Agribusiness1.ppt

LOCAL ECONOMIC DEVELOPMENT An approach to promote economic growth, creation of wealth, and contribute in the over-all development of poor communities Managing existing resources of a locality to stimulate economic activity, generate employment, and create new community and business wealth to achieve a better quality of life for all in the community

LOCAL ECONOMIC DEVELOPMENT A process by which actors within communities work collectively with public, business and civil society groups to create better conditions for economic growth and employment generation A partnership process between local governments, community-based organizations and the private sector to stimulate the economy of a well defined territory, build up competitive advantage of a locality and develop new institutions and local systems through dialogues and strategic actions (World Bank, IIED)

LOCAL ECONOMIC DEVELOPMENT  is about communities improving their investment climate and business enabling environment  is about integrating local development in a broader strategic planning process for a district, province, or region  is about maximizing the competencies and the wide range of disciplines and functions of the local government and private sector – environment planning, business development, infrastructure and real estate management and finance.

AGRICULTURAL PROJECTS AS MEANS TO OPERATIONALIZED THE

LED STRATEGY

Natures of Agriculture Projects  Traditional agriculture – monocrop production –oriented  Diversified crop production – cash crops to high value crops  Agro- industrialization Upstream industries – initial processing of agricultural commodities e.g. Rice, corn and flour milling, fish canning, oil extraction

Downstream industries – further manufacturing operations on intermediate products made from agricultural materials e.g. bread, biscuits, noodle making, weaving, garment making, paper making, soap making

 Integrated production, processing and marketing enterprises (crop, livestock and fisheries/aquaculture)

Agribusiness/Social Enterprises  Agribusiness encompasses the sum of all activities that occur in farm resource supply, farm production, manufacturing and processing, storage, distribution and wholesale and retail sales of plants, animal, forestry and fishery products. (DA)  Agribusiness embodies the “seed to shelf” concept of the supply chain  Agribusiness is applying science and technology to farming and market solutions to agriculture. It involves organizing and managing the supply chain from production to post harvest to processing/ manufacturing to transport and finally marketing to deliver to end-users and customers (Malonzo).  Social enterprises are agribusiness activities in the agricultural, manufacturing, industrial and service sectors (KFI)

AGRIBUSINESS All market and private business-oriented entities involved in the production, storage, distribution, and processing of agro-based products; in the supply of production inputs and in the provision of services (e.g. extension and research) - GTZ

AGRIBUSINESS Mode of managing agricultural enterprises at the production input and output distribution and processing levels. – German science Business of agriculture. – Anglophone context; market-oriented definition

Agribusiness support is considered to be part of a country’s economic development concept - alternative job creation - income generation - reducing poverty

Agribusiness support is considered to be part of a country’s economic development concept - alternative job creation - income generation - reducing poverty

Key Players Category

Groups involved in the supply chain

Role and activities

Producers

Farmers and fisherfolks

Food producers

Distributions and middlemen

Haulers, commission agents, distributors, wholesale and retail merchants in rural and urban markets, export agents

Purchase of produce, transport to buyers in retail and wholesale markets, quality grading, provision of agricultural/fishery inputs and credit

Buyers

Food processing companies, international buyers from retail companies, processing companies, fair trade organizations and brokers

Purchase of agricultural produce for further processing/value addition, quality grading, marketing and sales, support and advise to producers in fair trades

Support Agencies

Farmers’ organizations, cooperatives, unions

Support to producers – securing production/marketing training and extension support

Key players Category Support Agencies

Groups involved in the supply chain Fair Trade organizations Non-government organizations

Roles and Activities Training of producers, provision of inputs/credit, community development, quality upgrading, advice and support for export procedures

Trade and Industry associations, Chamber of Commerce

Support to processors in market studies, feasibility studies, business planning, networking, training, advice on technical inputs

Advise to producers on production, Consultants(local and marketing, crop protection, quality international) improvement, support agencies Banks, Lawyers, accountants

Provision of credit to farmers and agroindustries, assistance in business planning, preparation of legal agreements and contracts

Key Players Category Government

Groups in the supply chain

Roles and responsibilities

Ministry of Agriculture

Development of policy framework for agricultural production, planning, sector monitoring, extension/advisory services, farming inputs, direction and control of agricultural research policies, research programs and trainings

Ministry of Trade and Industry/Export Promotion

Development of policy framework and legislation for domestic, regional and international agribusiness, processing and export market, quality standards and implementation of food legislation

Local Government

Development and implementation of local plans and sub-sector programs, building capacity for local institutions for planning and delivery of public services

Financial Viability and Sustainability of Agribusiness Undertaking - must respond to the needs of intended beneficiaries and make profits to recoup cost of investment, expand the enterprise - must ensures stable income for the beneficiaries, and generate revenues for the LGU to finance other capital investment projects of the city.

Preliminary Assessment When identifying what agriculture projects to implement in the city, the following are critical questions are to be answered during the preliminary assessment:  What are our objectives for investing in agriculture projects?  Why do you want to undertake agriculture projects in your City? What is the end in mind?  How do your agriculture projects fit into your overall vision, goals, objectives and LED strategies?

Possible Responses  We want stable sources of income for our constituents  We want to generate more revenues to finance other requirements of the city  We want to maximize the utilization of our agriculture base since more than 50% of our barangays are rural  We want to produce goods and services that are competitive not only in the city but also in the region, national and ultimately penetrate the global market

Project Packaging Components  The Congruence and relevance of the agriculture projects to the City’s vision, goals, objectives and LED strategies  Marketing Feasibility Analysis - the presence of good market, the size of the market and the sales prices and volume expected to be realized  Technical Analysis - the production capacity of the enterprise, the appropriate technology and operational processes to be used  Institutional Arrangements – the organization and legal structures to be adopted, linkages and networks formed and technical assistance required

Project Packaging Components  Social and Environmental Safeguards – the social and environmental impacts of the enterprise  Financial Feasibility Analysis – the amount of financing needed for both fixed assets and working capital, sources of financing, and cost of capital

 Economic Impact – the overall enterprise rates of return, cash flows, income break-even points and ability to pay for loan amortizations, if any, and the benefits of the enterprises to the beneficiaries and city

You are measured Not for what you have, Not even for who you are, But what others have become Because of you. . .