Topic Name: Introduction to Agribusiness Articles

Subject Name: Introduction to Agribusiness

Course Code: BBAA 309

Submitted By: Adeel Khan

Submitted To: Sir Manan Aslam

 DAWN
A profile of micro agribusiness
Manan Aslam | Shafqat Rasool Updated August 05, 2013

THE present status of rural entrepreneurs was recently highlighted

during a training program organized by the University of Agriculture,
Faisalabad.
The focus of the exercise was to share current trends and
contemporary ideas in managing rural entrepreneurs for improving
agricultural sector in the Asian countries. Participants from the region
attempted to formulate a policy for providing input to policymakers so
that agriculture could be developed, and, for which, improving
performance of rural entrepreneurs was necessary.
Traditionally, agriculture was taken as a family line of work rather than
a commercial activity. This is why the sector and its related activities
could not develop fast on a sound basis. And as such insufficient
investment flowed towards this sector.
The agribusiness principally comprises micro-enterprises. The average
small-town venture has slightly more than the two workers. On the
other hand, a village enterprise employs an average of 1.74 workers
including hired labor, paid and unpaid family workers. Just three per
cent of the non-farm enterprises in small towns and one per cent in the
villages have more than five workers. A sizeable majority of labor in
town and village enterprises comprises family workers. Almost 24 per
cent of small town enterprises report hiring of workers, compared to
merely 12 per cent of village enterprises.
Agriculture is moving towards business activity and agribusiness sector
is gaining its roots in the rural sector attracting many entrepreneurs.
However, given some peculiarities and technicalities in agribusinesses
many potential entrepreneurs are shy in venturing into this sector.
The success of an agribusiness largely depends on well-organized,
effectual and qualified entrepreneurs capable of running small rural
enterprises. Encouragement of rural entrepreneurship is an imperative
aspect of rural economic and the community development. There is a
need to impart entrepreneurial skills to farmers so that they can tap
various marketing opportunities in their local communities.
It is the time to inculcate entrepreneurship in rural localities and to pull
them out of ‘grow-eat-grow’ cycle by extending financial support and
promoting new technologies.
One of the key factors for economic development and well-being in the
rural localities can be rural entrepreneurship — an activity that
introduces a new product, creates or serves a new market or employs a
new technology. Given that the rural-based agricultural enterprises can
play a key role in the economic development, it is essential that they
flourish and develop.
The rural society is facing challenges of high population growth rate and
youth migration to urban areas. These societies are usually
characterized by a low educated and less skilled workforce and weak
entrepreneurial culture. A majority of rural economic development
programs and strategies do not focus on business retention,
development and establishment of new business through
entrepreneurial skills. Supporting local rural entrepreneurs is thus
crucial as they utilize local resources, improve accessibility of products
and build networks. Moreover, rural entrepreneurship will create jobs,
accelerate incomes, generate wealth and improve the quality of life and
well-being of rural communities.

From the viewpoint of rural development, the greatest benefit of an

enterprise creation comes from improvement in efficiency, expansion
of total output and diversity of the productive base. Rural
entrepreneurs create income opportunities not only for themselves but
also for other landless and deprived classes. In the case of rural
enterprises in particular, an added benefit is to be able to reside in rural
localities rather than migrating to urban areas.

With the decreasing share of agriculture in the gross domestic product,

it becomes more important that opportunities in the agricultural sector
should be explored. There is a dire need to give work opportunities in
the rural localities by intensification of agribusiness sector.

Rural development has been a primary agenda of many governments,

non-governmental organizations (NGOs) and academic institutions.
Various programs and initiatives have been undertaken for accelerating
the pace of development in rural areas. However, these programs could
not bring significant changes due to lack of tested sustainable models
which are generally based on the subsidies and grants whereas
entrepreneurship development is based on the skills and business
plans.

The writers are faculty members at Institute of Business Management

Sciences, University of Agriculture, Faisalabad.