1. Chapter 3

2. Organizational forms of enterprise
in the agribusiness industry
 Distinctive features of Agribusiness enterprises
 Tremendous variety in the kinds of businesses
 Vast number of agribusinesses
 Built around several million farm producers
 Infinite variety in size

3. Cont…
 Product differentiation is difficult
 Mostly family-oriented
 Community–oriented:
 Highly seasonal in nature in operations
 Deal with vagaries of nature
 Governmental programs and policies have direct impact
on them

4. The Organization of Agribusiness
1. The Sole proprietorship
 Advantages of sole proprietorship
 Ease and low cost of formation
 Control
 Freedom and promptness of action
 Business secrecy
 Single Tax
 Being your Own Boss

5. Cont…
 Disadvantages of sole proprietorship
 Unlimited Liability
 Limited Financial Resources
 Lacks Stability and Continuity
 Heavy Risk
 Difficulty in Operating/Managing the Business
 Long Hours

6. CONT…
1. The Partnership
 Advantages of Partnership
 Additional Financial Resources
 Better Credit
 Easy Formation
 Wider Expertise/Larger Talent Pool
 Risk Reduction
 Tax Benefits

7. Cont…
 Disadvantages of Partnership
 Unlimited Liability
 Risk of Implied Authority
 Interpersonal Conflicts
 Lack of Continuity
 Limited Resources
 Difficulty of Transferring Ownership

8. 3. The Corporation
 Is an artificial being, endowed by law with the powers,
rights, liabilities, and duties of a natural person.
 The Nature of the Corporation
 owners (shareholders) and the managers do not own anything
directly.
 Prefered stock and common stock

9. Cont…
Advantages of corporation
 Limited Liability
 Better Management
 Ease in transfer of ownership
 Stability
 Large Finances

10. Cont…
Disadvantages of Corporations
 Double Taxation
 Highly Regulated
 Lack of Secrecy
 Separation of Ownership and Control
 Expensive to Operate

11. The Cooperatives in Agribusiness
 Cooperatives play a major role in agribusiness.
 The purpose of cooperatives is to help farmers reduce
the prices paid for their inputs and to enhance their
output prices.

12. The objectives of Agricultural
Cooperatives
 Honest Market
 Increase in Income

13. Principles of Cooperatives
 Member Controlled, Member Owned
 One person, One vote
 Limited Return on Capital
 Operate at Cost