Throughout this chapter we have seen that there are strong structural factors – in relation to both global and domestic markets – favouring the promotion of agro-industry in developing countries. The focus on non-traditional export products tends to revalue the natural climatic advantages of tropical and semi-tropical countries. In addition, the combined pressures of civil society social movements and advances in corporate social responsibility standards may well counter the ‘trading down’ effects of cheap wages and slack environmental regulation. Although the perspectives of long-term buoyant domestic demand, in a context of overall growth, will certainly lead to more imports, they will also provide a sustained stimulus to the development of domestic supply systems.
These combined advantages of developing countries have, as we have seen, increased inflows of FDI, whose potential benefits need, however, to be guaranteed by judicious policy measures. The force of developing country agro-industry can be seen in its increasing participation in South–South trade and investment flows. New contract relations are replacing spot markets, not only in the case of non-traditional products, but also in traditional tropical commodity exports, thus providing a more favourable environment for nego-tiating minimum social, economic and environmental standards.
The key challenges lie in the negotiation of ‘upgrading’ when primary pro-duction is inserted into GVCs, in establishing a level playing field in services, training and infrastructure for generalized competitive participation and in pro-moting an environment favourable to innovative risk-taking. Modernizing strat-egies for competitiveness should, however, be tempered by the recognition that tradition and the world of artisanal production and style-of-life consumption have an impact on increasing demand.
A strong case has been put forward for the employment and income bene-fits accruing to non-traditional exports with their labour-intensive, postharvest activities heavily biased towards female labour. A similar argument has been advanced for the spillover effects for non-agricultural rural employment of inte-grating small farmer communities into domestic markets. We have also seen, however, that many markets based on new quality and logistical standards pro-vide formidable entry barriers to small farming and have tended to strengthen larger commercial farms where the small-scale farmer is at best reinserted as a wage labourer. These trends vary considerably from country to country and region to region but point to the need both for renewed attention to the impli-cations of wage-labour agro-industry for rural development and for a discussion on ways of conditioning new investments on the adoption of measures of social inclusion along the lines of the Brazilian biodiesel programme.21
In spite of the favourable structural factors discussed above, issues relating to energy, global warming, innovation and the institutional and regulatory con-text all impose high levels of uncertainty with regard to long-term trends.
We have already discussed how one scenario for biofuels would involve an unprecedented expansion of large-scale, wage-labour farming on all three con-tinents. On the other hand, the costs of petroleum-based inputs open up com-petitive niches for labour-intensive, low-input or organic farming systems.
Global warming would seem particularly to threaten developing countries, from both floods and drought. Such threats, however, are not reserved to devel-oping countries. One consequence has been the renewed attention to the development of drought-resistant varieties in genetic research. It now seems likely that advances here will be more rapid than originally projected as greater
21 Different from Brazil’s ethanol programme, the biodiesel initiative is specifically geared to involve the family farm sector not only as suppliers of raw material, but also in the production of crude oil. To achieve this the programme is designed to promote the sources of oil, which are most appropriate to each regional bioma. In addition, to participate in the programme biodiesel firms must obtain a social certificate which guarantees that they are purchasing the percentage of raw material from the family farming sector specified for each region (Wilkinson and Herrera, 2008).
resources are dedicated to this research. Developing countries, particularly in Africa, may well be important beneficiaries of such research, which may also shift perspectives on the acceptability of biotechnology and genetic engineering.
While changes in the institutional and regulatory climate have been unac-ceptably slow from the developing country perspective, as the impasse in the Doha round has made clear, many in Europe and the USA are already adapt-ing to a ‘post-commodity’ farmadapt-ing scenario based on high-value products. To the extent that this develops, aided also by parallel movements in favour of local produce and against ‘food-miles’, the developed countries may become stronger competitors in the ‘non-traditional’ areas, which have until now pro-vided such favourable perspectives for developing countries. Such a considera-tion reinforces the importance of gearing agro-industry strategies to the domestic urban food markets of developing countries.
Throughout this chapter it has been argued that agro-industry is the deci-sive component of the food system, intermediating raw material production in the rural context and consumption in the urban milieu. In addition, we have seen that its income, employment and location effects transform agro-industry into a powerful vector of broader development strategies. Our first conclusion, therefore, would be that policies for agro-industry should occupy a central pos-ition in government strategies. In addpos-ition, we have shown that agro-industry is a complex phenomenon involving global and domestic supply chains increas-ingly governed by contract, varied production systems, with different income and employment consequences, regulatory systems, research and develop-ment, FDI and international negotiations on quality, access and subsidies.
Developing countries themselves are extremely varied in their natural and human resources and increasingly heterogeneous in their levels of economic development, making policy prescription hazardous. Nevertheless, some gen-eral policy implications can be drawn for developing countries from the differ-ent issues analysed throughout this chapter.
The first conclusion is that government-level initiative must now be given special attention. Second, however, it is clear from all we have discussed that policy must be oriented to market sustainability even when the values being transacted are traditional practices. Third, markets themselves are the objects of economic, social and environmental negotiation and regulation involving both public and private actors. Fourth, agro-industrial policies should also be a component of social policies aimed at food and nutritional security.
Last but not least, this chapter gathers empirical information from a great number of data sets, academic articles and books, multilateral agencies, NGOs, international forums and other web sites. In many cases minimum methodo-logical uniformity was only achieved to the detriment of the number of coun-tries surveyed, restricting our samples to only a very few councoun-tries. Important platforms such as that of the ILO or even the UNIDO Industrial Statistics Database suffer from the limited number of observations and generally do not allow for consistent inferences regarding absolute levels of the economic aggre-gates. There is evident scope here for cooperation among multilateral agencies since in many circumstances the same statistics appear for different years in different data sets, with different methodological approaches and, consequently, distinct results.
With these provisos in mind this chapter has highlighted the following areas as the privileged focus of policy initiatives:
● strategic policy on agro-industrial competitiveness;
● support for SMEs through capacity building, clustering and technology transfer;
● recognition of the key role of the informal sector and the need for appro-priate enabling instruments; proactive policies in relation to FDI;
● policies for inclusion of small-scale farmers and agro-producers in contract supply chains;
● provision of public goods with a view to levelling the competitive playing field; participation in development of technical and monitoring services for achieving market access;
● provision of services for building up capabilities for sustainable market access; development of consumer protection policies;
● active role in harmonizing and ensuring the transparency of quality stand-ards; measures to ensure that agro-industrial development is compatible with environmental and social sustainability to avoid ‘the race to the bot-tom’ trap as well as negotiation of standards and conditions of access in international forums.
Many of these policies will be best developed within the framework of concrete and effective international cooperation.
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