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7/23/2019 Agro-Industry Trends Ppt
1/13
Definition of agro-industry: post-harvest activitiesinvolved in the transformation, preservation and
preparation of agricultural production for
intermediary or final consumption (with emphasison food)
Whether looked at from exports (esp. non-traditionals) or domestic market (populationgrowth/urbanization) agro-industry fundamentalto income and employment creation indeveloping countries
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In an extended definition agri-processingranges from 20-35% of developing countryGDP. The entire food-system may account foras much as 50% of developing country GDP.
The agribusiness to agriculture ratio increases
with development (0.6, 2.0 and 3.3 using WDRtypology) and is highly correlated with HDI.
Year*
Agriculture
Share of
GDP**(1)
Agribusiness
Share of
GDP**(2)
Ratio
(2)/(1)
% Agro-
processing
sector in GDP*
% Food-processing
and beverages in
total manufacturing*
Agriculture-based Countries 0.39 0.22 0.57 0.050 0.468
Transforming Countries 0.16 0.32 1.98 0.040 0.224
Urbanized Countries 0.08 0.27 3.32 0.060 0.203
United States 0.01 0.13 13.00 - -
LICs 0.043 0.32
LMICs 0.055 0.20
UMICs 0.051 0.20Note: (*) UNIDO Industrial Statistics Database 2005 for agro-processing data with respective year.
Agribusiness combines the value added for agro-related industries and that of agricultural trade and distribution.
Unweighted averages consider all information available in each column.
Note: (**) Source on Jaffee et al (2003) for agriculture and agribusiness share of GDP.
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0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Human Development Index - HDI
Agribusiness-to-Agriculture Ratio
Higher correlation for low HDI countries
Mostly Agriculture-based
countries
United States
Mostly Urbanized
countries
Source of data: Jaff ee et al (2003) and Human Development Statistics (UN)
Employment statistics fragile. ILO estimates forformal sector and countries with officialstatistics around 22 million.
Informality levels estimated at an average of60%.
Increasing levels of female participation (50->80% in non-traditional sector).
Agro-industry (extended definition) importantfactor in rural non-farm employment and keystimulus for agriculture.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Low-income Lower-middle-income Upper-middle-income
Food & Beverages Tobacco Textiles
Leather products and footwear Paper, wood and paper products Rubber and Plastic products
Based on: UNIDO Industrial Statistics Database 2005.
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
High-income Upper-middle-income Lower-middle-income Low-income
Processed meat, fish, fruit, vegs & fats Bakery, macaroni, chocolate and others Dairy Grains
Based on: UNIDO Industrial Statistics Database 2005.
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Food &
Beverages*
Tobacco
Products*Textiles*
Wood
Products*
Paper and
Paper
Products*
Rubber and
Plastic
Products*
Total
Manufacturing*
Agricultural
Productivity**
LICs 5.280 25.270 2.437 3.716 4.737 5.865 5.020 344
LMICs 11.644 56.968 5.597 4.627 15.021 7.270 10.337 2.107
UMICs 21.753 169.130 13.787 11.836 27.761 19.056 23.529 5.126
Note: (*) UNIDO Industrial Statistics Database 2005 for agro-processing data with respective year, in current US$.
Note: (**) Source on WDR (2008), data for 2001-2003, US$ 2000 prices.
Processed meet, fish,
fruit, vegs & fatsDairy Grains
Others: bakery,
macaroni, chocolate...
Food
Processing
Sector
LIC 3830 9418 6388 4395 4937
LMI 15941 21090 15587 10605 15083
UMI 18023 21855 29308 17919 18296
HIC 46675 71439 87569 61433 55408
Based on the UNIDO Industrial Statistics Database 2005
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80% of global food and beverage sales areprocessed products 60% of which areconsumed in high income countries
However growth in processed foodconsumption fastest in developing countries: 2-3% for HICs but 7% in UMICs, 28% in LMICs
and 13% in LICs annually between 1996-2002
Shift in diet composition and towardsconvenience foods higher levels of sugars,fats and oils (health implications)
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Source: Gehlhar and Regmi (2005), based on Euromonitor
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Oils & FatsBreakfast
cerals
Ready
mealsDried food Dairy products
LICs 11,6% 56,3% 11,0% 14,4% 11,4%
LMICs 8,1% 12,3% 10,1% 10,9% 9,7%
UMICs 7,4% 9,7% 7,9% 8,3% 6,7%
HICs 0,2% 3,3% 4,7% 1,8% 2,9%
Source: Gehlhar and Regmi (2005), based on the Euromonitor, 2003.
Average annual grow th rate (1998-2003)
Developing countries maintain same globalagri-market share as in the 1980s (36% -Aksoy, 2005) but trade composition haschanged dramatically.
However, small share of traded processedproducts in total food sales (10%) points toimportance of FDI which has grown much fasterthan trade in last two decades
Growing South-South trade and FDI butthese are highly heterogeneous
Trade, FDI or Global Value Chains (GVCs) ?
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1980-1981 1990-1991 2000-2001 1980-1981 1990-1991 2000-2001
To developing countries 13,4% 10,5% 13,7% 18,9% 14,5% 15,6%
To industrial countries 24,3% 22,4% 22,4% 43,4% 52,5% 48,3%
Total 37,8% 33,0% 36,1% 62,0% 67,0% 63,9%
Source: Aksoy (2005), based on COMTRADE.
Developing countries Industrial countries
1980-1981 1990-1991 2000-20011980-
1981
1990-
1991
2000-
2001
1980-
1981
1990-
1991
2000-
2001
Tropical products 39,2 24,4 18,9 11,6 10,3 9,3 22 14,9 12,7
Temperate products 28,8 27,5 28,1 56,9 46,8 44,2 46,3 40,4 38,3
Seafood, fruits, and vegetables 21,6 38,2 41 18,7 25,5 25,4 19,8 29,7 31
Other processed products 10,4 9,9 12,1 12,8 17,5 21,2 11,9 15 17,9
Total 100 100 100 100 100 100 100 100 100Source: Aksoy (2005), based on COMTRADE.
Developing countries exports Industrial countries exports World exports
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SMEs crucial for employment and regionaldevelopment and contribute significant shareto total value added
SMEs present in activities which escape theeffects of scale and the demands of quality(informal sector)
SMEs also in new niche markets, integratedinto GVCs, or organized into clusters
Opportunities for SMEs in artisan and originmarkets
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From commodity to quality markets
Between upgrading and race to the
bottom
Radical changes in dynamics of traditionalexports
Non-traditional exports: problems of access
Increasing importance of commercialfarm/wage (female) labour model
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Transformation in domestic markets ofdeveloping countries and impact of FDI
Key role of informal sector from primaryproducer to catering
Opportunities for consolidating subsistencecrops as components of new urban diet
Centrality of capacity building both for Stateapparatus and private actors
South-South trade, cooperation and FDIflows
New dynamic of commodity markets
Biofuels and new South-North trade
New types of investors and new types ofinvestment
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Energy: unprecedented expansion of large-
scale wage labour farming and increased
opportunities for low input farming systems.
Global Warming: agricultural researchpriorities of developed countries may benefit
developing countries
Institutional/regulatory climate: unacceptably
slow but inexorable shift to post-commodity
farming scenario in developed countries
Long term perspective of food price rises
increases importance of promoting domestic
agri-food systems