A growing number of international businesses and local enterprises are influencing value chains dynamics.
Photo: S. Richter/Rural 21

06.12.2012

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In the last decade, the scale of agri-business in the world economy has increased at a considerable pace, given the increasing demand for food due to demographic growth, the change in consumption patterns in emerging economies and the use of crops for green energy.

In particular, over the past decade, market demand for sustainable agriculture products has grown at a high rate, including several sectors experiencing growth of 40 per cent per annum over the last five years (e.g. the forestry and coffee sectors).

This market growth offers the possibility of new, higher value and more stable trading relationships for producers’ organisations and for small and medium enterprises (SMEs) in developing countries. It represents a potential gateway for poverty reduction and development. In this context, a growing number of investors, international businesses and leading local enterprises are increasingly influencing value chains dynamics and market growth. More and more sustainable agriculture SMEs in developing countries are investment targets. Impact investors see a significant opportunity to invest based on financial returns, a perceived reduced exposure to risk, and the generation of social and environmental benefits. This trend is essential for increasing and expanding agriculture SME finance.

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