Contemporary agriculture is increasingly confronted with challenges related to sustainability, adaptation to complex environments, and innovation development; challenges that can no longer be addressed solely through technological interventions or formal policy measures. In many agricultural systems, the core problem is not the lack of knowledge or innovation, but weaknesses in the absorption, internalization, interpretation, and application of new knowledge within organizational structures and operational processes. Drawing on the Viable System Model (VSM) as a cybernetic framework, this article reconceptualizes absorptive capacity as a mechanism for the emergence and institutionalization of innovation in agricultural systems. This study adopts a qualitative approach and is conducted through a case study of the Farijan Agro-Industrial Complex. Thematic analysis was employed for data analysis, while the Perez Rios diagnostic approach was used to operationalize the VSM framework. In addition, selected analytical considerations derived from the VIPLAN approach and Jackson’s checklist were used to address stakeholder interactions and structural pathologies. The findings indicate that absorptive capacity functions as a distributed mechanism across organizational subsystems and plays an important role in transforming external knowledge into operational and structural innovation. The results further show that the Viable System Model, through strengthening communication flows, recursive learning, and alignment across organizational levels, provides a suitable foundation for enhancing absorptive capacity and sustaining innovation in agricultural systems. This study argues that innovation in agriculture is fundamentally a systemic phenomenon that depends less on technological interventions and more on organizational architecture and knowledge capabilities for institutionalizing innovation.