AGRICULTURAL COMPANIES: ADMINISTRATION, TYPES, EXAMPLES - DUDAS - 2025

Agricultural enterprises are defined as the sites where the establishment is used to raise animals, grow and harvest plants or compost, for sale to the general public, to retail businesses or wholesale establishments. Each agricultural company has different resource requirements.

These resources include land, labor, financial obligations, among others. These companies also have particular associated levels of risk and income potential. Joe Salatin, in his book You can farm, suggests developing a core agribusiness, around which income-generating businesses are built.

For example, broiler farming could be a central farm business, but pig, turkey, and egg farming could be secondary businesses working with the broiler business infrastructure.

Alternative agribusinesses can offer opportunities for those seeking to distinguish themselves from other producers. These businesses could include specialty fruits and vegetables, exotic flowers, honey, and a variety of field crops.

Administration

Production management

Why are some farmers in the same area more successful than others? Why do some survive hardships, such as poor harvests, while the same hardships force others to give up?

The reason is simple: some farmers run their agricultural business better than others. Some of the decisions that the farmer must make are the following:

- How much should be planted?

- What type of inventory should be kept and how many animals?

- What methods must be followed to cultivate correctly?

- Where and when should seeds, fertilizer, etc. be purchased?

- Where and when should the products be sold?

Financial management

The financial management of an agricultural company is as important as the production management. You cannot grow profitably unless you keep track of your expenses and income. Without records, an agricultural business is like a car without a steering wheel.

Are you making a profit or are you cultivating for a loss? If you are making a profit, you must decide what to do with the money.

- Should everything be saved?

- Should something be saved and the rest reinvested in the agricultural company, in order to expand it?

- Should you save something, reinvest something and keep enough money to buy the fertilizer for the next harvest or for better animal husbandry?

- How much should you pay yourself as a salary? You work for money and, therefore, you have to pay for the work you do.

- If you are growing at a loss, you should know why you are growing at a loss and what can be done to prevent it.

You cannot have the answers to all of these questions without record keeping; that is, without financial management.

Maintenance of accounting records

Each month, income and expenses must be recorded. Only at the end of the production season is it possible to get a true picture of the company as to whether it operated at a profit or loss.

For example, large expenses may have been incurred in April, while the crop has not yet been harvested until July, in order to earn an income.

You cannot tell whether it has been grown at a profit or loss until you compare all the expenses with the income for a full growing season.

Credit management

The cheapest way for a farmer to buy seeds, fertilizers, sprays, or animals is by paying cash. If you do not have enough cash on hand, you can apply to a government agency for a short-term agricultural production loan.

This loan must be repaid at the end of the production season; additionally, the interest on the loan must be paid. When the harvest is sold, it must:

- Pay the loan.

- Take the salary for the work that has been done in order to have enough to live.

- Save the rest to be able to buy seeds, fertilizers and sprays again for the next harvest to be sown, or to improve the quality of the animals.

Types

Independent companies

Independent companies are those that do not have a direct relationship with each other. An increase in the level of one does not help or hinder the level of the other.

In such cases, each product must be treated separately; for example, production of wheat and corn independently.

Joint ventures

Joint products are those that are produced together; for example, cotton and cottonseed, wheat and straw, etc. The quantity of one product determines the quantity of the other products.

Competitive companies

Competitive firms are those whose products compete for the use of the farmer's limited resources. Using these resources to produce more than is necessary in one product requires sacrificing the quantity of the other products.

When companies are competitive, three things determine the exact mix of products that would be most profitable for the company: the speed at which one product replaces another, the prices of the products, and the cost of producing the product.

Supplementary companies

Two products are said to be supplementary when an increase in the level of one does not negatively affect the production of the other, but rather adds to the total income of the farm.

For example, many small farms or a poultry business may be supplemental to the main farm businesses because they use surplus family labor with available accommodation, and perhaps even some food that would otherwise go to waste.

Complementary companies

Two products are complementary when transferring the inputs available for the production of one product to the production of another, results in an increase in the production of both products.

Real examples of agricultural companies in Latin America

Argentina

The Tejar

The largest agricultural group in America, it has become the world's largest producer of grains, mainly soybeans. It has almost 700,000 hectares cultivated in various South American countries, such as Brazil, Argentina and Paraguay. It was founded in 1987.

Cresud

Its agricultural production is essentially based on the cultivation of grains, sugar cane and oilseeds. Its main crops include soybeans, corn, wheat and sunflower. They also produce beef and milk.

Mexico

United Agroindustries of Mexico

They are responsible for the production and marketing of agricultural products such as coffee, tobacco, cotton, cocoa powder and sesame seeds. This company was founded in 1996.

Mexico mushrooms

This company is in charge of the cultivation, marketing, can packing and packaging of mushrooms, edible mushrooms, vegetables, seeds and sauces. It was founded in 1981.

Brazil

JD Group

It is among the world's largest producers of table grapes and livestock. In addition, it has more than 25 years of history in Brazil.

Chile

Agrícola Frutasol

It is dedicated to the production of fruits of excellent condition and flavor, such as apples, pears and kiwi.

References

1. Jeri Donnell (2011). Choose Your Agricultural Enterprise. Noble Research Institute. Taken from: noble.org.
2. Philip Diutlwileng (2006). Managing your Farming Enterprise. Library (PDF). Taken from: library.ufs.ac.za.
3. My Agriculture Information Bank (2018). Types of Enterprises. Taken from: agriinfo.in.
4. The Economist (2014). Farming without fields. Taken from: economist.com.
5. Kompass (2018). Companies - Seeds, agricultural and horticultural - Mexico. Taken from: mx.kompass.com.
6. JD Group (2018). About us. Taken from: grupojd.com.br.
7. Cresud (2018). Corporate profile. Taken from: cresud.com.ar.