The last part of the equation is analagous to the r of the exponential growth equation. When N is small, r approaches rmax. Natural selection for fitness occurs. The limitation doesn't have to be food. This is another way to view population growth.
Individuals compete for the same resources.
As competition becomes severe, r-declines. There may be negative effects when population sizes are too small. In many cases, there are some advantages to numbers. At low density, yield depends on the number of plants present. Above a certain density, however, the yield tends to be constant.