Development of Agribusiness Enterprises - Asian Productivity ...

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production of onions, potatoes, mung beans and lentils also increased, which helped to maintain stable prices of those essential food items. Agricultural credit amounting to PRs.27,912,600 was disbursed between July 1999 and March 2000 compared with PRs.30,652,000 during the corresponding period of 1998/1999, representing a decline of 8.9 percent. The decline was mainly due to lower demand for production loans. The fertilizer offtake during 1999/2000 was 2,818,000 nutrient tons, compared with 2,595,000 nutrient tons in 1998/1999, representing an increase of 8 percent. Agribusiness/Enterprises 1. Current Status The term “agribusiness” is normally defined to include the three functions of supply of farm inputs, farm production, and marketing and processing of farm products. Given the dominance of agriculture in the economy of Pakistan, there is enormous scope for the development of agribusiness and agro-industries. This situation is reinforced by the facts that agriculture and agribusiness products account for 80 percent of the country’s total export earnings and that the sector supplies many of the major industries with raw materials in addition to consuming 33 percent of the output of finished industrial goods. Thus, the agribusiness and agro-industry subsectors have the potential for: (a) improving agricultural productivity, both qualitatively and quantitatively; (b) generating employment, particularly in the rural areas; and (c) creating a viable export base through development of forward and backward linkages with the farm production system. 2. Problems The sector is, however, faced with many physical, policy and financial constraints. The lack of infrastructure in rural areas, particularly power, gas and water supplies, communications and roads, have hampered efforts to achieve a major positive impact on industrial dispersal. Public sector dominance of agro-industry has discouraged private sector growth in key agribusiness areas, i.e., the production of industries of fertilizer, farm machinery, edible oil and feed. Promotion Policy Realizing that the involvement of the private sector is essential to rapid industrial development, the government reviewed its policies and deregulated agribusinesses such as sugar, fertilizer and farm chemicals, farm machinery and implements, seed production, edible oils, fruit and vegetable processing, and animal and poultry feed. The current government policy is designed to encourage foreign investment in industrial projects. The government supports the development of small-scale industries, which encompasses a wide spectrum of agriculturally-related businesses. At the same time, it has simplified the investment promotion program, sanctioning procedures, location policy, taxation policies, and incentives. AGRO-INDUSTRIES AND AGRIBUSINESS IN PAKISTAN Pakistan has a large number of large-scale agro-industries including: C textile industry – 442 textile mills C jute industry – 12 jute mills C fertilizer industry – 10 fertilizer units - 138 -
C sugar industry – 78 sugar mills C vegetable ghee industry – 166 units. Performance of Large-scale Agro-industries The performance of manufacturing in general, and large-scale manufacturing in particular, appears weak as recent data show their growth was only 1.6 percent and 0.04 percent, respectively. However, their performance is, in fact, not too bad. The apparent weak performance is mainly due to a 24-percent decline in sugar production. Excluding sugar, large-scale manufacturing grew by 6.4 percent in 2000 compared with 3.5 percent in 1999. In fact, the performance of large-scale manufacturing, excluding sugar, has been by far the best in the past five years. Agro-food Industry The following industries are considered to be agro-food processing industries: C Agriculture C Horticulture C Cattle and sheep farming, and the production and processing of meat, milk, and related dairy products C Processing, canning, packing, grading, and preservation of fruit and vegetables C Inland farming and the preservation of fish, particularly in waterlogged and saline areas C The production and multiplication of high-yielding seed varieties C Edible oil extraction C Poultry farming, processing and feed production C Cattle feed production C Milk processing. PERFORMANCE OF THE SMALL-SCALE MANUFACTURING SECTOR A recent Federal Bureau of Statistics survey showed that since 1997/98 the growth of small-scale manufacturing had declined from 8.4 percent to 5.3 percent. Almost all investment in small-scale manufacturing has come from the private sector. Importance of Small-scale Industries It is generally recognized that economic growth of the developing countries crucially depends on development of small- and medium-sized enterprises (SMEs). They provide employment at lesser cost and their capital requirements is also low. They provide 80 percent of employment in manufacturing sector and generate one fourth of the export earnings. POLICY MEASURES FOR THE PROMOTION OF SMALL-SCALE AGRIBUSINESSES The growth of small-scale industries is mainly hampered by the non-availability of credit facilities. Realizing this constraint, in 2000 the government established a Micro Credit Bank for facilitating and promoting agribusiness. The Small and Medium Enterprises Development Authority (SMEDA), which was established in 1998, was also reorganized to provide technical assistance to potential small investors. In addition to the Agriculture Development Bank of Pakistan, the National Development Finance Corporation (NDFC), Regional Development Finance Corporation (RDFC) and commercial banks are also - 139 -
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From: Development of Agribusiness E
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Report of the APO Seminar on Develo
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FOREWORD Modern agricultural techno
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SUMMARY OF FINDINGS INTRODUCTION Th
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Policies and Programs for Promoting
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Governments should not be undertaki
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crops (i.e., non-traditional crops/
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Financing/Credit Inadequacy of fina
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the State Industrial Bank of Indone
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1. AGRIBUSINESS DEVELOPMENT IN ASIA
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US$ million 8,000 Percent 100 7,000
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Introduction of high-yielding varie
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2. Agriculture and Agro-industry Th
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60 50 40 30 20 10 0 60 50 40 30 20
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(27,213) (119,378) Japan U.S.A. (57
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supply balance, conserve resources,
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2. POLICIES AND PROGRAMS FOR PROMOT
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Table 1. World Markets for Agricult
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Japan requires that imported agricu
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High Transportation Costs Shipping
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competitive markets, improving and
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terminals in some cities, which wil
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3. REQUISITES FOR INITIATING AGRIBU
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Diversification of production will
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Those manufacturers who use substan
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STRATEGY FOR AGRIBUSINESS VENTURES
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4. MARKETING PROMOTION OF AGRIBUSIN
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of inefficiency. Coordinating the f
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such an undertaken can be a very us
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Improving Productivity/Management o
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Tools for a Purpose Simplistically
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4. Know Who You Are and Who You are
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5. Falling in Love with Technology
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ensure a pool of leaders for future
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1. BANGLADESH INTRODUCTION - 69 - A
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sector before any imports are allow
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C An inadequacy of appropriate tech
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now constitute 88 percent of frozen
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Second, the contribution of agricul
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During 1995-99, some commodities in
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Indonesia imported only a few commo
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Product Quality This issue has beco
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agribusiness sector attempts to rec
Page 87 and 88: 3. ISLAMIC REPUBLIC OF IRAN INTRODU
Page 89 and 90: Food Processing Plants Food process
Page 91 and 92: denied. That creates economic imbal
Page 93 and 94: construction (11.6 percent), and th
Page 95 and 96: 2. Operational Conditions This sect
Page 97 and 98: - 97 - Table 5. Present Situation o
Page 99 and 100: (b) When recommended by manufacture
Page 101 and 102: 2. Supporting Production Automation
Page 103 and 104: Kang, S. K., 1994. “The State and
Page 105 and 106: 5. MALAYSIA INTRODUCTION - 105 - Ab
Page 107 and 108: ROLES OF THE FARMERS’ ORGANIZATIO
Page 109 and 110: (e) warehousing facilities to assis
Page 111 and 112: land leased out by farmers to FOs.
Page 113 and 114: Cooperation between the government
Page 115 and 116: Department of Agriculture, 1994. Cr
Page 117 and 118: 6. MONGOLIA INTRODUCTION - 117 - En
Page 119 and 120: Agricultural extension differs from
Page 121 and 122: C streamline the mechanism of long-
Page 123 and 124: 7. NEPAL INTRODUCTION - 123 - Arjun
Page 125 and 126: usiness orientation to the agricult
Page 127 and 128: * First eight months only. AGRIBUSI
Page 129 and 130: C directly to wholesale markets or
Page 131 and 132: dalmoth/chips, ketchup/squash/jam,
Page 133 and 134: Inadequate Infrastructure Storage f
Page 135 and 136: Technical and credit support is bei
Page 137: 8. PAKISTAN INTRODUCTION - 137 - Ma
Page 141 and 142: - 141 - Table 1. Ongoing Agreements
Page 143 and 144: 9. PHILIPPINES INTRODUCTION - 143 -
Page 145 and 146: Continuation Item 1995 1996 1997 19
Page 147 and 148: Seventh was seaweed and carrageenan
Page 149 and 150: Development of Irrigation Systems O
Page 151 and 152: Trade and Investment Missions An in
Page 153 and 154: Executive Order 133 (Tariff Exempti
Page 155 and 156: Table 1. Contribution of Difference
Page 157 and 158: Table 5. Overall Export Performance
Page 159 and 160: The number of registered agro-indus
Page 161 and 162: extrusion cooked products. This typ
Page 163 and 164: technical transfer loans to enable
Page 165 and 166: C The formation of an organization
Page 167 and 168: Table 1. Cultivated Area, Yield, Pr
Page 169 and 170: substitution, export requirements a
Page 171 and 172: and prepare for global climate chan
Page 173 and 174: Major Factors Contributing to the S
Page 175 and 176: 12. VIETNAM - 175 - Nguyen Thi Thuy
Page 177 and 178: The equipment used in processing te
Page 179 and 180: percent of the raw materials are su
Page 181 and 182: Strategic Solutions for Achieving S
Page 183 and 184: APO Seminar on Development of Agrib
Page 185 and 186: Vietnam Ms. Nguyen Thi Thuy Senior
Page 187 and 188: Asian Productivity Organization Hir
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