“Sustaining Development”: Promoting Agribusiness and Entrepreneurship Development to Eliminate Poverty

Introduction

Elimination of poverty from the society and within people has always been a top priority for the United Nations (UN). Even we look back in the history, United Nations have been encouraging member nations to eliminate poverty within their regions, since its establishment. With the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the UN emphasized on eliminating poverty and hunger. Over the years, the UN began its focus on access to basic services. The UN focus on elimination of poverty can be easily seen from the former Millennium Development Goal (MDG), which tasked the nations to half poverty, “between 1990 and 2015, the proportion of people whose income is less than one dollar a day.”

Adoption of MDG’s gave a priority for the member nations to eliminate poverty within the society, which led to a reduction in the number of individuals living in extreme poverty which resulted in massive reduction of people living with less than 1$ a month from 1.91 billion in1990 to approximately 1 billion in 2011. With substantial population still living under 1$ a day, eliminating poverty continues to pose a grave threat to our community and thus a top priority for member nations and the UN.

The United Nations continued efforts have been accurately described in Sustainable Development Goal (SDG), which states to “end poverty in all its forms everywhere.”The UN and international communities are ensuring ways to eliminate poverty by the 2030, “all men and women, in particular the poor and the vulnerable, have equal rights to economicresources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance.”

To eliminate poverty, the UN as tasked other agencies and international aid organizations to have a multifaceted approach and eliminate poverty through different topical areas.Agencies such as the United Nations Industrial Development Organization (UNIDO) is committed towards eliminating povertythrough capacity-building, entrepreneurship and private sector development, and through promotion of industrial development.

Role of Agribusiness in Poverty Reduction

An agribusiness is a system whichcomprises all the industriesthat are involved in operations “from farm to fork.”Agribusiness includes operations from “supply of agricultural inputs, the production and transformation of agricultural products to their distribution to the consumers.” In regions with high rates of poverty,almost 80% of individuals generate their primary income fromactivities related to agribusiness.

In rural areas, more than 40% of the produced agriculture output is lost due to an inefficient chain of workings. In developing nations alone, agriculture products are almost 50% of the entire exports products; also only 30% of these exports are processed goods, which is 98% for industrialized nations. This gap of 68% represents tremendous loss in the agribusiness sectordue to the large chain of inefficiencies in the developing countries. Thus, a major portion of the exports are of unprocessed agriculture products, which have lower economic value as compared to the more and better processed ones.An effective agribusiness sector will result in better output and thus makes this sector efficient than others, and will further result in increased capability of processing from the industries, which will further bring economic stability to the workers in unit cost of processed agricultural products.

Role of Entrepreneurship in Poverty Reduction

Another tool that we can use to eliminate poverty is Entrepreneurship. Entrepreneurship comprises of activities in the field of business, ranging from production of goods, services, business enterprise to delivery of goods, services and delivery.An environment that promotes entrepreneurship leads to the development of small and medium-sized enterprises (SMEs).Today, SMEs account of about 90% of business worldwide and generates more than 50% of the employment. Sectors which are predominantly under the SME’s create an environment of better and secure jobs within the market and helps in reducing poverty.SME’s play a very important role in strengthening the nation’s economy, especially because they are the key in transitioning from a primary agriculture based organization to an industrial one.

To eliminate poverty in developing nations such as India, agribusiness and entrepreneurship development will be the key factors regional and central government have to use while addressing poverty alleviation. Not just it, member nation should use agribusiness and entrepreneurship development in numerous ways, to begin with is using the two factors in developing training programs to promote entrepreneurial activities and provide best industry practices to local practitioners. Also, international aid organizations and other non-governmental organizations shouldassist member nations in developing strong and efficient manufacturing techniques, (especially in the agribusiness sector and related sectors) such as the textile industry, forest products industry, and leather industry, in areas which are underdeveloped and industries such as these are neglected.

Technical Development and Advocacy for Agribusiness and Entrepreneurship Development

International aid organizations and non-governmental institutions should provide adequate training programs and technical assistanceto improve technical industrial expertise.United Nations should provide best training programs and awareness towards the existence of these programs to member nationsin order to build up the best technical knowledgeand improved working practices and generate best quality.

It is also important for international aid organizations to understand that training programs and mechanisms for capacity building should not be limited to agribusiness to entrepreneurship development.No long ago, UNIDO partnered with the oil giant Chevron, the Angolan Ministry of Education, and UNDP Angola and developed a curriculum for Angolan youthsin an effort to introduce them to the private sector and other business development entities.As of today, 400 teachers have been trained to teach students on entrepreneurship, while more than 10,000 students have undergone technical training and various other training programs in pilot schools.

Although, with the advancement in the technological sector, it is imperative for international aid organizations such as the UNIDO to double the number of training and capacity building mechanisms,as the need for these programs continue to increase in the world as we speak.However, with increasing demands of such training and development programs, international agencies face numerous issues in resources, manpower, and readily availability of experts, thus, it is very important for agencies to joint their efforts with private sector entities, CSOs, and other international organizations in order to increase rapid delivery in other regions of the worldespecially in the developing world.

Additionally, it is very difficult to maintain the strong chain of technical expertsright after the completion of technical courseware as most of the times the experts do not stay longer due to security and other reasons.To tackle such post training difficulties, UNIDO created the Programme for Country Partnership (PCP), which sought to engage state governments and other localstakeholders in training sessionsin order to decrease the fragility which often occurs after the training sessions.Wide deployment of PCPacross all the developing regionswill surely help in distributing technical knowledge to various local practitioners.

Accessing Financials and Sustainable Environment for easy working

Seeking financial assistance for agribusiness and entrepreneurship development is necessary both for the stakeholders and program managing organizations. The 2012 report of FAO highlighted “access to capital as an often-overlooked factor necessary for growth of an agribusiness sector. SMEs are often cash-constrained, so access to capital is important in the early stages as these new enterprises seek to achieve economies of scale and get their products to market”.

To remove the barriers of financial outreach, international aid organizations should conduct a joint program with SME and other private and public entitiesto help increase investment opportunities for small business entities.SME “are sectoral and geographical concentrations of enterprises that produce and sell a range of related or complementary products and thus face common challenges and opportunities.”

Development of SMEin agribusinessenhances opportunities for local bodiesspecialise and provide further opportunities to the stakeholders involved. UNIDO’s cluster development program was largely successfulespecially in the food processing and milk processing plants in Pune, India, along with milk production units in Nicaragua. This program was quite successful in reducing loss and efficiency of the products.

To bring necessary funds for the development of agribusiness industries and small scale business holders, involvement of international agencies should be a must. SME’s can attract financial assistance through rural schemes and rural banking, developing risk management systems for the SME’s, and encouraging financial aid to SME’s through traditional means (barter system)which will enable small agribusiness enterprise grow and expand their reach.

Beside capital, the stability of infrastructure and the climatic conditions both are necessary for the SME to prosper.A variety of factors include climate, some aspects of property rights and good governance.It is also important for the SME to maintain good relation with the investors, maintain confidence which will also help in attracting good capital.Moreover, governments can benefit heavily from increased entrepreneurial and agribusiness development through public investment and establishment of training programs.

Conclusion

Maintaining strong efficiency in agribusiness and entrepreneurship development is very critical for poverty reduction.It is without a doubt that UN’s eradication of poverty in all areas continues to be a priority for all member nations, however agenda’s like these should not be limited to the UN itself; still today, a significant member of the society isliving under poverty.Increased productivity and efficiency in the agribusiness sector gives opportunity for higher wages, which further reduces the losses in the value chain and creates much brighter aspects for the society. Entrepreneurship is always a best way to close the industrial development gap between wealthy nations and poverty.

It is not just for UN but many other independent agencies have come together to tackle inefficiencies in agribusiness value chain and entrepreneurship in the world; still more improvement is yet to be done. Policies with respect to agribusiness and entrepreneurship should be well defined and straightforward.Industrial development in agribusiness development and entrepreneurship should be defined. Moving ahead, it is important for international agencies to promote entrepreneurship and reduce inefficiencies in agribusiness while ensuring inclusive growth, especially within the vulnerable groups, this is very much necessary for eliminating poverty.

 

About the Author

Anant Mishra is a Former Youth Representative to United Nations. He has served in number of committees as the United Nations General Assembly (UNGA) and United Nations Security Council (UNCS)

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