food crisis
respond to the weakness that agricultural production was comparatively slow than escalating
prices. Notably, lower investment in agricultural sector in most developed countries replicates
lower competence and stagnant construction. This happened because of the food crises, this
industry faced recently.
Globally, it is measured that by the end of 2050, agriculture must feed projected population of
9 billion. That means more than 2.5 billion today. Moreover, population will grow faster in
those countries where hunger and poverty is widespread. Agro-food industry should meet
livestock production. It must become more concentrated to meet consumers rising demand.
Sustainability in crops and livestock production plays vital role in meeting demands. In US,
to meet the target of reducing poverty and hunger they are required additional investment of
$80 billion every year in agriculture (Ruben, 2015, pp. 123-245). These investments by
foreign and domestic investors can breed several benefits for example: increased food
availability, technology transfer, employment creation, access to capital and markets, poverty
reduction and higher productivity. Though, these mentioned benefits are not easy to obtain.
They are highly dependent to several factors of contract during investment. Factors include,
the linkages with smallholders, the institutional framework in place in the host country and
mainly the type of business.

7.0. Conclusion
In this study, the comprehensive critical analyses has been conducted of the food industry.
Different statistics have been included to demonstrate the extent on which the current global
patterns impacted or influenced by the nation-state. The quickened development of agrobusinesses in creating nations moreover postures dangers regarding value, manageability and

comprehensiveness. Where there is lopsided business sector power in agro-food chains,

esteem expansion and catch can be concentrated among one or a couple chain members, to
the impediment of the others. Agro-commercial ventures will be practical just on the off
chance that they are aggressive in terms of costs, costs, operational efficiencies, item offers
and other related parameters and just if the costs they can pay agriculturists are profitable for
those agriculturists. Building up and looking after intensity constitute a specific test.

References
Dickens, P., 2011. Global Shift. London: The Guilford Press.
McMichael, P., 2013. The Global Restructuring of Agro-food Systems. London: Kogan Pages.
OECD, 2012. The Future of Food Long-term Prospects for the Agro-food Sector: Longterm .... London : Willey.
Peter Wehrheim, 2011. Russias Agro-Food Sector: Towards Truly Functioning Markets.
London: Elsevier.
Pritchard, B., 2013. Cross-Continental Agro-Food Chains: Structures, Actors and Dynamics
in the .... London: Routledge.
Ruben, R., 2015. The Agro-Food Chains and Networks for Development. New York: Sage.

Ropes and livestock production plays vital role in meeting demands. In US, to meet the target
of