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Processes of agro-industrialization have widespread and profound impacts at both micro and macro levels. These include contributions to overall economic development, alongside changes in rates of poverty linked to the scale and distribution of changes in employment and per capita incomes among those whose livelihood is linked to the agro-food economy. These processes also encompass the quality, availability, and price of food and non-food products, plus impacts on natural resources and the environment, and sociocultural implications, among others. Thus, we might reasonably expect there to be gainers and losers from processes of agro-industrialization, such that there are likely to be significant distributional consequences of the emergence of an agro-industrial sector.
What is critical in this context is to recognize and promote the conditions under which agro-industrial enterprises can make a positive and significant contribution to overall processes of economic development and to the betterment of the lives of the poorest members of society, while minimizing any negative externalities and other impacts. Given that agro-industrialization is but one of the multiple transformations occurring in agro-food systems in developing countries, as well as globally, attributing observed changes to the development of an industrial agro-processing sector per se is difficult. Further, these impacts reflect the ongoing dynamics of development processes, for example, the transformation of a predominantly Informal to a predominantly formal economy, and observations at any point in time merely provide a ‘snapshot’ that is soon outdated. The impacts of agro-industrialization on value addition, exports and employment are treated at length in Chapter 3 of this volume. We will instead all attention to the effects of agro-industries on two specific aspects: power relations along the supply chains and environmental consequences of agro-industrialization.
