Agribusiness environment is the situation in which agribusiness firm is operated. It is overall related to economic, social and political condition of the firm and country.

The environmental forces which affect the success of agribusiness are as follows:

A) Economic environment:

– A nation’s economic situation and economic growth represents the potential capacity of the firm to produce goods and services.

– Usually the most significant market opportunities exist among the industrialized nations as they have higher level of income, one of the basic ingredient for the formation of market.

– However the long run potential for the growth of market exist in developing nations as there is market unsaturation for many products.

B) Demographic environment:

– The size of the population have important implication both for the demand and supply of goods and services.

– Similarly economically active groups population determine the growth of the agribusiness firm and gender inclusion have important implication on its growth.

–  Different ethnic groups of the population represent different possible demands and preference.

– Similarly education level the marketing technique adopted by the enterprises.

C) Socio-cultural environment:

– It is important for marketers to learn about the customs and taboos, values and religious beliefs of different locality and community.

– The language differences have direct impact on the advertising campaign and product labels by the marketers.

– For ex: promotion of cereal products especially paddy is popular in Nepali culture whereas promotion of under exploited crop products (finger millet) is not much feasible.

D) Political/legal environment :

– The governmental policies and intervention such as taxation, subsidy and price control (ceiling price, floor price) affect the growth of agribusiness firm.

– The legal procedure of registration and need of trademarks, branding, labeling, patents, market communication, product safety, acceptability and environmental issues have direct impact on operation of agribusiness firms.

E) Technological environment :

– The level of technological advancement of a nation affect the establishment of business enterprises as well as type of it.

– The availability of trained personnel to operate machinery, transportation and distribution facilities, communication facilities through mass media, etc. affect the growth of agribusiness firm.