• Definition of agro-industry: post-harvest activities involved in the transformation, preservation and preparation of agricultural production for intermediary or final consumption (with emphasis on food) • Whether looked at from exports (esp. “non- traditionals”) or domestic market (population growth/urbanization) agro-industry fundamental to income and employment creation in developing countries
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• Definition of agro-industry: post-harvest activities
involved in the transformation, preservation and
preparation of agricultural production for
intermediary or final consumption (with emphasis on food)
• Whether looked at from exports (esp. “non-traditionals”) or domestic market (population growth/urbanization) agro-industry fundamental to income and employment creation in developing countries
• In an extended definition agri-processing ranges from 20-35% of developing country GDP. The entire food-system may account for as much as 50% of developing country GDP.
• The agribusiness to agriculture ratio increases with development (0.6, 2.0 and 3.3 using WDR typology) and is highly correlated with HDI.
Year*
Agriculture
Share of
GDP**(1)
Agribusiness
Share of
GDP**(2)
Ratio
(2)/(1)
% Agro-
processing
sector in GDP*
% Food-processing
and beverages in
total manufacturing*
Agriculture-based Countries 0.39 0.22 0.57 0.050 0.468
Transforming Countries 0.16 0.32 1.98 0.040 0.224
Urbanized Countries 0.08 0.27 3.32 0.060 0.203
United States 0.01 0.13 13.00 - -
LICs 0.043 0.32
LMICs 0.055 0.20
UMICs 0.051 0.20Note: (*) UNIDO Industrial Statistics Database 2005 for agro-processing data with respective year.
Agribusiness combines the value added for agro-related industries and that of agricultural trade and distribution.
Unweighted averages consider all information available in each column.
Note: (**) Source on Jaffee et al (2003) for agriculture and agribusiness share of GDP.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Human Development Index - HDI
Agribusiness-to-Agriculture Ratio
Higher correlation for low HDI countries
Mostly Agriculture-based
countries
United States
Mostly Urbanized
countries
Source of data: Jaffee et al (2003) and Human Development Statistics (UN)
• Employment statistics fragile. ILO estimates for formal sector and countries with official statistics around 22 million.
• Informality levels estimated at an average of 60%.
• Increasing levels of female participation (50->80% in non-traditional sector).
• Agro-industry (extended definition) important factor in rural non-farm employment and key stimulus for agriculture.
Note: (*) UNIDO Industrial Statistics Database 2005 for agro-processing data with respective year, in current US$.
Note: (**) Source on WDR (2008), data for 2001-2003, US$ 2000 prices.
Processed meet, fish,
fruit, vegs & fatsDairy Grains
Others: bakery,
macaroni, chocolate...
Food
Processing
Sector
LIC 3830 9418 6388 4395 4937
LMI 15941 21090 15587 10605 15083
UMI 18023 21855 29308 17919 18296
HIC 46675 71439 87569 61433 55408
Based on the UNIDO Industrial Statistics Database 2005
• 80% of global food and beverage sales are processed products – 60% of which are consumed in high income countries
• However growth in processed food consumption fastest in developing countries: 2-3% for HICs but 7% in UMICs, 28% in LMICsand 13% in LICs annually between 1996-2002
• Shift in diet composition and towards convenience foods – higher levels of sugars, fats and oils (health implications)
Source: Gehlhar and Regmi (2005), based on Euromonitor
Oils & FatsBreakfast
cerals
Ready
mealsDried food Dairy products
LICs 11,6% 56,3% 11,0% 14,4% 11,4%
LMICs 8,1% 12,3% 10,1% 10,9% 9,7%
UMICs 7,4% 9,7% 7,9% 8,3% 6,7%
HICs 0,2% 3,3% 4,7% 1,8% 2,9%
Source: Gehlhar and Regmi (2005), based on the Euromonitor, 2003.
Average annual grow th rate (1998-2003)
• Developing countries maintain same global agri-market share as in the 1980s (36% -Aksoy, 2005) but trade composition has changed dramatically.
• However, small share of traded processed products in total food sales (10%) points to importance of FDI which has grown much faster than trade in last two decades
• Growing South-South trade and FDI – but these are highly heterogeneous