MATSEC SEC Agribusiness key terms

The whole chain of commercial activities linked to farming, from supplying seed, feed and machinery, through production on the farm, to processing, transport, retailing and export of farm products.

The sequence of steps that turn a raw farm product into something a customer buys, showing who adds value at each stage and how the money is shared between them.

The extra worth created when a product is changed or presented better, such as turning milk into cheese or grading tomatoes into punnets, so it can be sold for more.

The planning, organising and controlling of a farm's land, labour, capital and livestock to meet the farmer's goals, usually profit, stability and care of the holding.

A single production activity on a farm that can be budgeted separately, such as a dairy herd, a tomato crop or a flock of laying hens.

A forecast of the income and costs of one farm enterprise for a season or year, used to judge whether that activity is worth continuing or expanding.

The money left from an enterprise after subtracting its variable costs from its output value; it shows how much each activity contributes towards covering the farm's fixed costs.

Costs that change with the level of production, such as seed, fertiliser, feed, casual labour and fuel for a particular crop or herd.

Costs a farm must pay whether it produces a little or a lot, such as land rent, insurance, machinery depreciation and interest on borrowed money.

The value of the best alternative given up when a resource is used one way, for example the rent lost by growing fodder instead of letting land out.

The level of output or price at which total revenue exactly equals total costs, so the business makes neither a profit nor a loss.

The timing of money actually coming into and leaving a business over a period; a farm can be profitable yet fail if cash arrives too late to pay bills.

The money available for the day-to-day running of the business, calculated as current assets such as stock and cash minus current liabilities such as short-term debts.

Borrowed money or goods supplied now and paid for later, which lets a farmer buy inputs before harvest income arrives but carries interest or charges.

The yearly fall in value of a durable asset such as a tractor or shed as it wears out or becomes outdated, treated as a cost in farm accounts.

The long-lasting resources invested in the farm, such as land, buildings, machinery and breeding stock, as distinct from money spent on a single season.

Spending now on assets or improvements, such as an irrigation system or a new shed, in the expectation of earning benefits over several future years.

The amount of product harvested or produced per unit of land, animal or input, for example tonnes of wheat per hectare or litres of milk per cow per year.

How much output is obtained from a given amount of input such as labour, land or capital; rising productivity means more is produced with the same resources.

Producing more from the same area of land by using more inputs, better technology or more frequent cropping, which raises output but can strain resources.

Growing different crops in a planned sequence on the same field over several seasons to control pests and diseases and maintain soil fertility and structure.

The capacity of soil to supply the nutrients and conditions that plants need, maintained through organic matter, fertiliser, rotation and careful cultivation.

Planning the type, amount and timing of fertiliser and manure applications so that crops get what they need while losses to water and air are minimised.

A combined approach to pests that uses monitoring, resistant varieties, cultivation, biological controls and, only when justified, carefully chosen pesticides.

The inherited ability of a pest population to survive doses of a pesticide that would once have killed it, developing when the same chemical is overused.

Over-enrichment of water with nutrients, usually nitrogen and phosphorus washed from farmland, causing excessive algae growth and loss of oxygen for fish.

Running an agricultural business so that it meets present needs without damaging the soil, water, biodiversity or community that future production depends on.

Costs or benefits of farming that fall on other people rather than on the farmer, such as polluted streams or attractive countryside created by the holding.

The total volume of water used, directly and indirectly, to produce a product, useful for comparing how efficiently different enterprises use a scarce resource.

Supplying water to crops artificially when rainfall is insufficient, through channels, sprinklers or drip lines, to protect yield and quality.

Dividing potential buyers into groups with similar needs or habits, such as restaurants, supermarkets and households, so that a product and price can suit each group.

The particular group of customers a farm business chooses to serve, whose needs guide decisions about what to produce, how to pack it and where to sell.

The four elements a business controls to sell its product: the product itself, its price, the place or channel it is sold through, and promotion to make buyers aware.

The activities used to inform and persuade buyers, including labelling, advertising, social media, farm open days, tastings and point-of-sale displays.

The difference between the price the consumer pays for a product and the price the farmer receives, covering transport, processing, packing, wholesale and retail costs.

A business owned and controlled by its farmer members, often set up to buy inputs in bulk or to collect, process and sell members' produce more strongly.

An arrangement where a farmer produces an agreed quantity and quality for a buyer who supplies inputs or technical advice and guarantees a price or market.

Identifying the threats a farm faces, such as drought, disease or price falls, and choosing ways to reduce, share or prepare for them.

Adding new products, services or markets to an existing farm business, such as farm stays or olive oil, to spread risk and use resources more fully.

Paying a regular premium to a company that agrees to cover specified losses, such as crop failure from hail or storm, in exchange for that protection.