FAO Agribusiness Roundtable: Small and medium agri-processing enterprises competitiveness challenges in central and Eastern Europe
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Rapid urbanization and commercialization of agriculture is increasing the demand for processed agricultural and food products, and as a consequence eff ectively excludes farmers from direct participation in markets. On the one hand, farmers (particularly small farmers) faced with pressures from the agro-industry to supply raw materials in required quantities are experiencing diffi culties integrating into value chains. On the other hand, local agroindustries, challenged by global and reg ional competition and the need to comply with international regulations, are also experiencing diffi culties in establishing their position in the supply chains of multinational retailers, which if they could achieve, would enable them to pull the demand for local agricultural products. Small and medium sized agri-processing enterprises are responsible for generating a large share of products and services in the agricultural sector and play a critical role in increasing demand for raw ma terials. They create income and employment in rural areas where the opportunities for employment are frequently sparse. Small and medium sized agri-processing enterprises (SMAEs) can play a critical role in creating rural income and employment opportunities, through the demand they create for raw material supplies from smaller and medium scale farmers. SMAEs that are appropriately capitalized and managed can produce high quality branded and labeled products, which can increase export r evenues and reduce reliance on imported products. However, there are major constraints that must be addressed in order to realize the full developmental potential of SMAEs.