Agroindustrial project analysi

AN OVERVIEW 11cent; this far exceeds the population growth rate of 2.8 percentand was particularly important as an employment source in thelowest-income countries, in which the annual average growth ratebetween 1970 and 1975 in these jobs was 7.9 percent.' 6 In thisregard the significance of small-scale industries (ssi's) is particularlynotable: ssi's generally provide most of the jobs in the manufacturingsector, and most ssi's are agroindustries. For example,ssi's in Indonesia account for approxmiately 75 percent of manufacturingemployment even though they contribute only 16 percentof the sector's value added.'" Thus, improving the viability ofsmall and medium-size agroindustries appears to be especially importantto achieving employment objectives. A final point on theemployment benefits of agroindustries is that they frequently providemajor employment opportunities for women. In India, forexample, 25 percent of the workers in the food and beverage industryare women, as are 60 percent in the tobacco industry; inSri Lanka, women constitute 42 percent of the labor force of thefood-and-drink industry; in Cyprus, 36 percent; in Honduras, 21percent. 1 8Although these figures demonstrate the economic significanceof the agroindustrial sector, they understate its effect on a nation'sother industries. A large percentage of the commercial sector isengaged in distributing agroindustrial products. Agroindustriessimilarly contribute to the financial sector and other service industries.Finally, enterprises manufacturing materials for agroindustry,such as agrochemicals and farm machinery, depend on the demandfor agricultural produce, and this demand in turn depends on aviable food- and fiber-processing industry.An export generatorThe most important natural resource of most developing countriesis agriculture. Agricultural produce has an international demandand, because production capacity frequently exceeds local16. Ibid.17. Donald R. Snodgrass, "Small-scale Manufacturing Industries: Patterns,Trends, and Possible Policies," Development Discussion Paper no. 54 (Cambridge,Mass.: Harvard University, Institute for International Development,March 1979), pp. 12-13.18. UNIDO, Industrialization and Rural Deoelopment, pp. 39-44.