Current trends in Management of Agribusiness in the 21st century with respect to technology and their effects on Globalization

By Christine Owondo

e-mail - ch_owondo@yahoo.com
Box 50685 – 00100
Nairobi -Kenya
Date - 17th May, 2012

Q1. Discuss the current trends in management of Agribusiness in the 21st century with respect to technology and its effects on Globalization.

The 21st century has widely been referred to as the “technology era”, largely due to changing trends in technology. New developments in agribusiness have emerged which have entirely transformed, not only the agricultural sector but the entire business environment. These include areas such as management and leadership, technology, changes in the environmental factors – ecological factors and the like.

Traditionally management was viewed as an insignificant part of the organizational structure. Decision makers in the 21st century are more aware of the need to utilize resources more efficiently, both Human and non-human. In both cases there has been an improvement from the old to current. In management Managers had adopted a dictatorial rather autoritarian kind of leadership to achieve goals, mainly preferring a top down approach to work, resulting in high staff turnover and employee dissatisfaction. Decision making was less participatory. In the 21st century, the tall structure has been flattened so that bureaucracy is reduced. There is a more participatory approach to management where communication is both vertical and horizontal. Currently a number of organizations are adapting a bottom up approach while ensuring that decisions making is participatory. The human resource was viewed as a burden and an extra cost to the organization whereas today it is viewed as an investment for the purpose of achieving both individual and organizational goals. Traditionally managers have shown a reluctance to change but the 21st century has adopted the concept of stimulating change for the growth of the organizations and adopting innovations.

Women were not even considered as players let alone equal players in organizational development. Thanks be to those leaders who embraced change. Most government policies across the globe have adopted policies that are gender friendly. That is why in today's organizations, issues of gender -affirmative action are of utmost importance. The early personnel management was less flexible with poorly managed planning of human resources and employment conditions. Workers received more punitive corrective measures as opposed to team building, backstopping and the development of the employee in general. Policies are being made with reference to these changes. Today, there are carrier development systems and strategic staffing so that the human resource is like any other resource to be used efficiently. Keeping and maintaining staff is necessary and that is why managers need to understand the Human resource behaviors and attitudes. Managers should be visionary and strategic, those who communicate in such a manner that they will attract commitment from employees. They should be democratic and embrace reward systems in the organizations. They should think of organizations as learning institutions where employees can have a chance to develop themselves in light of the company development. Business models introduced in the 21st century have resulted in elements such as multiple plant entrepreneurs and product managers are now moving into franchise, work contracting. Managers in the 21st century should be equipped with good Communication and interpersonal skills, they should have Ethical and/or spiritual orientation – that is, to act with integrity, ability to manage change — diversity, and ability to motivate, analytic and problem solving skills. They should have a global perspective and be decisive — quick to act precisely. These attributes coupled with non human technological changes have brought about positive changes in agribusiness management. Although the foregoing paragraphs may not necessarily be of technological tangible attributes, the developments contribute to changing values and affect globalization at large.

Another area that has gone through tremendous transformation in technological changes is on information technology. Increasing global connectivity has increased efficiency in global markets. Traditionally information was relayed through such means as postage, rail, road and other conventional methods. This was time consuming, making it extremely difficult to attain efficiency necessary to maximize productivity. In the 21st century, organizations have become more efficient and effective owing to information technology. A chief executive can manage a company from say UNEP Nairobi and manage stations in Addis Ababa, Lusaka, Johannesburg and so on through e-management. Middle level managers also need not be at a specific location. For as long as they have the right equipment they can operate from anywhere, any time. The world over, accessibility to information is instant, with information of all types and on all subjects. People making ground-level observations can communicate them directly to others either around the globe or in a small room, while in an urban neighborhood or in rural Kogelo village. The current efficiency of networking levels largely owes their high degree of efficiency to Information technology such as the internet, U-tube, Skype, and others. A farmer can produce here in Kangemi market while targeting buyers in Vancouver - Canada. The effect has generated a wide range of interactions in global security selling and global sourcing. All these facets of information technology have turned the world into a global village

Talking Book is a technology designed to assist farmers with relevant information towards improvement of their farming systems. This is one way of technology transfer that has worked to improve the livelihoods of impoverished families through comprehensive programs that provide on-demand access to locally relevant knowledge. Talking Book – an innovative low-cost audio computer designed for the learning needs of illiterate populations living in the poorest areas in the world. In Kenya this can be likened to the vernacular radio programs as well as the Short Message programs that have been designed to transfer price information to rural farmers. These are simple and actionable instructional messages that are repeatable and can be played when needed enable people to learn and adopt new practices to fight poverty and disease. This is another innovation that is practiced world wide. All these have led to improved agribusiness management.

Computer feeding technology, is where farm animals are fed using a computerized system. Animal feeds are weighed using computers measurements. In this case, there is full resource utilization, and time management. Efficiency is attained by making feeding less laborious. The introduction of smarter machines and equipment such as farm machinery, computer technology, and other processing machines make it easier and save on costs. It is therefore possible to expand capacity of agribusiness. The sequencing of these machines and operations such as processing increased the production capacity of most organizations.

Another prominent feature of agribusiness is its continuous pursuit of new technologies. Well-known examples include the use of satellite-based global positioning systems (GPS) to closely manage crop lands and computer systems to manage various parts of the business. These technologies boost agricultural efficiency by reducing wasted resources, saving time, and improving output.

In agribusiness, markets are now more sophisticated due to the competitive nature of their operations.. Perfect competition, oligopolistic and monopolistic markets Commodity differentiation and degree of processing will determine the firm’s ability to remain relevant in the markets. Agribusiness organizations will therefore only remain in business depending on their ability to maintain uniqueness and ensure that the differentiated characteristic is not duplicated elsewhere. They must therefore continuously and constantly change in both the choice of technology and choice of differentiated products and or differentiated characteristics. This has resulted in the need for research for new technologies for value added products. Value addition technologies such as packaging, product processing from raw form to preprocessed products, mixtures of blends to add taste, and storage facilities to attract future favorable prices all come to play. The need for value added products has also sparked the need for industrialization where products can be produced raw in Kenya and be processed in America. Kenyan tea for example may go through another process to give it value as high as ten times its original value. Although this part of the globalization process may lead to product exploitation by industrialized countries it provides avenue for better products.

Industrialization is therefore another factor in technology development. What used to be the traditional manual labor in agribusiness has been replaced by the emergence of highly industrialized machines. Farm machinery such as the combine harvesters, planters, spraying machines, values addition machines, milking machines, animal feed mixing machines, farm produce transporting trucks, have brought about a transformation in agribusiness. Acres and acres of land can be ploughed in a few hours. Planting can take place in equally short period, and harvesting as well. Transporting bulk farm produce has been made simple by coming up with transport systems that are well designed for the produce.

Another technology in agribusiness is the use of hydroponics and airoponics to increase productivity. In the previous century it was almost impossible to imagine a crop propagated in air or in water without the soil media, but currently through globalization the hydroponic technologies have reached Africa, precisely Kenya where farmers are able to plant in water systems through piped flow of nutrients and circulated back into the systems. Although this technology is highly mechanized and may not be adoptable to small holder producers it is appropriate in urban and Peri-Urban agriculture where green buildings with flat rooftops are an alternative source of farm land. The airoponic technology is picking in some parts of America but due o globalization it is a matter of a few years and the technology will be here in Africa.
Biofuel is a form of energy source from plant biomass. Biomass is a renewable energy source from biological material from living or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel. Biofuel is mainly used in Asia, Europe and America and is currently expanding across the globe. Plant sources that can be used to produce biofuel include species such as zanthroper, Eucalyptus, sugarcane, palm oil, forest wood, and others. Biofuel is an alternative form of energy that can be used to drive farm machinery in curent agribusines. For example chaff cutter for nappier grass chopping can be driven by biofuel. In Kenya for example the use of biogas is rising by the day. Almost all types of plant materials and even animal waste is used to produce biogas. One challenge on this technology has been as to how to convert the gas into liquid form for storage. Research has come up with biofuel driven machines such as bicycles and combines harvesters. With this alternative source of technology the farm’s business costs are likely to cut down by a big margin. Although this fuel production may not be large enough to drive most of the farm machinery it provides for a big proportion of the farms energy thus improving efficiency in agribusiness.
Advanced irrigation scheduling is a form of technology where systems of soil sensors are monitored through a wireless broad network and powered by solar panels, allowing for farmers to monitor soil conditions on a daily or hourly basis to selectively target areas for irrigation. This type of scheduling has been seen to improve farm profits due to scheduling programs. If a farmer is able to schedule then that means that he can target the planting time to coincide with harvesting when there is scarcity at harvesting and hence high prices for the produce. Globally this is what future prices are pegged upon.
Green house technology has been gradually gaining prominence in Kenya. It is one technology is gradually changing landscapes in most farm families. The technology was introduced in Kenya a few years ago and gaining prominence, particularly in urban and Peri-Urban agriculture. This is particularly so because of the small land parcels. Green house technology is a technology where plants are propagated in a media that is controlled, protected from extreme weather conditions such as sunlight and pest and disease infestation. The size of the green house may vary depending on affordability. Traditionally production was pegged to a per acre unit of measure, the green House technology is producing almost ten (10) times as much revenue from what would be produced from one tenth of an acre.

Genetically Modified Organisms (GMO), stands for Deoxyribonucleic Acid. This is a technology that refers to a plant such as cotton or maize that has had its genetic information altered through genetic engineering. In essence it is process that has been practiced for long by farmers through seed selection and by scientists through controlled breeding – plant breeders. It involves modifying the DNA of plants to produce an insecticidal protein that confers to resistance to insect pests such as the stem borer. Or the golden rice which has been modified by adding several new genes that provide for B-carotene and hence enriched in vitamin A, which is rich in preventing loss of human site. When a plant are resistant to diseases and pests then GMO is useful in reducing costs required in agribusiness to control pests and related substances thus increasing productivity. The technology has been widely adopted in developed countries but resisted in some developing countries. It is however clear that the GMO crop is not substantially different in appearance, taste or nutritional value. Most countries who have adopted this technology have increased their production levels by significant margins.

Livestock breeding and Genetics - Livestock science technologies have been a driver of change in the livestock industry historically, domestication and the use of conventional livestock breeding techniques have been largely responsible for the increases in yield of livestock products that have been observed over the years. Cross breeding for example has brought about high yields in goat rearing, poultry and other livestock. To improve the farm’s existing stock selection of good genetic traits within the stock is practiced among small scale producers. Cross breed is mainly practiced in large farms commercially produced whereas. Both selection and cross breeding are aimed at obtaining a single or multiple traits that are useful in agribusiness to provide for higher yields and consequently high profit margins. Rates of change have been achieved in practice over the last few decades in poultry and pig breeding schemes in several countries and in dairy cattle breeding programs in countries such as the USA, Canada and New Zealand. Traits have been moved across countries by use of artificial insemination to gain breeds of higher values to new environments.

Organic Agriculture Technology - Consumers are more aware of the need for healthy foods. With growing incomes people are able to purchase more and better foods stuff. Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Approximately 37,000,000 hectares are organically farmed across the globe. The technologies used are mainly to enhance food safety. The demand for organically farmed products is rising at an alarming rate for obvious reasons of reducing health risks. Take for example in Nairobi, waste disposal particularly of industrial and medical nature are not well managed and end up in our rivers which are source of farming water. Heavy metals in turn are not cleaned and as a result become sources of disease. Organic agriculture at household level partly answers to some of these problems

In conclusion, successful strategies in the 21st century include; developing a strategic direction to management, adopting to new technologies, cost control measures, networking, managing risks, and finally having the right attitude by thinking like a chief executive. The globe as whole has become a one stop industry.