Generating broad-based growth through agribusiness promotion : assessment of USAID experience

The report reviews: the strategies employed in the programs (whether assistance focused on strengthening agribusiness support institutions, individual entrepreneurs, agribusiness markets, or, in two cases, promoting privatization); the design of the programs and the economic environment in which they operated; their effectiveness in expanding the agribusiness sector (including support organizations) and increasing nontraditional exports; effect on employment and income; cost-benefit ratios; and factors affecting program performance. The study found that the programs had generally succeeded in boosting agribusiness growth. The following are among the lessons learned. (1) USAID agribusiness programs should focus on improving the policy, regulatory, and institutional environment; assistance to individual enterprises should be secondary. (2) Foreign direct investment in agribusiness is an effective means of transferring production technology and developing export markets. At the outset, however, it is best to promote limited dealings between international and local firms, rather than try to establish fully owned foreign subsidiaries or joint ventures. (3) Contract farming is an effective mechanism for linking small farmers with processors and marketers. (4) Efforts to assist agribusiness cooperatives have not been encouraging, as many lack the will and ability to subject themselves to the discipline of free markets. (5) Although women benefited from the growth of agribusiness, they were not full and equal beneficiaries from the ownership of firms. (6) Improper use of pesticides emerged as a major problem. (7) USAID should specify early on when assistance will end and stick to that timetable. (8) Enterprise development should focus on the transfer of production technology and the establishment of export links. Includes bibliography.