Development of Agribusiness Enterprises - Asian Productivity ...

2. Supporting Production Automation and Utilizing Unskilled Labor
Supporting automation of production facilities could be one solution to manpower
problems. For example, local governments could provide “employment services for
housewives and aged labor” as a way of supplying stable and flexible labor resources. Local
community colleges also need to expand their food-related departments, in order to provide
adequate numbers of well-trained specialists.
3. Enhancing Business Management Ability
Few managers of rural food-processing enterprises have adequate expertise or
knowledge for the new business environment or long-term vision. This situation requires that
they be given more intensive and solid education covering, for example, changes in business
environment, tax, and financing. The forms of education may be flexible, taking into
consideration the schedules of managers, and could include correspondence courses, for
example.
Activation of Cooperative Marketing
Inactive sales are mainly the result of poor product quality. However, inactive sales
can also be due to a weak marketing infrastructure such as a low rate of brand-name
perception and a lack of individual sales networks. However, small processing enterprises
face limitations in building sales networks that can compete with large firms, due to capital
and labor shortages, and a lack of economies of scale. Therefore, the former needs to be able
to obtain benefits from economies of scale through cooperative marketing.
Cooperative marketing implies that two or more firms are cooperating in creating the
same product, services and ideas. They also cooperate in deciding on a price level and
sharing information, thus satisfying each firm’s business goals. Cooperative marketing
begins from the development of a common brand and extends to cooperative production,
sales networks, promotion and advertising.
To activate cooperative marketing, priority should be given to the efforts of the
participating enterprises. However, currently cooperative marketing is facing the problem
of a lack of business resources (capital, labor availability and management ability). Hence,
support from central and local government should be harmonized with the efforts of
cooperative marketing groups in order to encourage cooperative marketing.
Enhancing the Functions of Local Governments
Activation of rural processing factories implies activation of the local economy. This
requires local government or related institutions to prepare and implement appropriate plans.
It is recommended that local governments proceed with comprehensive plans in
accordance with local development, rather than following a uniform and rigid plan of the
central government. That is, responsibility for the supervision of rural food-processing
enterprises should be given to local government. The central government can then focus on
subsidizing the general business environment. In particular, it is recommended that the
Ministry of Agriculture and Forests establish a nationwide master plan for the planning,
installation and operation of processing facilities. The next step would be to specify local
plans for each province (local government level).
CONCLUSION
Because the major inputs of the food-processing industry are raw materials, the
industry needs to simultaneously expand in order to meet demand for agricultural products
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