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
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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 UNIDO’s 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 world’s 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. UNIDO’s 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. UNIDO’s 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:
