Agroindustrial project analysi

IAn OverviewTHE PURPOSE OF THIS BOOK is to provide and illustrate a frameworkfor analyzing and designing agroindustrial projects. It is writtenprimarily for public sector analysts in developing countries, butit should also be useful to private sector managers financing ormanaging agroindustries. The analytical framework may also behelpful to organizations starting agroindustrial projects in moredeveloped economies. This initial chapter will define agroindustry,introduce the analytical framework, and describe the scope of thebook and the organization of the remaining chapters.DefiningAgroindustryAn agroindustry is an enterprise that processes agricultural rawmaterials, including ground and tree crops as well as livestock.'The degree of processing can vary tremendously, ranging from thecleaning and grading of apples to the milling of rice, to the cooking,mixing, and chemical alteration that create a textured vegetablefood. As shown in table 1-1, agroindustries can be roughly categorizedaccording to the degree the raw material is transformed.In general, capital investment, technological complexity, and managerialrequirements increase in proportion with the degree of transformation.The purposes of transforming raw food and fiber areto create an edible or usable form, to increase storability, to createa more easily transportable form, and to enhance palatability ornutritional value. 2 Agroindustrial projects are unique because of1. Agroindustries are essentially processing operations and thus representonly one component in the larger, seed-to-consumer agribusiness system.2. The closer one moves to level iv in table 1-l, the more similar the enterprisebecomes to nonagroindustrial manufacturing operations.3