agro-industry trends ppt

7/23/2019 Agro-Industry Trends Ppt

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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

agro-industry trends ppt

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