Theoretical foundations of circular business models in the agriculture sphere: classification, components, and functions

Abstract

The article is dedicated to the practical implications of circular business models in the agro-food sector, classifying their types and explaining their strategic components and functions. We explore resource models, design models, models of extending the product life cycle, platform models, product as a service, and end-of-life models of the product. We also delve into cascade processes, which are circular processes that involve the creation of reverse biological cycles and the use of biomass to produce products with a more significant share of added value. The importance of these models for preserving the value and duration of the life cycle of biological materials in closed agro-product networks is highlighted. We outline the architecture and strategic basis of business models in agri-food production based on three key components (value proposition, generation of social value, and management of social value). We substantiate a set of functions of circular business models of agro-food production, among which the function of preserving value, the function of extending the life cycle, the function of organization, the function of creating and maximizing additional value, and the function of maximizing income streams are highlighted. Circular business models in the agri-food sector should be considered a strategic tool for achieving sustainable development goals and ensuring business entities' economic sustainability. We substantiate that business models of a closed cycle are a promising and priority way of further socio-economic development, contribute to the solution of society's acute socio-economic and environmental problems, and ensure the creation of a basis for further economic development and growth. Keywords: models, functions, circular economy, business models of closed production, ensuring the sustainability of systems, agricultural enterprises.