International Agribusiness Forum

EMRC:

Kampala Uganda,

October 3th -6th, 2010

Who are SME

Up to 60% of the food commodities are produced, marketed and processed through the informal sector

CategoriesFarmers/farmer groups

Traders/wholesalers/…..

Agro=processors (millers, bakeries, ….)

Exporters –mainly niche markets

(input suppliers –stockists, seed producers, mechanics………)

Profile of SMEs family business; with friends; farmer groups

Started small, sometimes not even planned

Large seasonal variation in business and employment

Development potential of SMEs

Can be critical in driving agricultural sector modernization and transformation

Create market demand pull needed to get farmers to produce more

Contribute to food security through better distribution/ reduction of transaction cost affordability

Reduce post-harvest losses plus value addition

Better matching with specific needs of specific buyers

Processing, packaging, preservation of raw materials and fresh products

Income and employment creation

competitiveness challenges

1. Small volumes/inconsistent supply

2. Limited product differentiation, branding

3. Challenges in quality management and compliance in standards

4. Supply chain inefficiency and logistics –lack economies of scale

5. Limited capital development and access to finance

6. Limited professional associations and alliances

Issues of concern

Management practices, access to technologies and capital, logistics often not competitive with larger firms and international corporations

High transaction costs and risks threaten profitability and survivability

Challenged in responsible business practices

Unreliable to farmers and employees

Issues of concern (2) Weak policy and institutional support, including

technological support

Fall between mandates of agriculture and commerce ministries, …………

Interests often not well represented by private sector federations and organizations

Poor infrastructure especially in Rural areas e.g. Power – major problem;

Many regulations and registration procedures

Opportunities Infrastructure development support

Innovative agribusiness policy strategies and advocacy to support entrepreneurship

Regional collaboration – Enhanced competitiveness in regional markets

Improved access to support to services eg support to rural growth centres, economic growth corridors, clustering/zoning