Synthesis Documents

Agro-Industries for Development, FAO, UNIDO and IFAD, 2009

    This book consists of a collection of readings that explore different elements of the broad issues associated with the development of agro-industries that are competitive, equitable and inclusive, with a focus on developing countries. The chapters were commissioned from a number of scholars and development practitioners by the Food and Agriculture Organization of the United Nations (FAO), the United Nations Industrial Development Organization (UNIDO) and the International Fund for Agricultural Development (IFAD) to form the core of the technical programme of the Global Agro-Industries Forum, organized by these three agencies in April 2008 in New Delhi, India.

    All six chapters of this publication address in one way or another the fundamental policy dilemma of agro-industries development: the need to establish and maintain competitiveness while also addressing the risks to smaller-scale economic actors. The authors of these chapters do not view policy support to agro- industries as a choice between competitiveness and developmental impacts, but rather see it as essential for enhancing both.

    Summary of results
    There are several messages about agro-industries development that cut across the chapters of this book. One is that governments clearly do have an important role to play. To enhance competitiveness, enabling policies and institutions must be put in place and infrastructure must be improved, particularly rural infrastructure. Recommendations on other specific priorities for establishing enabling environments are made by most of the authors.

    Another theme found in all the chapters is that agro-industry firms and value chain stakeholders must be ready to meet the challenges of changing consumer requirements and market competition. Priority attention should be given to consumer concerns and interests regarding quality, safety, health benefits, product origin and other attributes. To access higher-valued markets, capacity is needed to develop, distinguish and certify specific product traits.

    There is also a need to improve productivity and efficiency. Systematic attention is required to build capacity for acquiring and utilizing productivity- enhancing technologies. The capacity to introduce and apply advanced techniques for supply chain management and logistics will increasingly become a requirement for competitiveness of agro-industries targeting global and regional markets.

    An important theme is that value chains that include smaller-scale producers and processors can make good business sense. There nevertheless are many reasons why firms choose not to work with smaller-scale suppliers. To achieve objectives relating to economic growth and rural development, public and private sector initiatives are needed to strengthen business linkages and support the development of business models that include smaller-scale producers and processors. The development of inclusive business models requires, in turn, concerted efforts to organize smallholders and build the capacities of farmers to be reliable suppliers. Financial services and products that fit the specific conditions of producers, processors and others in the supply chain are also critical for achieving widespread developmental impacts.

    While the authors present a consistent and coherent overview of agroindustry drivers, trends, challenges and responses, all are careful to point out that there is great diversity in circumstances. There is a corresponding need to ensure that policies and strategies to improve competitiveness and developmental impacts are based on a solid understanding of broader market, consumer and technological trends, as well as the specific conditions of each country, agro-industry and agricultural value chain.