1. Foreword For centuries, agriculture has driven economic
growth in countries across the globe, and developing nations are
following the same path out of poverty. With agriculture accounting
for large employment, it is likely to drive world's economic growth
for years to come. Small- holder farmers will be the backbone of
that effort. New and evolving markets hold the promise of greater
profits for smallholder farmers. Feeding the rapidly growing urban
population will require more and higher quality agricultural
commodities. Urban consumers will also increase demand for
processed agricultural products, so adding value to farmers outputs
will take centre stage in years to come. This will provide
lucrative opportunities not just for the women and men who grow the
food, but for a wide range of rural workers, especially the
emerging generation of young people. A key first step in exploiting
these opportunities is recognizing smallholder farms as
agribusinesses, regardless of their size or scale. Unfortunately,
too many small agribusinesses in developing countries are neither
productive nor profitable. There are two significant reasons why
they remain trapped in a cycle of subsistence. First, their yields
are too low to generate marketable surpluses, because they lack
access to modern technology and productive assets. Second, farmers
cannot get their produce to markets, because of the lack of roads
and linkages between farm-level production and downstream
activities, such as processing and marketing. UNIDO brought
together some of the best minds in the field to analyse what is
needed for agribusiness to serve as the path for rural people
prosperity. Their thinking led to the findings and recommendations
covered in these pages. The article identifies seven pillars of
agribusiness development, the actions needed to transform
subsistence agriculture into productive agribusiness: enhance
productivity, upgrade value chains, exploit demand, strengthen
technology, promote innovative sources of financing, stimulate
private sector participation, and improve infrastructure and access
to energy. Building on these pillars, it lays out an agenda for
action and a practical framework to guide efforts by the entire
range of stake- holders. I believe we need to spark an agribusiness
and agro-industrial revolution for the benefit of rural areas. Such
a revolution will bring sustained investment in the entire
agribusiness value chain, which, in turn, will raise productivity
and yields, improve competitiveness and increase profits. By
implementing the
2. thoughtful, practical ideas reported in this report, we can
indeed use agribusiness to create prosperity for Rural people and
that means prosperity for the women and men who feed the entire
world people. What is agribusiness? Agribusiness is a broad concept
that covers input suppliers, agro-processors, traders, exporters
and retailers. Agribusiness provides inputs to farmers and connects
them to consumers through the financing, handling, processing,
storage, transportation, marketing and distribution of
agro-industry products. Status of agro-value chains in present
scenario When we look the broader picture, 98% of agricultural
production in high-income countries undergoes industrial
processing, in developing countries, barely 30% is processed. Yet,
agro-processing industries in developing countries generate 40%-
60% of manufacturing value added and agro- industrial products
account for as much as half of their total products. UNIDO provides
a variety of technical cooperation activities to assist developing
countries in adding value to the output of their agricultural
sector and generate increased employment opportunities for rural
communities, thereby increasing food security and sustainably
reducing poverty. High income countries Developing countries 0 50
100 150 200 250 Column B
IncomeofcountriesinUS$byprocessingonetonneofagriculturalproducts
3. Through its technical assistance, UNIDO links resources and
markets in the agribusiness value chains and strengthens forward
and backward industrial linkages in order to leg up the economic
transformation of countries, improve employment and income
opportunities, and reinforce sustainable livelihoods. Activities
benefit a number of groups, including poor and marginalized rural
populations, urban agro- industries and communities facing human
security challenges or requiring urgent supplies of agricultural
equipment and the rehabilitation of food industries. Technical
cooperation and capacity-building services are provided to
agro-based and agro-related businesses and industries, in the food,
leather, textiles, wood and agricultural equipment sectors. UNIDO
promotes investment in agribusiness and value chain development;
builds partnerships and linkages with strategic financing
institutions; organizes various global forums and expert group
meetings in related fields; and publishes specialized training
manuals, guides and electronic media. To carry out its mandate in
this area, UNIDO mobilizes expert services such as cluster
development, conformity with quality and standards, rural energy,
environmental management and cleaner production. It is no longer
hidden that agriculture- related industries are often labour-
intensive and recruit much of their workforce from the most
vulnerable population groups. Improving the performance of these
industries can therefore have a direct positive impact on job
creation and human security:- Textiles: If better work can be done
in this sector, it can result to very large contribution in
country's GDP. A strong production base of a wide range of
fibre/yarn from natural fibres like cotton/jute, silk and wool to
synthetic/man-made fibres like polyester, viscose, nylon and
acrylic. Increased penetration of organised retail, favourable
demographics and rising income levels to drive textile demand.
Leather Industries: UNIDO has been dealing with specific problems
of the leather industry since its early year. Initially, the main
focuses of UNIDOs interventions were hides and skins improvement,
tannery operations upgrade, and establishment and strengthening of
leather development centres. Later, the footwear and leather
products industries of developing countries gained increasing
attention, and technical assistance. September 2012, During the
All-China Leather Exhibition in Sanghai played a very crucial role
in the footwear industry. Recently, US$2 billion announcement from
China's Hua Jian Industrial Holdings, will play a impactful role in
creating more than a lakh job in Ethiopia over the next years.
4. Forest products: Meant to be employement as well as income
generation sector. The following branch is encouraging Forest
licensing schemes, plantation projects, waste reduction and with
that utilization of production of waste and by-products. The recent
case of getting support from UNIDO The cane and Bamboo Technology
Centre of Assam is in its way to upgrade regions traditonal bamboo
industry. Agro- machinery: It meant to help blacksmiths and
labourers to provide and maintain standardized equipment and meets
local needs. It helps around 3000 households in rural communities
revitalize agricultural productivity by replacing manual
traditional methods. Food- technology: Food technology refers to
food- processing centres. Taking a live example in Kenya people are
coming to demonstrate that how small soybean- processing plants can
popularize the consumption of nutritious soybean based foods. This
particular project is funded by Japan- funded project. These things
shows that how globally countries are coming under umbrella to work
out for better tomorrow. 3ADI: The goal of the 3ADI is to have an
agriculture sector in Africa which consists of highly productive
and profitable agricultural value chains.To accelerate the
development of the agribusiness and agro-industries sectors in
Africa, 3ADI supports an investment programme that will
significantly increase the proportion of agricultural produce in
Africa that is transformed into differentiated high- value
products. The initiative highlights the critical role of
agribusinesses in the process of economic development, food
security and sustainable reduction of poverty and hunger especially
for the worlds poorest countries. Food security: UNIDO works with
development agencies to find innovative solutions to challenges
facing the food industries of its client countries. One particular
area of focus is the development of value chains and investment in
agribusiness to enhance productive capacities and reduce
post-harvest losses. Biotechnology: The cleaner industrial
processes that biotechnology can support are important in all key
industrial sectors, including food, textiles, leather, wood and
energy. Cleaner industrial processes through the application of
biotechnology also help to reduce negative environmental impacts
that might otherwise occur. Through international cooperation and
technology transfer, industrial biotechnology has a valuable role
in supporting the International Conventions . Rural enterprises:
Small scale food- crop agriculture, fishery, pastoral animal
husbandry, wage labour on plantations and ranches. These are the
few things rural people depends on. In order to create a
5. susstainable livelihood for these people, UNIDO promotes
growth strategies based on diversification in rural economies.
Human security: Within the framework of a special UNIDO initiative
targeting countries and regions emerging from a crisis situation.
UNIDOs approach is therefore to provide training on how to tap
market potential, attract small investments and financing, and
improve technical, business and management skills of entrepreneurs.
Entrepreneurs are to be assisted in finding ways to increase
productivity and improve product quality standards to meet market
demand on a continuous basis. More specifically, UNIDO assists in
building up a pool of innovative professional skills in technical
sectors and establish competitive thinking among entrepreneurs to
facilitate the production and marketing. Women in business:
Creative industries:
6. susstainable livelihood for these people, UNIDO promotes
growth strategies based on diversification in rural economies.
Human security: Within the framework of a special UNIDO initiative
targeting countries and regions emerging from a crisis situation.
UNIDOs approach is therefore to provide training on how to tap
market potential, attract small investments and financing, and
improve technical, business and management skills of entrepreneurs.
Entrepreneurs are to be assisted in finding ways to increase
productivity and improve product quality standards to meet market
demand on a continuous basis. More specifically, UNIDO assists in
building up a pool of innovative professional skills in technical
sectors and establish competitive thinking among entrepreneurs to
facilitate the production and marketing. Women in business:
Creative industries: