Dr. Derek Baker, Agricultural Economist and Team Leader of Changing Demand and Institutions, the International Livestock Research Institute (ILRI)
On Tuesday 22 January 2013, Dr Derek Baker of ILRI presented his work on “Primary Industry Knowledge Management: An Aid and Agribusiness Agenda”. His presentation highlighted increasing agribusiness opportunities across the globe due to changing demographics which impact consumers’ purchasing power and preference. These increase opportunities, however, challenge agricultural sectors especially in developing countries to improve their competitiveness requiring effective knowledge transfer not only between actors within the economy (between policy makers, scientists, traders and farmers) but also between countries including between developing countries.
Agro-industry (commonly defined as the processing, preservation and preparation of agricultural production for intermediate and final consumption) is believed to have a close link with socio-economic development and poverty alleviation in developing countries. Taking only into account countries where data is available the ILO calculates global employment in the formal food and beverages sector at 22 million.
It is generally accepted that as the economy grows the contribution of agriculture to the economy decreases as indicated by a negative correlation between GDP per capita and share of agriculture in total GDP. However, a closer look suggests that there seems to be a positive association between GDP per capita and food processing value added.
To promote agro-industry, there are some factors need to be taken into account.
First, changing demographics have shaped the current state of agricultural sectors across countries. From the demand side, increased income per capita has lead to increased demand for better quality and hygiene food commodities. From the supply side, migration including rural-urban, regional and international migration has affected labour sources resulting in shortage of agricultural labours.
Second, increased demand for land and resources have also affected farm resource base. In West Africa, the pastoral system was common in 1966. Limited land and other factors have shifted farmers to adopt crop-livestock systems. Globally, these mixed systems in developing countries contribute to 50 per cent of world’s cereals.
Third, there is an increasing trend in South-South trade. This represents not only increased economic partnerships between developing countries but also improved transfer of knowledge between them.
Fourth, markets and industrial changes are evident. Retail revolution is one of the most common topics addressed by recent studies. Some argue that supermarket penetration has not significantly affected fresh produce (e.g. dairy, beef, fruits) markets and there is not enough evidence to support the argument more sophisticated markets exclude less sophisticated producers. Further studies are recommended and should take into account the political economic context e.g. large producers to lobby governments.
Given the above changing nature of agricultural sectors, knowledge management is essential. Dr Baker viewed that there should be a shift from “technology transfers” to “what works?” and “in which combinations?”.
In all research projects in developing countries, there is and will always be an issue with capacity building indicating the importance of training. In many cases, a top-down approach might not be suitable. To develop a successful project, a multi-disciplinary team is normally required to provide a comprehensive understanding of the agricultural issues. It is also important to use local knowledge management by considering partners’ comparative advantage, student and staff exchange for capacity building, and building commercial links.
Upcoming projects should focus on current issues such as value addition, competitiveness; risk management and preparedness; scale-ability and roll-out. They must also carefully take into account private sector management entrepreneurs.
Dr Baker presented a case study from his work on livestock revolution. Positive GDP growth has been significantly associated with population growth and urbanisation. Those factors have led to an increase in demand for animal-source food promising agribusiness opportunities. Such a project requires use of multiple methods from household-level data analysis, consultation with industry actors to a consumer questionnaire-based survey and ‘beyong markets’ analysis. Increasing demand for a user-friendly analysis tool has driven the development of various computer softwares, for example to draw complex value chains.
The remaining challenge is how to effectively communicate those research findings to smallholders and help them translate this improved access to knowledge and information to improved livelihoods.
Bio: Dr Derek Baker (http://www.ilri.org/user/87) leads the International Livestock Research Institute’s (ILRI’s) team on Changing Demand and Institutions. This multidisciplinary team focuses on consumer economics, informal markets, agroindustry and the value chain, in the context of pro-poor development. Prior to working at ILRI, Derek initiated and ran the agribusiness innovation research program at the Danish Institute of Food and Resource Economics in Copenhagen, Denmark. He spent 12 years in Central and Eastern Europe, and throughout Asia, as a consultant with the World Bank and biltateral funding agencies, and with private clients. Originally a farmer and agribusiness consultant in New Zealand during the pro-market reforms of the mid-late 1980s, Derek has worked in over 40 countries at the interface between markets and policy, and with economic adjustment at the firm, farm and collective action levels. He holds a first class honours degree in Animal Science and Farm Management from Massey University, and a PhD in Agricultural Economics from the Pennsylvania State University.
This article is prepared by Risti Permani and subject to her personal view.