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Posted July 1997

Special: Empowering the rural disabled in Asia and the Pacific
The "Midas Touch": food and agro-industries for income generation by disabled people
Alastair Hicks
Senior Agricultural Engineering and Industry Officer
FAO Regional Office for Asia and the Pacific


Introduction | Women | Cambodia 1 | Cambodia 2 | Lao PDR | Sri Lanka | Thailand 1 | Thailand 2 | Vietnam 1 | Vietnam 2 | Agroindustry | Horticulture | Strategies

Introduction

Increased agricultural production is prerequisite to alleviation of rural poverty. But of itself, agricultural growth is not sufficient to eradicate poverty. Nor can it create adequate opportunities for enhanced rural employment, income generation and economic access to food. Two basic issues emerge when looking at the rural sector of the Asia and the Pacific Region.

First, the "frontiers" of horizontal expansion in agriculture have already been breached. There is little scope for bringing further land under cultivation. Consequently, the capacity of land to absorb a larger number of rural workers is nearly exhausted. This accelerates large-scale migration to already crowded urban centres, sharp increases in under- and unemployment, and a growing number of indigent population in the rural-urban twilight zone.

Second, the disparity between urban and rural incomes is sharper and the imbalance between urban and rural infrastructure, both physical and social, aggravated. Physical insecurity, economic deprivation, political powerlessness and spatial isolation of the rural poor persists, particularly for visual, mental, sensorial, or motor disabled people.

Burgeoning workforce and on-farm employment limits

The region's rural population increased from 1.4 billion in 1950 to an estimated 2.0 billion in 1990. Studies show no "emptying out" of the countryside in spite of urban drift. By the year 2025, rural population is likely to reach 2,200 million, along with a huge rural labour force. Inspite of impressive aggregate economic growth and modernization, differential between urban and rural incomes in some countries is as high as 10:1 and higher in some countries.

Prospects are bleak for countries depending mainly upon agricultural production, to absorb an increasing labour force. On-farm employment potential is diminishing. Relative purchasing power of rural populations is declining, cutting into their capacity to ensure adequate nutrition. Exports of primary products have shrunk or suffered in terms of monetary return due to inequitable trade regimes, inflation and other reasons.

The decade leading to the year 2000 is critical for the region, both in terms of economic growth and of human development. For large segments of population in the Asia-Pacific countryside, especially for disabled people, a broad range of actions to increase people's capabilities and opportunities through access to resources, education and training is imperative. Besides elimination of barriers to equal opportunities, investment is required to expand and diversify the economic base by forging linkages between primary production, services, processing industry and markets.

Agro-processing industries and employment generation

Agro-Industries in Asia and the Pacific account for 36% of total manufacturing value-added in developing countries of this region. The nature of larger agro-processing industries tends to be capital-intensive, poorly integrated with the indigenous agricultural sector and heavily dependent on imported raw-materials and technology. Some are characterized by monopolistic business practices. However, these industrial units offer the possibility of technology transfer and opening up of markets. There is need for complementarity between large and smaller indigenous agro-processing operations.

Dispersal of rural cottage industries and simple processing plants throughout the countryside, close to the supply of raw material, drawing labour from the farming community, increases linkages between agriculture and industry. Such dispersal enables farm family members to combine employment in industrial activities with agricultural pursuits. This in turn enables a farm family, particularly those supporting a disabled family member, to enhance and diversify its sources of income, scale down risks of income failure, obtain employment for a larger number of days per year. Skills acquisition increases their social mobility and adaptability. The disabled are given the opportunity to integrate into these units.

Employment objectives must be explicitly integrated into rural industrialization strategy. This calls for appropriate policies, technologies and supporting institutions capable of reaching the village and household levels, providing rural disabled entrepreneurs with necessary incentives. These can unleash doorman creativity without alienating producers from their setting.

Agro processing industries: an illustrative profile

Enterprises that process primary agricultural raw materials, are categorized as agro-processing industries. These include key commodities such as: cereals, legumes, oilseed, fruits and vegetables, root crops, meat and meat products; dairy and fish products, etc.

Agricultural residues and by-products provide significant opportunities for processing. For example, when processed, paddy yields rice-based food products, starch, syrup, and rice wine. From bran extract comes oil, de-oiled cake and cattle feed. Other non-food components of agro-processing include: animal by-products industries, leather tanning and processing, blood and bonemeal fertilizer, etc.

Food processing industries can be characterized as modern or traditional. Modern plants in developing countries initially centred on foods derived from imported meats, cereals and dairy products. In recent years, however, indigenous companies, often in joint venture with multinational corporations, are processing local raw materials: pineapples, cassava, fruits and vegetables, etc. Modern enterprises are highly sophisticated agro-industrial systems. Procurement, harvesting, processing, packaging, storage, distribution of products interlock. Market demand is influenced by a number of factors even external to the country in which they operate.

These enterprises operate within the boundaries of each country's particular socio-economic, administrative, political and financial framework as illustrated in Figure 1. They are often characterized by a complex web of products and by-products. A sugar system for example, can comprise a wide range of food products.

Traditional food industry

A wide range of ethnic and traditional food products are produced in countries of the region from indigenous agricultural raw materials. They constitute as high as 70% of food industries in many countries. Often family owned, they employ 50 or less workers and are labour-intensive, predominantly staffed by women workers. They suffer from low productivity, lack of quality control and little if any research and development. Thus, they offer scant competition to modern food processing industries. But there is scope to increased productivity and improve product quality through relevant support services. Disabled people can provide these quality monitoring services.

Livestock industries

Livestock systems in the region are usually smallholder crops-livestock farms, women contribute substantially to its operations. Rural women need special extension and training programmes to acquire skill and knowledge in the management and feeding practices, milk hygiene, disease control, storage, use of by-products record-keeping and credit. Disabled women can carry out many of these functions.

India offers an example where small producers and women increasingly play a key role in dairy cooperatives. As producing members they collect payment for supplied milk which they use for their households. The dairy development movement has had a profound educative effect and gives rural women strength. "Operation Flood" presents a model where dairy benefit millions of small milk producers. Disabled women can be among these.

Fisheries industries

In developing countries, both the local fish processing industry and establishment of a cold chain have lagged. Most fish is still consumed fresh. Traditional methods of preventing fish by drying, salting, fermenting and smoking, remain the prevalent forms of processing. These are practised primarily in households or in medium-sized, family-run enterprises. Pakistan and Thailand are major exporters of low-value, dried, salted and smoked fish. Disabled people can carry out these preservation operations.

Crustaceans and molluscs are traditional export products of several Asian and Pacific countries. Both volume and value of these products lag behind those of fish exports. The recent phenomenal growth of shrimp culture, however, significantly increased exports from the second half of the 1980's. The attention to detail in processing these can be carried out very well by disabled persons.

Almost 90 percent of crustaceans and molluscs, exported by countries of the region, are relatively low value-added products such as block-frozen, heads-on shrimp. Again, processors and re-exporters, located in more developed countries both within and outside the region,a re the main beneficiaries. Some shrimp and mollusc producing countries such as Thailand are exporting more value-added products, in consumer packs. These new products generate more employment and offer better marketability. The detailed work and attention needed for their preparation can be provided by disabled persons.

Forest products

Wood products

Increasingly scarce supply of raw materials has constrained optimum operation and further development of wood-based industries in many countries. Urgent consideration must be given to conserving forests, if wood supplies are to be sustained. Overall agro-processing strategy needs policies to encourage entrepreneurs into the small-scale forest business enterprises, as well as induce those already operational,to integrate vertically.

Non-wood forest products

Minor forest products or non-wood forest products (NWFP) provide considerable opportunities for augmenting local employment and incomes. In South Asia extraction and use of bamboo for furniture and handicrafts is ubiquitous. Resin and turpentine manufacture and distillation of lemongrass increases rural incomes in the Himalayan countries. Beedi leaves, medicinal plants, gum karaya, tannins, shellac, katha and cutch, are marketed commercially. Extraction of sal seeds and mahua seeds is gaining ground in view of their utilization as soap stock, edible butter and other uses.

Many forest goods other than wood are produced in continental Southeast Asia and in Indochina. Canes and cutch are produced in Myanmar; yang oil, gum damar, caphor, honey, resin and canes support rural industries in Thailand; honey, wood oil, wood resin, cardamom fruits, medicinal plants are produced from the forests of Cambodia. And in Vietnam, tannin barks are extracted from mangrove swamps, and wood oils from dipterocarp forests.

There is a growing awareness of the importance of other products from varied forests of the region. Millions of rural women process these products in handicrafts. There is no reason why disabled persons cannot do likewise. But there is a need for better organization of collection, processing and marketing of non-wood forest products. Increasing contribution of these products to domestic economies and world trade has high potential.

Some approaches to rural industrialization

High population pressure on limited agricultural land, low levels of investment in infrastructure and off-farm activities, as well as seasonal underemployment exacerbates the problem. Modern water-seed-fertilizer technology to increase production has been recently expanded. But this covers only a quarter of the farms. Even under the most favourable scenario, available land cannot absorb all surplus labour. Small-scale and cottage industries can employ millions of workers including the disabled. Food manufacturing, textiles, wood products, and post-harvest paddy processing are among the more important agro-processing activities. The potential of rural industrialization anchored to agriculture remains largely untapped.

Linkage between agriculture and rural enterprises in China is reflected in two axioms: There is no stability without agriculture, no vitality without commerce and no way to become rich without industry" and "Leave the farm but not the countryside. The impact of these enterprises varies from one region to another. In the agriculture zone they absorb surplus labour in increasing numbers, augmenting rural incomes.

Some issues affecting agro-processing industries

Markets
Developing countries must deal with market constraints before taking any policy and programme action. Realistic assessment of opportunities beyond cottage industries and import substitution processing enterprises, are required, followed by an active market development action programme. One effective approach is development of special market niches for products for which a country has comparative and competitive advantage.

Examples are herbal medicine, dipped latex, vegetable fractionated silk, jute and processed wood and furniture industries. Another possibility is cultivating non-traditional markets like the USSR, Central and Eastern European countries. Intra-regional cooperation between developing countries of the Region is another possibility which deserves to be further explored.

Organizational support
Organization of agro-industries varies between and within countries. Enterprises have different levels of sophistication and scales of operation. Employment-intensive and decentralized rural industries can benefit from non-exploitative linkages with sophisticated state-of-the-art enterprises. Liberating and mobilizing the initiatives of the rural poor, however, will require their ownership of and/or stake in enterprises they can call their own.

Human resource development
A skilled workforce is a prerequisite for successful agro-industrialization. In Asia and the Pacific there are wide differences in investment in education and training. Japan leads with high rates of enrollment in tertiary education, followed by the Republic of Korea and Singapore. Unlike other regions, however, vocational education, as a percentage of all education, has declined, imposing a limiting factor on agro-industrial development.

Renewing emphasis on vocational education would help provide a workforce capable of developing and using relevant local and overseas technologies for production of quality goods. Education and training of females is necessary in countries where their education falls short of that provided for males. Women are entering the workforce in unprecedented numbers. But their productivity and remuneration remain low, as they often enter the labour market untrained. Even more critical are the training needs of the disabled who will otherwise be further menginalized.

Support to entrepreneurs and managers
Entrepreneurs in the small-scale agro-processing sector are generally "home-grown". They acquire skills and leadership qualities in their own workplace, business environment and from traditions. Human resource development programmes, offered by training institutions, banks, technology centres and management development centres, often bypass these entrepreneurs especially when disabled. Making available entrepreneurial development services to these producers is a need that has barely been responded to. In designing these services, a two-way process is necessary, whereby supporting institutions and entrepreneurs engage in continuous dialogue. Such dialogue is essential, specially for remotely based agro-processing units where isolation and past neglect impose severe constraints on current skills maintenance.

Gender issues
Agro-industry resembles other sectors in that women are among workers brining home the lowest rates of pay. Among agro-industrial decision-makers, managers or supervisors, few women are to be seen. Women are much more often hired on contracts or under piece rate schemes, to avoid labour laws providing for maternity benefits, sick leave, minimum wages, etc. They have few choices. Most will often accept menial work in agro-industry at any pay. Poor rural women are far more vulnerable than men to exploitation in the he workplace. In all countries, women's wages lag well behind those of men, even where "equal pay" legislation applies. Disabled people and especially disabled women, are even more severely marginalized.

Investment in rural people
A prerequisite for an agro-industrial strategy that incorporates both employment and equity considerations, is investment in increasing human capabilities, and eliminating barriers to their access to resources, information and technology. This is vital for sustainable development. Skilled and knowledgeable people are in a better position to respond to incentives and opportunities, to help diversify economies and take up non-agricultural employment. Enlarging people's choices and economic opportunities will pre-suppose a technology and information base upon which they can draw.

Conclusion and some points for consideration

In the Asia-Pacific Region, agriculture's share in GDP is declining. Agro-processing maintains a high potential for boosting economies based on agriculture. This helps ensure growth with stability, and increasing rural incomes.

Agro-industry, in developing countries of the Asia and the Pacific Region, has been characterized by the pre-dominance of thousands of small-scale traditional units. More recently, large-scale operations have also established their bases in the region, to take advantage of abundant low-cost labour and available raw materials. In many member-countries there is considerable scope for upgrading traditional agro-products and small-scale rural processing establishments.

Cross-fertilization of experiences of member-countries within the region will be of immense help in this mutually beneficial learning exercise. Pooling of knowledge available in this region can contribute to formulation and adaptation of locally specific strategies. These strategies would address the needs of an overpopulated market of poor and often unskilled, also disabled rural labourers.

These groupings could foster an approach of positive competition among processing industries developed nationality to promote sub-regional and regional markets and facilitate reviews of existing trading agreements. Further linkages may also be developed with similar cooperative programmes in other regions to stimulate inter-regional cooperation and technology transfer.

By creating jobs and augmenting incomes, agro-industries offer a "MIDAS Touch" for the poor and disabled of Asia and the Pacific. Incidentally MIDAS can also stand for Meeting on the Integration of Disabled Persons in Agro-Industry Systems!

FAO has promoted the upgrading of traditional food technologies through its Regular Programme, as well as through TCP, PFL and a wide range of national and regional projects in specific food industries. As an illustration, a multipurpose rice processing facility was established in the People's Republic of China. A regional project established a Network on Small-Scale Food Industries Development. Now a country project proposal exists for mushroom production and processing by disabled people, which can serve as a model project for the region.


Empowering the rural disabled: Introduction | Women | Cambodia 1 | Cambodia 2 | Lao PDR | Sri Lanka | Thailand 1 | Thailand 2 | Vietnam 1 | Vietnam 2 | Agroindustry | Horticulture | Strategies



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