Development of Agribusiness Enterprises - Asian Productivity ...

y the United States to promote exports by SMEs. Under this program, enterprises that are
willing to promote their products abroad will be charged differently (usually a very low rate,
amounting to as much as 50 percent of the total cost) based on their financial situation. The
balance of the costs is borne by the government. During both the preparation and
implementation stages, the government also provides consultative assistance and other
necessary guidance in order to achieve effective promotion.
The World Bank recognizes six important general governmental roles in developing
an economy based on the experience of the United States as well as East Asian countries.
The first role is promoting general public education. The other roles are promoting
technology, supporting the financial sector, investing in infrastructure, preventing
environmental degradation, and creating and maintaining a social safety net. In their
implementation, these roles need to be supported by a sound macroeconomic policy.
In adapting these roles in promoting agribusiness, the government should educate new
entrepreneurs, businessmen and the agricultural community on the importance of
international markets, socialize the GATT/WTO agreements and other international
conventions and treaties on international trade, and disseminate tariff adjustments in each
trading partner.
The government should identify market opportunities for agricultural products in the
domestic market as well as in the international market through their overseas representatives,
including the identification of export procedures, laws and regulations in the target markets.
All information should be transparent to all agribusinesses, and it should be updated
regularly. The United States offers an excellent example in this regard. All US agricultural
attaches analyze market situations within the countries in which they are serving, then
disseminate the information through the United States Department of Agriculture (USDA)
in Washington. USDA then puts the information on the Internet to make it accessible by
agribusinesses. To help the private sector gain access to the target markets, the government
should develop strong export promotion programs with agribusinesses as the main
participants. In some cases, government-to-government cooperation to facilitate intercountry
trading could be initiated.
Promoting technology will improve quality, increase efficiency, and product
development to enter markets. Preventing environmental degradation is absolutely necessary
to conserve natural resources for the future. Creating and maintaining a social safety net such
as issuing relevant laws, refining and enforcing commercial laws and regulations fairly,
covering all segments in the community, and controlling administrative abuse are definitely
required to support the conducive climate for the overall growth of development.
The primary responsibilities of government in promoting broad-based agribusiness
growth can be grouped under four broad headings:
C The creation of a business climate conductive to agribusiness growth;
C The creation of a level playing field for small firms and farms;
C The strengthening of resource and support institutions; and
C The provision of needed investment infrastructure, public goods and human resource
development. Since exports of agricultural products will be successful only if
supported by industrial farming, developing a strong agribusiness sector will provide
more opportunities.
A supportive business climate is indicated by political and economic stability. It is also
influenced by several specific factors such as reducing barriers to market entry, promoting
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