Development of Agribusiness Enterprises - Asian Productivity ...

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US$ million 8,000 Percent 100 7,000 Agricultural value 90 6,000 5,000 Share of agriculture in exports 80 70 60 4,000 50 3,000 40 2,000 30 20 1,000 10 0 0 1969- 1974- 1979- 1987 1988 1989 1990 1991 1992 1993 71 76 81 (ave.) (ave.) (ave.) Source: FAO, 1995. Figure 1. Share of Agricultural Products in Total Export Value Introduction of commercial production strongly influenced agricultural production by impacting socio-economic conditions, particularly marketing factors. With regard to trade between countries in the region, the following factors exert a strong influence on domestic agriculture in each country: C A comparative economic advantage will decide the nature and extent of export products. When the market expands internationally, land is increasingly developed and agriculture production may change in terms of area, farming system or degree of intensification. C Because of changes in people’s preferences and rise in living standards, demand for farm products is affected. That, in turn, leads to a further change in agricultural production. C Prices of farm inputs (especially labor wages), plus institutional factors such as trade restrictions and taxation, influence production. C At present, people are much concerned with the prevention of pollution, energy saving, conservation of the environment, food safety, etc. They are paying increasing attention to sustainable agriculture or less use of agrochemicals. The social concepts and value systems concerning agriculture and food are becoming more serious, requiring governments to change laws and policies. Policy direction should emphasize environmental protection and food safety. One prominent feature of Southeast Asian agriculture is small-sized family farming operations. In 1969-71, the average farm size in the region was 0.86 ha in Indonesia, 2.21 ha in Malaysia, 0.93 ha in the Philippines and 1 ha in Thailand, while in 1993, the average farm size was 0.88 ha, 2.19 ha, 0.86 ha and 1.08 ha, respectively. Thus, no significant change occurred between 1969 and 1993. However, the national structure of agriculture changed in terms of production size, pattern and intensity. - 20 -
Introduction of high-yielding varieties (HYVs) of rice led to the “Green Revolution” in late 1960s. The introduction of HYVs, greatly increased use of fertilizers and other agrochemicals as well as the reform of agricultural laws, which resulted in increased production (except for Thailand) and stable crop production within the region. Up to the mid-1970s, the use of HYVs reached 41 percent, 36 percent and 62 percent of the area under rice cultivation in Indonesia, west Malaysia and the Philippines, respectively. In Thailand, the area under HYVs during the same period was only 6.5 percent. In the 1970s, due to increased rice exports by Thailand, and increased investment in agricultural development and land improvement for rubber and oil palm in Malaysia, agricultural production in those countries recorded expansion with an annual agricultural growth rate of 2-3 percent with 50-60 percent of the population engaged in agriculture. Increase in production during 1970s was attributed partially to diversification of agricultural crops and livestock expansion. AGRICULTURAL SITUATION OF SELECTED COUNTRIES The relationship of agriculture to other sectors in the national economies of Indonesia, Malaysia, the Philippines and Thailand, as well as a brief outline of trade, are described below. Indonesia 1. Economy The economic development of Indonesia began in 1969 with the full implementation of the first Five-Year Plan. At that time, per capita income was an estimated US$70. In 1996, per capita income exceeded US$1,000, which was one remarkable result of development undertaken during the 25 years that elapsed from the first to the fifth plan (1969-94). The average yearly per capita growth was 6.7 percent. But the average yearly growth of the agriculture sector was limited to 3.6 percent during that period. The GDP composition ratio clearly showed that the proportion of industry increased from 8 percent in 1969 to 23 percent in 1994 while agriculture, forestry and fisheries decreased from 47 to 17 percent. The trend towards industrialization accelerated from 1980 and, by 1991, the relative shares of agriculture and industry had been reversed. 2. Agriculture and Agro-industry The devaluation of the rupiah in 1986 greatly increased the export levels of plantation products and processed goods. In addition, the export competitiveness of the food processing industry increased. By the 1990s, the major proportion of exported agricultural products comprised estate-produced palm oil, rubber, tea and cocoa. From 1985, the share of palm oil, coffee and cocoa accounted for an increased share of small-scale farming products. Many types of cottage industries or small-scale businesses were created for the sake of rural development, in order to absorb the abundant labor supply. However, many unemployed workers were unable to find jobs because of their low skills level, poor supplies of raw materials, inadequate infrastructure, etc. - 21 -
Page 1 and 2: From: Development of Agribusiness E
Page 3 and 4: Report of the APO Seminar on Develo
Page 5 and 6: FOREWORD Modern agricultural techno
Page 7 and 8: SUMMARY OF FINDINGS INTRODUCTION Th
Page 9 and 10: Policies and Programs for Promoting
Page 11 and 12: Governments should not be undertaki
Page 13 and 14: crops (i.e., non-traditional crops/
Page 15 and 16: Financing/Credit Inadequacy of fina
Page 17 and 18: the State Industrial Bank of Indone
Page 19 and 20: 1. AGRIBUSINESS DEVELOPMENT IN ASIA
Page 21: US$ million 8,000 Percent 100 7,000
Page 25 and 26: 2. Agriculture and Agro-industry Th
Page 27 and 28: 60 50 40 30 20 10 0 60 50 40 30 20
Page 29 and 30: (27,213) (119,378) Japan U.S.A. (57
Page 31 and 32: supply balance, conserve resources,
Page 33 and 34: 2. POLICIES AND PROGRAMS FOR PROMOT
Page 35 and 36: Table 1. World Markets for Agricult
Page 37 and 38: Japan requires that imported agricu
Page 39 and 40: High Transportation Costs Shipping
Page 41 and 42: competitive markets, improving and
Page 43 and 44: terminals in some cities, which wil
Page 45 and 46: 3. REQUISITES FOR INITIATING AGRIBU
Page 47 and 48: Diversification of production will
Page 49 and 50: Those manufacturers who use substan
Page 51 and 52: STRATEGY FOR AGRIBUSINESS VENTURES
Page 53 and 54: 4. MARKETING PROMOTION OF AGRIBUSIN
Page 55 and 56: of inefficiency. Coordinating the f
Page 57 and 58: such an undertaken can be a very us
Page 59 and 60: Improving Productivity/Management o
Page 61 and 62: Tools for a Purpose Simplistically
Page 63 and 64: 4. Know Who You Are and Who You are
Page 65 and 66: 5. Falling in Love with Technology
Page 67 and 68: ensure a pool of leaders for future
Page 69 and 70: 1. BANGLADESH INTRODUCTION - 69 - A
Page 71 and 72: 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
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3. ISLAMIC REPUBLIC OF IRAN INTRODU
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Food Processing Plants Food process
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denied. That creates economic imbal
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construction (11.6 percent), and th
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2. Operational Conditions This sect
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- 97 - Table 5. Present Situation o
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(b) When recommended by manufacture
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2. Supporting Production Automation
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Kang, S. K., 1994. “The State and
Page 105 and 106:
5. MALAYSIA INTRODUCTION - 105 - Ab
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ROLES OF THE FARMERS’ ORGANIZATIO
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(e) warehousing facilities to assis
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land leased out by farmers to FOs.
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Cooperation between the government
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Department of Agriculture, 1994. Cr
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6. MONGOLIA INTRODUCTION - 117 - En
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Agricultural extension differs from
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C streamline the mechanism of long-
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7. NEPAL INTRODUCTION - 123 - Arjun
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usiness orientation to the agricult
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* First eight months only. AGRIBUSI
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C directly to wholesale markets or
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dalmoth/chips, ketchup/squash/jam,
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Inadequate Infrastructure Storage f
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Technical and credit support is bei
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8. PAKISTAN INTRODUCTION - 137 - Ma
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C sugar industry - 78 sugar mills C
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- 141 - Table 1. Ongoing Agreements
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9. PHILIPPINES INTRODUCTION - 143 -
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Continuation Item 1995 1996 1997 19
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Seventh was seaweed and carrageenan
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Development of Irrigation Systems O
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Trade and Investment Missions An in
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Executive Order 133 (Tariff Exempti
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Table 1. Contribution of Difference
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Table 5. Overall Export Performance
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The number of registered agro-indus
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extrusion cooked products. This typ
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technical transfer loans to enable
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C The formation of an organization
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Table 1. Cultivated Area, Yield, Pr
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substitution, export requirements a
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and prepare for global climate chan
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Major Factors Contributing to the S
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12. VIETNAM - 175 - Nguyen Thi Thuy
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The equipment used in processing te
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percent of the raw materials are su
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Strategic Solutions for Achieving S
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APO Seminar on Development of Agrib
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Vietnam Ms. Nguyen Thi Thuy Senior
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Asian Productivity Organization Hir
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