Agriculture and industry have traditionally been viewed as two separate sectors both in terms of their characteristics and their role in economic growth. Agriculture has been considered the hallmark of the first stage of development, while the degree of industrialization has been taken to be the most relevant indicator of a country’s progress along the development path. Moreover, the proper strategy for growth has often been conceived as one of a more or less gradual shift from agriculture to industry, with the onus on agriculture to finance the shift in the first stage.
This view, however, no longer appears to be appropriate. On the one hand, the role of agriculture in the process of development has been reappraised and revalued from the point of view of its contribution to industrialization and its importance for harmonious development and political and economic stability. On the other hand, agriculture itself has become a form of industry, as technology, vertical integration, marketing and consumer preferences have evolved along lines that closely follow the profile of comparable industrial sectors, often of notable complexity and richness of variety and scope. This has meant that the deployment of resources in agriculture has become increasingly responsive to market forces and increasingly integrated in the network of industrial interdependencies. Agricultural products are shaped by technologies of growing complexity, and they incorporate the results of major research and development efforts as well as increasingly sophisticated individual and collective preferences regarding nutrition, health and the environment. While one can still distinguish the phase of production of raw materials from the processing and transformation phase, often this distinction is blurred by the complexity of technology and the extent of vertical integration: the industrialization of agriculture and development of agroprocessing industries is thus a joint process which is generating an entirely new type of industrial sector.
This chapter attempts to review some of these issues and assess the actual and potential role of the agroprocessing industry in economic development. It starts by discussing the definition of the sector and reviewing some of the statistical evidence of its economic importance worldwide. It then moves on to a discussion of the role that the agroprocessing industry can play in economic development in the developing countries, before reviewing how conditions for agro-industrial development are currently changing worldwide as a result of changing trade policies and regimes and the evolution of both technology and food consumption patterns. The chapter then underlines the growing internationalization of agroprocessing activities, in particular through the increasing importance of international capital activities, and the role played by multinational corporations in this process. Finally, it discusses elements of a conducive policy environment for promoting the agroprocessing industry and for ensuring that the sector can provide the optimum contribution to economic development.
A common and traditional definition of agroprocessing industry refers to the subset of manufacturing that processes raw materials and intermediate products derived from the agricultural sector. Agroprocessing industry thus means transforming products originating from agriculture, forestry and fisheries.
Indeed, a very large part of agricultural production undergoes some degree of transformation between harvesting and final use. The industries that use agricultural, fishery and forest products as raw materials comprise a very varied group. They range from simple preservation (such as sun drying) and operations closely related to harvesting to the production, by modern, capital-intensive methods, of such articles as textiles, pulp and paper.
The food industries are much more homogeneous and are easier to classify than the non-food industries since their products all have the same end use. Most preservation techniques, for example, are basically similar over a whole range of perishable food products, whether they be fruit, vegetables, milk, meat or fish. In fact, the processing of the more perishable food products is to a large extent for the purpose of preservation.
Non-food industries, in contrast to the food industries, have a wide variety of end uses. Almost all non-food agricultural products require a high degree of processing. Much more markedly than with the food industries, there is usually a definite sequence of operations, leading through various intermediate products before reaching the final product. Because of the value added at each of these successive stages of processing, the proportion of the total cost represented by the original raw material diminishes steadily. A further feature of the non-food industries is that many of them now increasingly use synthetics and other artificial substitutes (especially fibres) in combination with natural raw materials.
Another useful classification of agroprocessing industry is in upstream and downstream industries. Upstream industries are engaged in the initial processing of agricultural commodities. Examples are rice and flour milling, leather tanning, cotton ginning, oil pressing, saw milling and fish canning. Downstream industries undertake further manufacturing operations on intermediate products made from agricultural materials. Examples are bread, biscuit and noodle making, textile spinning and weaving; paper production; clothing and footwear manufacturing; and rubber manufactures.
A further specification is related to the nature of the production process which, in many cases, can range from craft to industrial organization. For example, in some developing countries the same good may be produced both by handloom weavers working in their own home and by large textile factories that have sophisticated machinery and complex systems of organization and that produce a range of industrial products for the domestic and external markets. In such cases, it can be misleading to define agroprocessing industry just on the basis of the goods produced because only the second method of production mentioned has industrial characteristics.
Today, however, it is becoming even more difficult to provide a precise demarcation of what should be considered an agro-industrial activity: the impact of innovation processes and new technologies suggests a widening of the range of agro-industry1 inputs that could be considered, including biotechnological and synthetic products, for example. This implies that agro-industry today continues to process simple agricultural goods while also transforming highly sophisticated industrial inputs that are often the result of considerable investments in research, technology and innovation. Corresponding to this growing complexity of inputs is an increasing range of transformation processes, characterized by physical and chemical alteration and aimed at improving the marketability of raw materials according to the final end use.
All these factors – the growing complexity of inputs, the impact of innovation processes and new technologies, the sophistication and the growing range of the transformation processes – makes it increasingly difficult to draw a clear distinction between what should be considered strictly industry and what can be classified as agro-industry.
According to the traditional classification of the UN International Standard Industrial Classification of All Economic Activities (ISIC), which is quite rigid but useful for statistical purposes, agro-industrial production is present in many manufacturing sectors: 3.1 Manufacture of Food, Beverages and Tobacco; 3.2 Textile, Wearing Apparel and Leather Industries; 3.3 Manufacture of Wood and Wood Products, Including Furniture; 3.4 Manufacture of Paper and Paper products, Printing and Publishing; 3.5.5 Manufacture of rubber products. Although this chapter is about all these areas of agro-industry, it often focuses on the particularly important group of food, beverages and tobacco.
Note: ISIC classifications in parentheses. 1 At constant 1990 prices. 2 1993 for developing countries. 3 NIEs = Argentina, Brazil, Mexico, former Yugoslavia, Hong Kong, India, the Republic of Korea, Singapore and Taiwan Province of China. 4 Second-generation NIEs = Morocco, Tunisia, Chile, Turkey, Indonesia, Malaysia, the Philippines and Thailand. Source: UNIDO. 1997. International Yearbook of Industrial Statistics 1997. Vienna.
Table 3 shows the contribution of agro-industries to total manufacturing value added (MVA) in selected country groups in 1980 and 1993-94, based on the broad ISIC classification outlined above. Even in the most advanced economies, these industries represent a large part of total industrial activity. In industrialized countries, while primary agriculture accounts for a very small proportion of total output, the various industries derived from agricultural transformation represented nearly one-third of total MVA in 1994. The share is even higher (37.6 percent) in developing countries, where agro-industry is often the main industrial activity and a major contributor to production, export earnings and employment. However, the share of agro-industries has dropped by around three to four percentage points in both developing and industrialized countries since 1980, slightly more in the former and slightly less in the latter.
The major component of agro-industrial activities in both industrialized and developing countries is composed of the food, beverages and tobacco industry, which accounted in 1994 for about 13 percent of total MVA in the industrialized countries and 18 percent in the developing countries, although the share has also been declining in both groups.
As regards the distribution of world value added in the various branches of agro-industry, the share of the developing countries has increased significantly in all branches, reaching close to one-third of the world total in tobacco, footwear and textiles and also rising considerably in the cases of beverages and leather between 1980 and 1994 (Table 4).
Among the industrialized countries, a strong advance was made by the European Community (EC) in food products, beverages, tobacco and leather which, however, went along with relative declines in most other agro-industrial branches. North America strengthened its market dominance in wood and paper products, and also increased significantly its share in the rubber and textile industries. By contrast, steep relative declines occurred in Eastern Europe and the CIS, where problems of economic transition imposed a heavy toll on, inter alia, agro-industrial activity. Shares in output in this region declined for all branches, from around three percentage points for footwear, wood products and tobacco, to up to nine or ten points for food, beverages, textiles and leather.
The overall gains in contribution to output by the developing countries were reflected in the faster rates of expansion of their industries compared with those of the industrialized countries during 1980-94 (Table 5). Their rate of growth exceeded those of industrial and transition economies for all branches of industrial activity during the 1980s, and again in 1990-94. Rubber and paper were particularly buoyant throughout the period, as was the beverage industry in 1990-94.
The food, beverages and tobacco industries combined are by far the most important component of agro-industrial activities in both developed and developing countries, and also account for a sizeable share of their overall economic output. In the case of the developing countries, food, beverages and tobacco manufacturing account for about 3 to 4 percent of GDP, the share in the various regions showing a remarkable convergence over the past decades (Figure 13).
Latin America and the Caribbean stands apart from the other regions, however. While the economic weight of the subsector has been historically greater in this region, it has tended to lose relative importance since the mid-1980s, in contrast to the other regions where it has tended to increase. Most notable is the steady rise in Asia and the Pacific throughout much of the 1970s and 1980s, a trend which has continued also in the 1990s.
1 Excluding China, for which data were not available. 2 At constant 1990 prices. Source: UNIDO. 1997. International Yearbook of Industrial Statistics 1997. Vienna.
1 At constant 1990 prices. Source: UNIDO. 1997. International Yearbook of Industrial Statistics 1997. Vienna.
At the global level, the food, beverages and tobacco industries are dominated by the developed countries, which in 1994 accounted for about 80 percent of the world value added in the subsector, with western Europe and North America together accounting for nearly 60 percent (Figure 14).
In the developing countries, the lion’s share of total production in the subsector is accounted for by Asia and the Pacific and Latin America and the Caribbean, each with approximately 45 percent of developing country production (Figure 15). Yet, while Latin America and the Caribbean, once dominant among the developing country regions, has seen its share decline significantly in the course of the 1980s from the 50 to 60 percent of the 1970s, the share of Asia and the Pacific has expanded rapidly over the same time span. The decline in the relative position of sub-Saharan Africa has been dramatic: after peaking in 1983, its share in developing country production has contracted steadily, falling below that of the Near East and North Africa.
Expressed as a ratio to agricultural GDP, value added in food, beverages and tobacco provides a broad indicator of the importance of processing relative to primary agriculture (Figure 16). As emerges from the figure, processing has always been an important component of overall agrifood production in Latin America and the Caribbean, indicating a relatively greater sophistication of the whole food chain in that region. However, processing has tended to lose importance vis-à-vis total agricultural GDP since the early 1980s in this region.
In all the other developing regions, processing has gained in importance relative to primary agricultural production, most notably so in the case of Asia and the Pacific.
Theoretical and empirical studies of the structural changes that accompany the development process have revealed a number of constant patterns. The most basic is a secular decline in the relative weight of the agricultural sector vis-à-vis non-agriculture as per caput income increases. This relative decline is observed as a fall in the share of agriculture in value added, employment, trade and per caput consumption. This goes together with a drop in the share of primary agricultural production in the value of the final product, and with a parallel increase in the agroprocessing industry value added.
These observations have emanated the popular prescription that development necessarily involves a transfer of resources out of agriculture and that this is largely coterminous with industrial development. More recently, however, the development debate has increasingly focused on the far more relevant issue of whether and how the agricultural sector can be expected to make an optimum contribution to the overall process of economic growth. This question can be asked both regarding the size and functioning of the agricultural sector itself and regarding its links with the rest of the economy. More specifically, it can be argued that the development of agro-industry, for those countries with a comparative advantage in this sector, may contribute to achieving the proper balance between agriculture and industry.
A precise theoretical rationale for emphasizing the role of agro-industry during the process of development is provided by Hirschman’s linkage hypothesis,2 which postulates that the best development path lies in selecting those activities where progress will induce further progress elsewhere. Thus, an activity that shows a high degree of interdependence, as measured by the proportion of output sold to or purchased from other industries, can provide a strong stimulus to economic growth. While the issue of linkages will be discussed in some detail later, the general observation can be made here that, because of its high degree of interdependence with forward and backward activities, agro-industry can play a very important role in accelerating economic activity.
The potential for agro-industrial development in the developing countries is largely linked to the relative abundance of agricultural raw materials and low-cost labour in most of them. The most suitable industries in such conditions are indeed those that make relatively intensive use of these abundant raw materials and unskilled labour and relatively less intensive use of presumably scarce capital and skilled labour.
Many of the industries using agricultural raw materials have in fact those characteristics that make them particularly suitable for the circumstances of many developing countries. Where the raw material represents a large proportion of total costs, its ready availability at a reasonable cost can often offset such disadvantages as a lack of infrastructure or skilled labour. Furthermore, for many agro-industries, a small plant may be economically efficient, which is another important factor in developing countries where the domestic market is limited by low purchasing power and sometimes by the small size of the market itself.
BOX 11
Value added per employee varies widely, both among countries and among different branches of agro-industry. The Table (column 1) shows value added per employee in food processing for selected countries, ranging from a high of $102 300 per worker in the United States to a low of $1 700 in India, among the countries covered. The disparities are also substantial – more than 10:1 – between NIEs (e.g. the Republic of Korea, Singapore and Hong Kong) and the low-income countries (e.g. China, Kenya and India), no doubt reflecting differences in the technologies used as well as in managerial and operative skills. The Table (column 2) also shows that, as expected, wage levels rise with productivity. In food products, annual wages per employee range from a low of $600 in Indonesia to a high of $27 800 in Germany. Workers in the food industry in Singapore are paid 20 times as much on average as those in Kenya and India.
As for the cost structure, raw materials and utilities (water and power) account for well over half the total cost of production in food processing (column 3). In most countries the cost of these inputs represents between 60 and 90 percent of the gross value of production. The proportion tends to fall as productivity rises. Peak levels were found in Kenya and India, where the cost of raw materials and utilities constituted 93.1 and 87.7 percent, respectively, of the value of output in 1993. Labour costs, expressed as a percentage of the total value of output, fluctuates within a relatively narrow range, but the share tends to be higher in the industrialized than in the developing countries. Operating surplus (column 5) covers the returns to capital and entrepreneurship in the form of interest payments, profits and dividends. The data do not reveal any clear-cut pattern. The level of operating surplus seems to depend more on the market conditions and degree of competition prevailing in each country than on the nature of the technology used.
1 ISIC 3.1.1/1.2.
Source: UNIDO. 1996. International Yearbook of Industrial Statistics 1996. Vienna.
The factors actually determining the most economic location for an agro-industry are complex. Generally transport is a main factor. Most agricultural products either lose weight and bulk in processing, meaning they can be transported more cheaply after they have been processed, or they are perishable and so can be more easily transported in processed form. The situation is also affected by labour supplies and the availability of power and other infrastructure, but industries based on these products can often be set up economically in the area where the raw material is produced. They can therefore contribute to the relief of the rural underemployment which is characteristic of developing countries.
There are, however, exceptions. For most grains, shipment of the raw material in bulk is frequently easier, while many bakery products are highly perishable and thus require production to be located close to the market. Oilseeds (except for the more perishable ones such as olives and palm fruit) are also an exception and can be transported equally easily and cheaply in raw form or as oil, cake or meal, so there is more technical freedom of choice in the location of processing. The same is true for the later stages of processing of some commodities. For example, while raw cotton loses weight in ginning, which is consequently carried out in the producing area, yarn, textiles and clothing can all be transported equally easily and cheaply.
Where there is a high degree of technical freedom in the choice of location, industries have frequently tended to be located in proximity to the markets because of the more efficient labour supply, better infrastructure and lower distribution costs in the large market centres. With production for export, this factor has often tended to favour the location of processing in the importing country. This tendency has been reinforced by other factors, including the need for additional raw materials and auxiliary materials (particularly chemicals) that may not be readily available in the raw material-producing country; the greater flexibility in deciding the type of processing according to the end use for which the product is required; and the greater regularity of supply and continuity of operations that are possible when raw materials are drawn from several different parts of the world. However, with improved infrastructure, enhanced labour efficiency and growing domestic markets in the developing countries, there is increased potential for expanding such processing in the countries where the raw materials are produced. In addition, with growing liberalization of world trade, more developing countries will be able to take advantage of lower labour costs to expand their exports of agro-industrial products.
One further aspect of importance for the location of agro-industries would appear to be the possible existence of economies of scale. Where there are considerable economies of scale (as in the production of rubber tyres and pulp and paper), large markets are of course essential. The size of market needed for economic production in such cases may be far in excess of the domestic market in individual developing countries, where it is limited not only by the low level of per caput income but also by the frequently small size of the total population. However, although in most agro-industries average costs of production can be reduced as the scale of plant is increased, the importance of economies of scale should not be exaggerated. The lower cost of production with a large-scale plant results not only from the spreading of capital and other overhead costs, but also from the frequently smaller labour requirements per unit of output in the larger plant, an aspect which is of less importance in developing countries where labour costs are low.
Processing is only one link in a continuous chain between raw material production and final consumption. The specificity of agro-industry vis-à-vis other industrial subsectors lies largely in the biological nature of the raw material. The raw materials used by agro-industry are generally characterized by the seasonal nature and the variability of their production as well as by their perishability. These aspects put particular demands both on the organization of agro-industrial activities and on the agricultural base producing the inputs, thereby adding to the need for a close integration of raw material production and processing.
Crop and livestock production cannot be controlled with great accuracy and tends to vary sharply from year to year owing to the effects of weather and pests and diseases. It is possible to some extent to reduce these fluctuations through the better use of soil and water resources and control of pests and diseases. It is generally in the interest of the processing enterprise, which requires as regular a supply of raw material as possible, to ensure or promote implementation of these measures by producers.
Furthermore, for most crops production tends to be concentrated in a particular season. It can therefore be advantageous for processing enterprises, particularly those engaged in canning and freezing, to promote the production in a particular area of a suitable range of crops and varieties maturing in different seasons in order to keep processing facilities in operation for as long as possible. The perishable nature of many crop and livestock products also requires close contact between the producer and processor as well as advance planning to keep losses to a minimum.
However, the most impelling reason for the necessity of this close contact arises from the possibility of controlling the quality of the raw materials. Their quality can be influenced by such factors as the choice of seed; the application of fertilizers; the control of weeds, pests and diseases; and sorting and cleaning. Processors are interested not only in obtaining uniformity in the quality of their raw material supplies, but in some cases their needs are quite specific. Particular varieties of some crops (for example, of tomatoes, apples and pears for canning) have long been grown for processing, but the need for such varieties is increasing as food technology develops more advanced processes. Often there are specific requirements for such factors as shape, size, texture, colour, flavour, odour, acidity, viscosity, maturity, specific gravity, soluble solids, total solids and vitamin content.
The initiative for the introduction of different varieties and practices has usually come from the processing enterprises. As a result, for some commodities, especially fruit and vegetables for canning and freezing, raw material production and processing are increasingly "vertically integrated" in the developed countries through various forms of contract farming. In the developing countries, the large-scale plantation production of such crops and sugar, coffee, tea, sisal and rubber is based on the vertical integration of raw material production and processing.
From the point of view of development strategy, one of the most important features of any industry is the degree to which it is able to generate demand for the products of other industries. This phenomenon is known as linkage. An industry may encourage investment both in subsequent stages of production by "forward linkage" and in earlier stages through "backward linkage".
The establishment of certain primary processing industries can lead, through forward linkage, to a number of more advanced industries. Forest industries are particularly valuable as a base on which other industries can be established in this way. Once paper and paperboard production has been started, a large number of conversion industries can emerge, such as the manufacture of paper bags, stationery, boxes and cartons, wooden containers, furniture and a wide range of timber products. There are many other examples: products such as vegetable oils and rubber are used in a wide variety of manufacturing industries; based on the preparation of hides and skins, tanning operations can be started, as can the manufacture of footwear and other leather goods.
The development of agro-industries also has many beneficial feedback effects on agriculture itself. The most direct one is, of course, the stimulus it provides for increased agricultural production through market expansion. Often, in fact, the establishment of processing facilities is itself an essential first step towards stimulating both consumer demand for the processed product and an adequate supply of the raw material. The provision of transport, power and other infra-structural facilities required for agro-industries also benefits agricultural production. The development of these and other industries provides a more favourable atmosphere for technical progress and the acceptance of new ideas in farming itself.
The capacity of agro-industry to generate demand and employment in other industries is also important because of its growing potential for activating "sideway linkages"; that is, linkages that derive from the use of by-products or waste products of the main industrial activity. For example, animal feed industries can utilize several agro-industrial by-products, such as whey, oilseed presscakes and blood, carcass and bone meal. In addition, many industries using agricultural raw materials produce waste that can be used as fuel, paper pulp or fertilizer. Recycling and biological agriculture are two activities that go together to respond to the idea of a sustainable form of exploitation of natural resources within an efficient industrial context.
An effect that is sometimes overlooked is the substantial increase in employment that may result from setting up an industry using a raw material. Even if the industrial process is itself capital-intensive, considerable employment may be generated in providing the raw material base. Finally, agro-industry gives rise to a demand for a wide variety of machinery, equipment, packaging materials and intermediate goods used in the processing itself.
The role of agro-industry as a sector of the economy has multiple facets and changes in the course of development. In the early stages of growth, industrial processing of agricultural products tends to be limited to a few export crops, while the majority of agricultural products are consumed after minimal forms of processing that are performed entirely within the agricultural sector. Upstream processing industries prevail in their more primitive form, such as rice and flour milling, oil pressing and fish canning. An example of this stage would also be the plantation economy, where agro-industry and primary agriculture appear as a vertically integrated activity, with upstream processing taking over the agricultural base through a production system that is often founded on forms of disfranchisement of labourers and small cultivators.
Other cases of apparently more diversified agro-industrial activities, based on fruits and vegetables or livestock products, may be equally primitive in their organization, the low degree of value added produced and the lack of linkages both with the chemical and mechanical industries and with marketing and financial services. Such is the case for Egypt where, in spite of the growth of vegetable and fruit production and the related transformation industry, primary agriculture still accounts for almost 90 percent of the intermediate goods purchases of the industry, while a longer chain of links has developed only for livestock-related products. Similarly, a large share of agricultural raw products in total intermediate purchases characterizes most agro-industrial production of tropical beverages and other products originating from plantation crops, as well as vegetables, fruits, tobacco and livestock in the first stage of domestic industrial development.
Even in the case of limited backward linkages outside agriculture, food processing in the early stages of development can be an important direct complement to agriculture as a source of employment for seasonal labour. It requires very little investment and provides ample opportunities for expanding value added by using underemployed resources as well as for improving incomes and nutrition. Cottage industries of various forms are found in almost all areas where agriculture is sufficiently diversified, and there is scope for extending the range and timing of production both for dietary reasons and as a hedge against uncertainty. The off-farm employment opportunities provided by food processing may thus represent the first instrument of time-smoothing in the labour market and, as such, is an important factor of capital accumulation in rural areas.
Morocco provides an example of a more advanced stage of development of agro-industry, characterized by some more sophisticated downstream industrial activities, but where off-farm employment nevertheless remains the industry’s main engine of growth. In this country, the presence of a well-developed food preserve industry for tomato sauce, fruit juices and other canned fruit ensures stronger links with sectors other than agriculture, both as providers of inputs (chemicals, glass, aluminium and paper) and as dependent sectors of further processing (marketing services). The food industry in Morocco is estimated to purchase only about 70 percent of its raw materials from agriculture, while the final product sold to the consumer and exported in increasing quantities contains more than 45 percent of non-agricultural products.
A further stage of development of agro-industry as a producer of food and beverages can be observed in a number of middle-income countries, such as Turkey, Argentina and Chile. This stage is characterized by full development of the forward linkage chain, with several marketing and other services incorporated in the final product, and product innovation prevailing over process innovation to provide a competitive advantage and sources of growth to the firms in the market. The linkage with the marketing chain tends to be well established, with both organizational and financial links between the producers and the retail outlets. The pace at which new products are introduced is extremely high, and this testifies to the importance of product innovation in this phase of the industry cycle.
Finally, for high-income areas such as the EU or the United States, the mature stage of the food industry still appears to be very dynamic. While the backward and forward links do not go much beyond what has already been achieved by third-stage firms in middle-income countries, a separate series of linkages develops through the production of specialized machinery and process innovation. Because of their size, market leadership and degree of internationalization, the food-producing companies located in the high-income countries are often instrumental in setting the base for a whole technology of processed food production. The areas involved range from the planning and quality control of agricultural products and other raw materials, to the design and manufacture of machinery, specification and monitoring of the production cycle and the provision of specialized financial and other services.
Thus, the multiplicative power of the agroprocessing industry throughout the economy through the linkage effects appears to be an important factor of growth both for developing and developed countries. An additional reason why agro-industries are especially effective in activating demand from the upstream and downstream sectors lies in the position of food in the consumption chain. Thus, even at a relatively low level of sophistication with limited backward and forward linkages, agro-industries may still be particularly effective in channelling increased global demand into increased output. This is so because, at the earlier development stages, a high share of private expenditure is directed towards cereals and other staples and, later on, as development progresses, towards fruits and vegetables and other food products whose income elasticity is relatively higher.3 At later stages of development, it is the growing integration of the producing sectors that mainly ensures the capacity of food production to activate the rest of the economy, although the contribution of consumption to the industry multiplier remains sustained through diversification and growth of products with higher income elasticities.
An important feature of agroprocessing industries is that they are a major source of employment and income, thus providing access to food and other necessities to large groups of population. They are, therefore, essential elements in the attainment of food security goals.
Agroprocessing industries (food, beverages and tobacco) typically employ about 10 percent of the total labour force employed in manufacturing in the developed countries and around 20 to 30 percent in the developing countries (Table 6). The highest shares are found in Africa, where they reflect at once the poor development of the other manufacturing sectors and the pioneering role of agroprocessing, and, to a lesser extent, in the Latin American countries in the sample. Table 5 also shows the share of agroprocessing wages and salaries in total wages in manufacturing. By comparing both shares, it appears tha
