The issue:

The development of agri-business infrastructure has a direct impact on agricultural productivity as it links smallholder farmers to domestic, regional and global markets and ultimately fostering sustainability, competitiveness, and increasing overall productivity of the agro-industry sector. Various types of agri-business infrastructure, such as irrigation, (cold) storage, feeder roads, power supply, and shared services for agro-processing facilities, are crucial for enhancing productivity. Strategic investments in these areas, including logistics and climate-resilient technologies, are directly linked to improving food security, eradicating hunger, and addressing financing challenges. 

Agricultural businesses need a safe and efficient transportation system to produce, distribute, and sell their products. Inadequate transportation networks and storage facilities contribute significantly to food loss and waste. This subsequently leads to substantial post-harvest losses, which in turn, negatively affect food security, farmers’ income, and competitiveness. Storage facilities, such as silos, warehouses, and cold storage, are essential for ensuring food security and eradicating hunger. They empower smallholder farmers by allowing them to negotiate from a position of strength, enabling them to decide when to sell their agricultural products to maximize income. This also grants them access to financing through innovative schemes such as commodity collateral financing, where farmers utilize certified stored products as a guarantee for loans.  

Inadequate market facilities, such as the absence of wholesale markets, collection centres, and agro-processing facilities, along with poor quality infrastructure, limit efficient trade. The lack of well-equipped markets reduces transparency, hampers price discovery, and restricts access to market information. Investing in market information systems and digital platforms can improve market transparency and facilitate informed decision-making.  

The aggregate effects of limited access to agri-business infrastructure undermine the value-addition process in agriculture by discouraging much-needed private sector investment. The lack of agro-processing infrastructure across most low- and middle-income countries (LMICs) disincentivizes investment in food production. It also makes it nearly impossible for food exporters to graduate from producing raw commodities to higher-value processed food products.   

Addressing these challenges is critical for unlocking the full potential of agri-business and trade. Governments should prioritize investment in transportation infrastructure, storage facilities, cold chain systems, and market infrastructure. Public-private partnerships (PPPs) can catalyse private sector investment and expertise, ensuring sustainable infrastructure development.  

Agro-industrial parks or zones are often seen as a strategic solution to address infrastructure challenges, linking farmers with processors, enabling value addition, and optimizing supply chains to boost productivity and market access. UNIDO is currently supporting their development in 16 countries, Ethiopia being a notable example. 

Regional collaboration and integration initiatives can also address cross-border infrastructure challenges. For example, the African Union initiated the Common African Agro-Parks Programme (CAAPs) to create regional agro-industrial hubs that would increase the supply of locally produced agricultural goods, reduce reliance on food imports and promote value-addition to agricultural commodities. The programme envisions the creation of five large agro-industrial zones across Africa.  

Similarly, the Alliance for Special Agro-Industrial Processing Zones (A-SAPZ) was created in 2023 to provide a financing mechanism for rural infrastructure. This financing platform has committed US$3 billion to expedite the development and execution of SAPZ projects across Africa.   

Objectives:

This session aims to:   

• Assess the challenges facing LMICs in developing agri-business infrastructure to support efficient practices and value addition.    

• Explore case studies and innovative approaches to agri-business infrastructure development aimed at enhancing productivity, competitiveness and sustainability.    

• Leverage these innovative approaches to help countries address infrastructure gaps and improve post-harvest practices. 

Key guiding questions:

• How can agro-industrial parks improve productivity, efficiency and sustainability in the agribusiness sector while also facilitating better linkages between smallholders, SMEs, and larger agricultural enterprises?   

• What innovative technologies and approaches are being/can be utilized to improve agri-business infrastructure and enhance market access?   

• How can investments in agricultural infrastructure be optimized through innovative financing mechanisms and PPPs to address the diverse needs of smallholder farmers, agri-businesses, and rural communities?   

Expected outcomes:

• Identification of key challenges of agri-business infrastructure in LMICs, and actionable strategies to address these gaps. 

•  Highlighting effective strategies such as the agro-industrial parks model, which delivers integrated agri-business infrastructure. 

• Development of concrete recommendations and policy plans to optimize investments in agricultural infrastructure, leveraging innovative financing and PPPs tailored to the needs of smallholder farmers and agri-businesses. 

Format and structure:

A keynote presentation and a high-level panel discussion will showcase solutions for mobilizing public and private capital for developing strategic agri-business infrastructure required for the transformation of food systems. 

Keynote presentation

on the role of integrated agro-industrial parks in food security and rural transformation

Moderator

Panelists