Agroindustrial project analysi

8 AGROINDUSTRIAL PROJECT ANALYSISsector between 1960 and 1973.10 In Ecuador, a country betweenNicaragua and the Philippines in population and per capita GNP,the pattern is the same: agroindustries are responsible for 69 percentof the value added in the industrial sector."Agroindustries are more important to the economies of lowerincomecountries and decline in importance as the countries furtherindustrialize. The initial stages of industrialization draw onthe countries' natural agricultural endowment." 2 Chenery and Hoffmanhave documented that countries diversify in subsequent stagesinto nonfood and fiber products, frequently as part of an importsubstitutionstrategy. 13 The shifting pattern is shown in table 1-2for several countries in Latin America, Asia, and Africa.Although agroindustries tend to account for a smaller relativeshare of the manufacturing sector as industrial development proceeds,other important transformations within the agroindustrialsector occur. As shown in table 1-3, the per capita consumption ofprocessed foods and the value added per employee in the developingcountries' food and beverage industries appear to increase asincomes rise.Given that the urban population (who consumed relatively moreprocessed foods) of 990 million in developing countries in 1980will grow to 2,155 million by the year 2000, one can expect asignificant growth in the food-processing industries." 4 The mix ofprocessed foods will change to favor those requiring higher levelsof transformation (see table 1-1).10. Bureau of Census and Statistics, Annual Survey of Manufacturers (Manila,1974).11. IDB, Identificaci6n de Prioridades de Inversi6n en el Sector Agropecuariode Ecuador ["Identification of Investment Priorities in the Agricultureand Cattle Sector of Ecuador"], Agricultural Development Document no. 14(Washington, D.C., August 1973).12. An example is textiles, one of the first agroindustries established indeveloping countries because it produces a basic good and can take advantageof the lower labor costs as well as the agronomic capabilities. As of 1974,50 percent of the looms and 48 percent of the spindles were installed in developingcountries. International Federation of Cotton and Allied TextileIndustries (IFGATI), International Cotton Industry Statistics, vol. 17 (1974),pp. 13, 19.13. Hollis B. Chenery, "Patterns of Industrial Growth," American EconomicReview, vol. 50 (September 1960), pp. 624-54; Walter D. Hoffman, The Growthof Industrial Economies (Manchester: University of Manchester Press, 1958).14. United Nations, Urban and Rural Population (New York, 1970), Table 5,pp. 14-19.