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Agro industrialisation: Bridging the rural-urban divide

Agro industrialisation: Bridging the rural-urban divide

In recent years, a rapid intensification of agriculture has escalated global food production. In order to meet the increasing worldwide demand for food the amount of land committed to agricultural activities has increased, so too has the use of innovative technologies, data, and strategies, all of which have drastically improved efficiency and productivity on farms. For the most part, these changes have been beneficial in satisfying a growing global demand for food. However, the benefits of this transformation are often unevenly dispersed. The overall increase in agricultural productivity has primarily benefited urban and technologically advanced regions, while rural areas have lagged behind.

What has followed is a growing rural-urban divide, where rural areas disproportionately face challenges related to agricultural productivity, economic opportunity, and access to services, leading to poor agricultural development, food insecurity, and poverty. These issues form a vicious cycle, where limited access to technology and infrastructure compounds poverty and reduces opportunities for economic growth in rural communities.

To break this cycle and bridge this divide, agro industrialisation is key. Rural communities require targeted development programs and policies that improve access to modern agricultural technologies and enhance farming practices, ensuring equitable growth in productivity. In this article, our experts discuss how this process can be enacted, the benefits of it, and the challenges that developing countries must overcome during this process.

What is agro industrialisation?

Agro industrialisation refers to the industrialised production of agricultural products such as livestock, poultry, fish, or crops, typically on a large scale and capital-intensive basis. By integrating agricultural production with industrial processes, it seeks to create a more efficient and streamlined food system that enhances value added agricultural activities.

Agriculture remains the primary industry in rural regions around the world and is closely linked to the economic well-being of these communities. By integrating primary, secondary, and tertiary sectors, agro industrialisation allows rural farmers to develop beyond small-scale and subsistence farming. This approach means that farmers can adopt modernised farming practices and add value to their products, leading to increased productivity. This process not only enhances job opportunities but also boosts income levels in rural areas, contributing positively to the economic development of these regions.

For these reasons, agro industrialisation has become an increasingly popular government strategy to achieve rural empowerment in low- and middle-income countries. Governments are introducing more conducive rural development policies and putting in place incentive structures and complementary investments to ensure that rural populations benefit from growth, both through increased consumption and higher incomes.

Recent examples of strategic agro industrialisation can be found throughout Africa, with Ghanaian, Senegalese and Kenyan governments supporting the construction of agro industrial parks in rural and peri-urban areas to stimulate agricultural production and support rural smallholders. In the European Union, rural development policies have directly targeted agricultural competitiveness and the empowerment of rural farmers. Further examples from China have showed how rural industrial convergence and urbanisation has collectively contributed to economic development and narrowing income gaps among farmers.

Bridging the rural-urban divide

There are several ways that agro industrialisation can bridge the rural-urban divide, including:

Economic growth: Agro industrialisation can stimulate economic growth in rural areas by adding value to agricultural products. This can attract investment, improve infrastructure, and increase income levels, narrowing the economic gap between rural and urban regions.

Job creation: Agro industrial activities create employment opportunities for rural communities. This in turn reduces rural-urban migration, as it provides people with sustainable and local livelihoods. The expansion of agro industries is also crucial for the development of skilled and semi-skilled jobs, particularly in developing countries that are becoming more urbanised.

Market access: Developing agro industrial infrastructure such as processing plants and transportation networks improves market access for rural producers. This enables them to sell their products beyond local markets and gain access to urban and international markets.

Technology transfer: Agro industrialisation often involves the adoption of modern technologies and practices, which can lead to knowledge transfer and skill development in rural communities. This not only enhances productivity but also fosters innovation and entrepreneurship, contributing to rural development. It can lead to significant technological development, including the use of information and communications technology (ICT) and the digitisation of the supply chain, which can enhance policy and decision-making in the agricultural sector.

Sustainable development: Industrialisation contributes to social development in rural areas by providing access to education, healthcare, and other essential services. This improves the overall quality of life in rural communities making them more attractive places to work and live in.

Challenges and barriers

While agro industrialisation can contribute heavily to rural empowerment, several key challenges remain that must be addressed at a policy level to see success.

One primary challenge is the need to create an enabling environment for agro industrialisation. This includes the development of effective policies, regulations, and institutions that support the growth of agro industries. It also requires the development of appropriate infrastructure, such as agro industrial parks, to support the growth of agro industries and the development of rural areas.

Another key challenge is the need to ensure that rural development is aligned with environmental sustainability goals. This includes addressing climate change, as agricultural production is both a contributor to climate change and vulnerable to its impacts.

Agro industrialisation requires the development of new skills among rural farmers and for off-farm activities such as food handling, packaging, and marketing. This involves creating suitable education and training programmes, providing access to finance, as well as other support services.

Finally, agro industrialisation requires the development of multistakeholder collaboration and public-private-partnerships, including governments, private sector firms, civil society organisations, and communities. Such systems require long-term strategic foresight and the development of effective mechanisms for coordination and collaboration.

Leverage our development & impact insights

The successful implementation of agro industrialisation in developing countries requires a strategic and coordinated approach that addresses the various associated challenges and opportunities. This requires the development of effective policies, as well as infrastructure, skills, and capabilities among rural populations.

Farrelly Mitchell offers strategic and tailored guidance to public and private industry stakeholders looking to empower rural agriculture and improve value added activities, including governments, NGOs, multilaterals, businesses, and private investors.

Our developmental specialists have decades of experience supporting agricultural growth throughout the global south. We help policymakers build robust regulatory frameworks that facilitate rural development, investment, and innovation. We can advise on the design and management of agro industrial parks, improve market linkages for smallholders, and support institutional development in developing countries. To learn more about our services and help bridge the growing rural-urban divide, contact our experts today.


Nathan Davies

Managing Director
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