Governments and research and development organisations are increasingly interested in understanding and promoting rural agroenterprises as a way to combat rural poverty. Attention to rural agroenterprises and processes of agroindustrialisation in general are related to two fundamental global economic tendencies. First, increasing income levels and demographic changes such as increased female labour force participation have fueled demand for high-value and processed products. At the policy level, structural adjustment and liberalisation policies have reduced barriers to trade globally and allowed markets to reach even the most isolated rural areas. Taken together, these trends are fueling a process of agroindustrialisation that is transforming agriculture in the developing world. The changes are most visible in Asia and Latin America, but Africa is beginning to show similar effects. Agroindustrialisation brings major opportunities but also many challenges, especially to poor farmers and small agroenterprise entrepreneurs. Market forces cannot be denied, but governments and other organisations must be proactive to ensure that benefits are socially and economically positive and equitably distributed.
The agroindustrialisation process has three main characteristics. First, there is the growth in off-farm agriculture-related activities, such as the supply of farm inputs or the processing, distribution and sale of farm products. The suppliers, farmers and distributors form supply or product chains. The second characteristic of agroindustrialisation is an increased level of integration among actors in the supply chain, ranging from loose coordination to contracting and even subsidiary relationships. Finally, changes in products, technologies and market structures accompany these shifts in number and integration of actors.
