Development of Agribusiness Enterprises - Asian Productivity ...

Marketing: the Basic FO Activity
A primary objective is to build FOs up as important and effective marketing
organizations for fresh agricultural produce and agricultural food products by taking
advantage of existing marketing channels. SFOs and NAFAS are to undertake the roles of
wholesalers, manufacturers and exporters. The main strategies are to strengthen the linkages
among FOs as well as between FOs and the private sector.
Implementing a Savings and Loan Scheme
Since all FOs provide savings facilities and short-term production loans to their
members, FOA intends to strengthen this activity by setting up a scheme to ensure better
mobilization and management of members’ resources.
Encouraging Farmers Entrepreneurs
This strategy involves motivating individual farmer members and transforming them
into entrepreneurs who will undertake business activities in partnership with FOs as a means
of further commercializing agriculture and fulfilling the government objective of developing
a Bumiputra commercial and industrial community. FOs will concentrate on those members
who possess the traits necessary to succeed in business, have the potential to progress in the
production of agricultural produce and services, and have the inclination to work with FOs
to expand their business. The entrepreneurs’ activities need to have synergy with FO
activities, whether in production, processing, marketing, manufacturing or services, and are
to be undertaken as joint ventures. The strategy is aimed at:
(a) expanding and diversifying the business activities of members while encouraging them
to cooperate with FOs;
(b) undertaking entrepreneurship training in order to elevate the skills and expertise in
technical and managerial aspects; and
(c) establishing contacts with government and private agencies in order to increase the
business volume of the entrepreneurs and FOs. The setting up of franchises and
vendor manufacturing are possible options.
Improving FO Management Effectiveness
FOA has placed 65 percent of its professional staff in FOs to administer and manage
FO activities. The FOs’ own staff members are being given training with the objective of
upgrading their skills and expertise.
PROGRESS IN ACTIVITIES IMPLEMENTED
BY FARMERS’ ORGANIZATIONS
The AFO activities predominate in agribusiness ventures such as input supply,
marketing of agro-productions, development of government-alienated land, the provision of
production credit to members, and mechanization services. The SFOs are concentrating on
development, trading of farm inputs, marketing and general business. NAFAS business is
predominately concerned with fulfilling government contracts for fertilizer and poultry
supplies, land development, supplying agricultural machinery, etc.
Organizing farm production can be broadly categorized into two areas. The cultivation
of land along the lines of the estate concept is being carried out either on the FO land or on
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