PESTEL Analysis of Agricultural Industry
Political factors impact the agricultural sector in factors relating to regulation, distribution, and consumption of foods in a given country. Government policies and imposed regulations have a direct effect on nutritional choices that a consumer makes, and this, in turn, affects the agriculture market (KPMG, 2012). For example, policies governing food prices or the amount of information that a consumer will receive affects the choice of the consumer. Food regulation and safety measures implemented influence the supply of food products, and ultimately determines the market choice for consumers (KPMG, 2012). Economic factors have a direct effect on the agricultural industry. On one hand, the input cost such as the price of seeds, fertilizers, and cost of labor affect the productivity of the industry. The economic status of a country also affects the industry’s productivity. For example, in developing countries, the agricultural sector is less developed owing to limited resource input and poor infrastructure (KPMG, 2012).
Social factors that affect the industry include rural-urban migration, negative perception of the sector, consumption and buying patterns (preference for organically grown foods), and limited earning potential especially in the rural areas (KPMG, 2012). These factors impact negatively on the industry and in many industrialized nations, other industries such as technology have taken huge strides to the benefit of
The National Agro-Food policy has incorporated strategies that are in line with the nutritional aspects of the food system. The programs implemented under the policy include increased food production through optimization and sustainable land, development and upgrading agriculture infrastructure and increase the quality and safety of food by expanding the compliance of standard. Efforts have also been taken to strengthen human capital and to ensure sufficient skill labor force in the agricultural sector. This includes the use of modern technology and mechanization to reduce the dependency of manpower. The government also provides sector-based incentives to encourage the private sector to invest in the agriculture and agro-based industry.
Besides the environmental factors, another point would be that small farms benefit greatly when consumers buy locally grown foods. Small, locally owned farms
The demographic, economic and the socio-cultural segments would be the most relevant segments to Whole Foods Market. These segments have a direct impact on the profitability, sustainability and survivability of Whole Foods Market, and the organic food industry. The relevance of the demographic segment stems from the fact that the age structure, income distribution and population size are important factors which will influence the demand for organic products. The economic segment is relevant, as an affluent population will continue to drive and sustain demand for organic products. The socio-cultural segment is another relevant segment, where attitudes about quality of life,
There are two types of social factors that can affect a business; there is external affects and internal affects. Internal affects are about demographics and lifestyle whereas external is about social costs and benefits
There is a market trend of supply and demand in an economy and this is measured through the equilibrium process and the actors that affect supply and demand. The farmers are the market suppliers and hence they determine their produce by measuring the equilibrium market prices and quantities. The suppliers are aware that when the prices of commodity increases the demand of the same commodity decrease and when demand increases supply decreases until the market reaches an equilibrium point. There are various factors that affect
Although I am not from a farm, I think I am still closely related to agriculture since my major is nutrition. As a nutrition major, it is important to know the chemistry of food and plants, the growing places of crops in the United States, the way farmer grow the crops, the benefits and risks behind organic crops, the benefits and risks of GMO and the potential food safety problems associated to pathogens, pesticides, toxicity. Besides, knowing how much crop grown and crop prices can give me a more complete picture on nutrition. Since food costs and availability influences people’s food choices and their nutrient intake. For example, the high costs for vegetables is one of the reason that causes obesity problem in the United States. Besides, one of my aunt is currently living in China, she owned a farmland and grow crops such as sweet potatoes, choy sum for her family.
Local farmers tend to be more expensive than big corporation produce due to lack of economies of scale and due to the traditional ways of farming which is less efficient thus cornering some farmers to give up in the face of bigger competition. These few corporations that now control the market have benefitted from economies of scale and made it much harder for new entrants to compete since they use technological advances to stay efficient and mass produce so they can sell at cheaper price. All this said, shows that the agribusiness is evolving and making great use of technology whether it’s to increase yield or make perfect produce. But have we stopped and thought about our
Astyk and Newton, in their essay: The Rich Get Richer, the Poor Go Hungry, explains that “around the world, industrial agriculture has consolidated land ownership into the hands of smaller and smaller populations” destroying local self-sufficiency (518). Individuals are no longer able to grow own fresh, healthy foods to feed their family. They now depend on industrially grown crops and processed foods loaded with chemicals for food. Additionally, because of the farm policy, farmers that continue to cultivate healthy produce like fruits and vegetables get little or no government support, thus the higher prices of fresh produce seen today at our grocery stores.
Supply and demand are the rulers of price in the capitalist economy of the United States, and farm goods rely on these factors as much as any other commodity. The demand for food remains relatively stable although slightly increasing year to year, but the supply fluctuates greatly depending on
producers as well as the fact that individual farmers are simply too insignificant to affect an
There are a number of factors that impact food distribution, such as level of income, wealth and the distribution of equity, the rise of fuel costs, international relations, government subsidies, regulations and policies, to name a few.
occasionally shopped in corner stores throughout New Brunswick to pick up a few basic necessities. While shopping, I noticed some fruits and vegetables being sold including potatoes, onions, yams, avocados, apples, bananas, and oranges. There is usually a large selection of canned goods, but rarely any fresh, leafy-greens. Food choices are severely limited, and many food deserts contain an overabundance of fast food chains selling cheap, overly processed foods that are high in fat, sugar and salt. Researchers from the University of Connecticut’s Rudd Center for Food Policy and Obesity published a study in the International Journal of Environmental Research and Public Health that compared the obesity rate of the United States to their ratio
In light of this, I would like to explore research frontiers in the area of the challenges of managing food and farm businesses in a global setting of the 21st Century. In our society beleaguered by agricultural problems that ranges from economic to environmental problems such as weather and global warming, issues concerning trade and management of agricultural enterprises has been the topic of debate for the past decade. Many developing/poor countries who earn their living from agriculture continuously suffer from poverty and hunger as a result of the increasing pressures on the world's resource base. Policymakers are gripped with finding solutions to problems such as structural and technological constraints, inappropriate domestic policies and an unfavourable external economic environment. As a result, the growth of these economies has been slow, undernourishment has been increasing and the marginalization of these countries in the global economy has continued. This trend has created problems for developing countries over the past decade. Economic and financial
Associated British Foods PLC is a British multinational food processing and retailing company which was founded in the year 1935 by a Canadian named Willard Garfield Weston and from that date the rest is history. (Grace’s Guide, 2016).
When considering the challenges and opportunities posed by EU non market policies, we must look at both the food producer and the manufacturer as both can have positive and negative reactions. Going forward, global warming is now high on the agenda of policy makers. With agriculture a high contributor, it is unsurprising that measures are being introduced that have effect on the producers’ and manufacturers’. The buzz word now associated with the future of the environment and the food industry is “sustainability”. This refers to sustainable growth as the producers (farmers) try to maximise output. Moreover, with world populations set to dramatically increase up to 2050, the EU and the world must find ways to promote food production. Therefore, policies are now becoming more difficult and multifunctional. This is symbolised through the increasing awareness of the environment and it becoming more and more apparent in the Common Agricultural Policy (CAP). “The industry realises the need to protect and, where possible, improve biodiversity. Given that the industry’s raw materials are grown in the natural environment, and the industry purchases and processes 70% of EU agricultural production, it is essential that agricultural practices are sustainable.” FoodDrink Europe. (2011). It is here in the CAP that I have found non-market policies to have impacted both positively and, at times, negatively on the food producers and manufacturers operating in the EU. The