Agro-Industries

The many problems of poverty, low productivity, inadequate infrastructure and poorly integrated markets faced by developing countries are often exacerbated by an under-developed agro-industrial sector. Little attention has usually been paid to the value chain through which agricultural commodities and products reach the final consumers within the country and abroad. This neglect results in enormous potential losses of value added and employment opportunities. While high-income countries add US0 of value by processing one tonne of agricultural products, developing countries generate only US. Moreover, while 98 percent of agricultural production in high-income countries undergoes industrial processing, barely 30 percent is processed in developing countries. Yet, between 40 and 60 percent of manufacturing value added is generated by agro-processing industries in developing countries, and agro-industrial products are the major products exported from these countries, frequently accounting for half of all exports.

The process of globalization - involving global and regional economic integration driven by technological advances and trade liberalization and harmonization policies - presents both threats and opportunities for existing agro-based industries in developing countries and transition economies. The penetration of the market economy into formerly isolated and remote areas opens up opportunities for raising agricultural and agro-industrial productivity, but it also poses acute challenges, particularly for LDCs, where the agro-industrial sector faces increased competition and market volatility as a result. The same challenges are also faced by governments and support institutions, such as design and technology centres, professional associations, NGO's and private consultancy companies. They are required to make fundamental changes in policies, strategies, organizational linkages and the provision of skills to enable their agro-based industries to compete in the globalized markets, but often do not have the technical, human and information resources to be able to do so.

The services offered by the Agro-Industries service module comprise a range of technical assistance interventions and know-how, which encompass the following key areas:

• Support and advice to official and private-sector decision-making bodies in various sub-sectors (food, leather, textiles, wood and agro-machinery) on techno-economic development options for strengthening the agro-industrial sector and fostering the equitable integration of small-scale agro-based enterprises into market-oriented agro-produce systems.

• Capacity-building at the institutional and industry levels to enhance industrial productivity and marketing performance in the agro-industrial sector. Particular attention is given to strengthening the capacity of technical support institutions and/or professional associations, as well as the creation of design centres and demonstration units for basic and advanced technologies (tools and machinery, CAD/CAM, automation, etc.).
  
  
• Support to traditional agro-industries to improve their productivity and efficiency, increase their integration into global value chains, and support rural livelihood diversity. This is achieved through upgrading of technical skills, process optimization, diffusion of appropriate agro-engineering systems, product innovation/diversification, and the introduction of working methodologies and guidelines, etc. Special attention is given to marketing support, such as participation in trade fairs and missions, as a means of exposing the target beneficiaries to market requirements.
  
  
• Participation in the work of international organizations and normative bodies, the promotion of research on priority/novel commodities, the preparation of training manuals and tool kits for agro-processes/technologies, and the dissemination of agro-industrial information for decision-making.

The commodities covered by the service module include food as well as important agro-based fibre products (wood, textiles and leather). In addition, special emphasis is placed on the agro-machinery and agro-chemicals sub-sectors because of their essential underlying contribution to the development of agro-based industries. In all interventions, cross-cutting environmental and social issues such as gender (i.e., specific equipment for women) and HIV/AIDS (promotion of labour-saving technologies), are built into the activities of the service module.