AGRI 4: Agricultural Entrepreneurship Lecture Notes PDF

AGRI 4: INTRODUCTION TO AGRICULTURAL ENTREPRENEURSHIP AND ENTERPRISE DEVELOPMENT COURSE PREREQUISITE: GE ELECT 8, AGRI 25 COURSE CREDIT/UNITS & CONTACT HOURS/WEEK: 3 units; 3 hours per week SEMESTER OFFERED, ACADEMIC YEAR: Second Semester, A.Y. 2024 – 2025 COURSE DESCRIP...

AGRI 4: INTRODUCTION TO AGRICULTURAL ENTREPRENEURSHIP AND ENTERPRISE DEVELOPMENT COURSE PREREQUISITE: GE ELECT 8, AGRI 25 COURSE CREDIT/UNITS & CONTACT HOURS/WEEK: 3 units; 3 hours per week SEMESTER OFFERED, ACADEMIC YEAR: Second Semester, A.Y. 2024 – 2025 COURSE DESCRIPTION: Basic concepts related to starting and managing agricultural enterprises with focus on farming as business and role of farmers as entrepreneur; to include planning a business and preparing business plan Unit I: Introductory Concepts A. Entrepreneurship: What Does It Mean? Definition: Entrepreneurship is the process of designing, launching, and managing a new business. In agriculture, this includes creating ventures that enhance productivity, sustainability, and profitability (Chattejee, 2013). Act of initiating, creating, building and expanding an enterprise or organization, as well as building an entrepreneurial team and gathering other resources to exploit an opportunity in the marketplace for long term growth (Van Aardt et al., 2008) Creation of new businesses in conditions of risk and uncertainty in order to make a profit (Burger et al., 2005) What is a Business? In agriculture, a business can start as a small farm that grows vegetables and sells them at local markets or through an online store. This operation involves basic activities like planting, harvesting, and selling produce directly to consumers. Characteristics: Requires minimal procedures to start Focuses on generating income by selling products (e.g., fresh vegetables). Operated by the owner, possibly with a few family members or friends helping out. Business vs. Enterprise Feature Business Enterprise Sole proprietorships, Large corporations, Types partnerships, corporations conglomerates Size and Scale Can be small, medium, or large Typically, large Focused on specific Involves multiple business Scope products/services lines/projects Generate profit and sustain Innovation, social impact, Goals/Focus operations long-term growth More complex with multiple Complexity/Structure Generally simpler in structure stakeholders Transition to an Enterprise: To evolve this small farm into an agricultural enterprise, several key changes can be made: Expansion of Operations: Instead of just growing vegetables, the farm diversifies its offerings to include fruits, herbs, and dairy products, catering to a broader market. Formal Structure: The owner establishes a formal business structure, such as registering the farm as a corporation. This might involve hiring employees to manage different aspects of the operation, such as marketing, sales, and logistics. Regular Production and Sales: The farm begins producing crops on a larger scale, implementing seasonal planting to ensure a steady supply throughout the year. This regularity transforms the operation from a one-time business into a consistent enterprise. Investment in Technology: The enterprise invests in modern farming technologies (e.g., automated irrigation systems, drones for monitoring crops) to enhance productivity and efficiency. Marketing and Distribution Channels: The enterprise develops a strong online presence, utilizing e-commerce platforms to reach customers beyond local markets. It may also establish partnerships with grocery stores and restaurants for bulk sales. Sustainability Practices: The enterprise adopts sustainable farming practices, which can attract environmentally conscious consumers and potentially open up new revenue streams (e.g., organic certification). Key Elements: Innovation: Developing new agricultural techniques or products. For example: 1. introducing hydroponic systems for growing vegetables in urban areas. 2. Introducing rotational grazing for livestock Risk Management: Identifying potential risks such as pests or market fluctuations. For example: 1. A farmer might use integrated pest management (IPM) to mitigate crop losses. 2. Rotational grazing for livestock to improve pasture health and reduce feed costs. Why Engage in Entrepreneurship? Economic Growth: Agricultural entrepreneurs contribute to food security and rural development. For example, a farm that produces organic tomatoes can supply local restaurants, enhancing the local economy (Velasco & Rafael, 2017). Personal Fulfillment: Many entrepreneurs are passionate about agriculture. For instance, a beekeeper who starts a honey business may find joy in pollination and supporting local ecosystems. Financial Independence: Successful agricultural ventures can yield significant profits. For example, a poultry farmer who raises free-range chickens may sell eggs at a premium price, increasing profitability (Magretta, 2002). Social Impact: Entrepreneurs can address issues like food deserts by establishing urban farms. For instance, a community garden initiative can provide fresh produce to low-income neighborhoods. Types of Entrepreneurs Small Business Entrepreneurs: someone who starts and runs a small business, often in a local community Examples: 1. Local farmers selling produce at farmers' markets. For instance, a small rice farmer might sell organic rice and vegetables directly to consumers, fostering community connections and ensuring fair prices. 2. Backyard raisers of native pig/chickens selling to middlemen  Scalable Startups: Examples: 1. Agri-tech startups that develop apps for precision farming, such as a company that creates software for monitoring soil moisture levels to optimize irrigation. 2. Startups developing apps for livestock management, such as software for feed formulation (Brill Program for feed formulation). Social Entrepreneurs: Examples: 1. Organizations focusing on sustainable agricultural practices, such as a nonprofit that teaches permaculture techniques to local communities to improve food security. 2. Organizations promoting sustainable livestock practices. A nonprofit might train farmers in humane animal husbandry techniques, enhancing animal welfare and increasing market access for ethically raised livestock. Corporate Entrepreneurs (Intrapreneurs): Examples: 1. Employees within large agricultural firms who innovate new products, such as a team developing a new breed of disease-resistant rice to increase yields. 2. Employees in large agribusiness firms innovating new products. For instance, a team might develop a new feed formulation that enhances growth rates in poultry while reducing environmental impact. Characteristics of an Entrepreneur Risk-Taking: Agricultural entrepreneurs often face uncertainties. For example, a farmer may invest in a new variety of drought-resistant corn despite the risk of poor market reception. Visionary: Successful entrepreneurs foresee trends. For instance, a farmer who anticipates the growing demand for plant-based proteins might start growing chickpeas and lentils. Resilience: The ability to bounce back from setbacks is crucial. A dairy farmer may face a sudden drop in milk prices but can pivot to producing cheese or yogurt to maintain income (Velasco & Rafael, 2017). Adaptability: Entrepreneurs must adjust strategies based on market feedback. If consumers show a preference for organic products, a farmer may transition from conventional to organic farming practices. Entrepreneurs to Success Networking: Building relationships for support and opportunities. For example, a farmer might join a cooperative to share resources and knowledge about sustainable practices. Continuous Learning: Staying informed about industry trends. Attending agricultural fairs or workshops can enhance knowledge. For instance, learning about new pest control methods can improve crop yields (CLSU Syllabus). Strategic Planning: Developing clear business plans. A farmer might outline goals for expanding a pumpkin patch business, including marketing strategies for the fall season (Chattejee, 2013). Execution: Translating ideas into actionable steps. For example, a farmer may implement a crop rotation plan to improve soil health and increase productivity. References (1) Chattejee, S. (2013). Simple rules for designing business models. California Management Review, 55(2), 97-124. (2) CLSU. Syllabus for the Introduction to Agricultural Entrepreneurship and Enterprise Development. (3) Velasco, C.V. & Rafael, P.J. (2017). Introduction to Agricultural Entrepreneurship and Enterprise Development. Nueva Ecija: CLSU Printing Press. (4) Magretta, J. (2002). Why business models matter. Harvard Business Review, 74(6), 61- 78.