This chapter reinforces the case for agro-industries development. Drawing from an extensive range of statistical data and empirical research sources, the chapter characterizes the contributions of agro-industries to economic development worldwide. Contributions to manufacturing value addition and employment generation, are emphasized. It is argued however, that it is not possible to fully appreciate the importance and impacts of agro-industries because much of the value addition and employment is in the informal sector. This chapter identifies several structural factors in domestic and global markets that reinforce the importance of promoting agro-industries in developing countries. Data shows the increasing importance of processed agricultural products in agricultural trade, including in South-South trade and as a percentage of the food imports by developing countries. It is concluded that policies for agro-industry development should occupy a central position in government strategies. They caution though component of broader social policies that also aim at food and nutritional security.
This chapter discusses responsible business practices. The chapter focuses on the concept of corporate social responsibility (CSR): what CSR means and how it has evolved over the past decade. The main theme of the chapter is that CSR has become for many a core business strategy oriented towards competitive advantage, partnerships along the supply chain, institution building and long-term sustainability. Under this new perspective, CSR strategies have the potential to increase the inclusiveness and competitiveness of agro-industries, creating a more equitable distribution of benefits along the value chain. It is argued that various CSR codes and standards operating in agricultural value chains have helped to improve the quality, safety and traceability of food, but there is insufficient information to conclude that codes have improved environmental, social and economic conditions for producers. To the contrary, there is concern that the proliferation of standards and codes, as well as high implementation costs, can lead to the marginalization of small producers.
This chapter characterizes the processes of agro-industrialization in developing countries and builds a political case for agro-industries as a driver of growth and development. The case is developed around two main arguments. One cornerstone of their argument is that rapid changes in agrifood systems are shifting the basis for competitiveness. Increasingly, competitiveness is being determined by factors such as economies of scale, efficiencies in logistics, compliance with stringent grades and standards, and capacity to reach global markets with differentiated products. Countries that have achieved higher integration with global markets with high-value products, or countries with large high-value domestic markets, seem to have advanced the most in terms of the contribution of agriculture to economic development. The second argument relates to the pervasiveness of the impacts of agro-industries. They point to the key distributional consequences and discuss potential environmental consequences. The main message of the chapter is that countries must think and act strategically in order to cope with the challenges, starting with the important strategic choice on how countries and firms position themselves with respect to market competition. Policy makers need to define their roles vis-á-vis the private sector and need to establish effective public-private working relations.
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