1. 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. 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. 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. 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. 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. 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: