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.).
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 scale. 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.
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 Bengal in India 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.
Commercial agriculture contains six key factors:
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.
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.
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.
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.
Wikimedia Foundation. 2010.
Look at other dictionaries:
Commercial — may refer to: Advertising, commercial messages Radio advertisement, via the medium of radio Television advertisement, via the medium of television Commerce, the voluntary exchange of goods, services, or both Trade, the trading of something of… … Wikipedia
Agriculture in Uganda — Uganda s favorable soil conditions and climate have contributed to the country s agricultural success. Most areas of Uganda have usually received plenty of rain. In some years, small areas of the southeast and southwest have averaged more than… … Wikipedia
Agriculture in Ethiopia — is the foundation of the country s economy, accounting for half of gross domestic product (GDP), 60% of exports, and 80% of total employment.Ethiopia s agriculture is plagued by periodic drought, soil degradation caused by overgrazing,… … Wikipedia
Commercial sorghum — refers to the cultivation and commercial exploitation of species of grasses within the genus Sorghum (often S. bicolor). These plants are used for grain, fibre and fodder. The plants are cultivated in warmer climates worldwide. Commercial Sorghum … Wikipedia
COMMERCIAL (DROIT) — Le droit commercial est une branche du droit privé qui, par dérogation au droit civil, réglemente de manière spécifique certaines activités de production, de distribution et de services. Il englobe à la fois le commerce au sens courant du terme,… … Encyclopédie Universelle
Agriculture in Saskatchewan — is the production of various food, feed, or fiber commodities to fulfill domestic and international human and animal sustenance needs. The newest agricultural economy to be developed in renewable biofuel production or agricultural biomass which… … Wikipedia
Agriculture in Ghana — Agriculture is Ghana s most important economic sector, employing more than half the population on a formal and informal basis and accounting for almost half of GDP and export earnings. The country produces a variety of crops in various climatic… … Wikipedia
Agriculture En Grèce Antique — L olivier, l une des bases de l agriculture grecque ici à Carystos en Eubée. L’agriculture est le fondement de la vie économique en Grèce antique. Par la mise en valeur intensive d un terroir restreint, malgré un outillage et une terre… … Wikipédia en Français
Agriculture dans la Grèce antique — Agriculture en Grèce antique L olivier, l une des bases de l agriculture grecque ici à Carystos en Eubée. L’agriculture est le fondement de la vie économique en Grèce antique. Par la mise en valeur intensive d un terroir restreint, malgré un… … Wikipédia en Français
Agriculture in Cambodia — Agriculture, accounting for 90 percent of GDP in 1985 and employing approximately 80 percent of the work force, is the traditional mainstay of the Cambodian economy. Rice, the staple food, continued to be the principal commodity in this sector.… … Wikipedia