These examples illustrate the lack of a competitive agro-processing sector in many developing countries, despite their comparative advantage in agriculture. Agro-processing refers to the addition of value to raw agricultural material through product transformation; postharvest grading, sorting, washing, and packaging; and storage and distribution.
Why is agro-processing so important? The middle segment of value chains — including processing, logistics, and wholesale — makes up 30 to 40 percent of the total value added. Growth in the agro-processing industry creates opportunities to reduce poverty and transform the economy.
- Each additional job in agro-processing creates 2.8 more jobs in the wider economy.
- Each agro-processor purchases from numerous smallholder farmers.
- Smallholder farmers often lose 50 percent of their harvest to seasonal gluts; therefore, agro-processing creates value from what might have been lost to spoilage.
The World Bank Group’s Agribusiness Entrepreneurship Program accelerates the growth of pioneering agribusinesses in developing economies. Since its establishment in 2014, the program has launched Agribusiness Entrepreneurship Centers — business incubators and accelerators for agro-processing entrepreneurs — in Tanzania and Nepal.
To learn more about the program's strategy and entrepreneur success stories, explore the Agribusiness Entrepreneurship Program brochure.