ENTREPRENEURSHIP IMPERATIVE FOR AGRIBUSINESS DEVELOPMENT IN PAKISTAN

HAMMAD BADAR
(Lecturer, Deptt. of Marketing & Agribusiness, Univ. of Agriculture, Faisalabad)
&
DR. KHALID MUSTAFA
(Professor & Chairman, Deptt. of Marketing & Agribusiness, Uni. of Agri. Faisalabad)

Mar 16 - 22, 2009

In developed world, the agribusiness sector plays a pivotal role in rural development, in addressing social issues of poverty reduction, in economic growth, and in environmental conservation. This sector provides inputs and services needed for on-farm and industrial production and markets for end consumption. Agribusinesses provide important employment opportunities in rural areas and contribute to the growth of larger private sector.

Agribusiness sector in Pakistan primarily consists of small enterprises wherein more than 90 percent of farmers are small and medium. They rely on their family labour and small rural businesses for their livelihood.

In Pakistan, agribusiness sector is also gaining its roots in the rural areas of the country due to commercialisation of agriculture and changing consumer needs in urban areas. Furthermore, the fast changing socio-economic scenario at the global level, trade liberalization impacts on Pakistan's agriculture, significance of quick access to information and exposure to products, technologies and marketing opportunities have also necessitated the development and expansion of agribusiness sector on modern and commercial lines. Although share of agriculture in the Gross Domestic Product (GDP) of the country is declining but it is still the single largest sector that contributes 21 percent to GDP and employs 44 percent of the workforce.

More than two-third population of Pakistan lives in rural areas and their livelihood continues to revolve around agriculture and allied activities. Like many developing countries, poverty in Pakistan is largely a rural phenomenon; therefore, it becomes imperative to develop agribusiness sector and provide work opportunities in rural areas by strengthening agribusiness sector.

The strong performance of smaller businesses, innovations in technology and new opportunities in value-added agriculture are giving rise to new micro and small businesses in rural areas not only worldwide but in Pakistan as well.

The foundation for the success of an agribusiness highly depends on efficient, effective and trained entrepreneur capable of running the small and micro rural enterprise. In this modern world, fostering agricultural entrepreneurship is now considered an important aspect of agricultural, economic and community development. It is generally accepted that rural enterprise development can make significant contribution to rural GDP, employment, family income, food security, nutritional intake and diversity, and community welfare.

Rural enterprises relating to agribusiness managed by modern and progressive entrepreneurs can make special contribution to output, profitability, productivity and sustainability of agriculture sector in Pakistan. The agribusiness sector offers vast opportunities for exploring new venture in agricultural supplies, farming and food sector. This may attract many entrepreneurs towards this sector. However, certain pecularities and technicalities of agribusinesses make it a challenging venture as compared to other businesses. Many budding entrepreneurs even agricultural graduates generallly keep researvations in venturing into this sector.

This is largely due to weak entrepreneurial culture, increased preference for settlement in urban areas, lack of facilities in rural areas, non availabilities of training opportunities in business planning and developing marketing links, difficulties in accessing credit facilities and inadequate government support. The rural masses due to their certain socio-economic constraints remain stuck up with the traditional agricultural practices. The major part of our rural communities is illiterate and lack of resources to start their own small agribusiness on modern business. Consequently, majority of the rural communities are trapped in 'grow-eat-grow' cycle and remain deprived of many basic amenities of modern life.

There is a need to impart entrepreneurial skills in farmers in order that they can tap diverse marketing opportunities in their local communities and in the global markets. Entrepreneurship is an incredible force and engine of growth. It is merely the assumption of risk and responsibility in designing and implementing a business strategy. Entrepreneurs are the people within communities who organize, manage, and measure the risks of a business or enterprise and are essential to building the economies of urban and rural areas across the country.

Rural areas conventionally lost their young people to big cities in pursuance of some good opportunities. Majority of these people can earn more income in the rural areas where they have resources and links provided entrepreneurial skills are inculcated in them. The rural entrepreneurs create income opportunities not only for themselves but also for other landless and deprived classes of rural communities. Hence, there are enormous spiral and multiplicative effects of entrepreneurship in agribusiness that can contribute to improved living conditions and standards in rural areas. In the case of rural enterprises in particular, an additional benefit is creation of incentives to stay in rural areas rather than migrate to cities.

It is now the time to inculcate agribusiness entrepreneurship in order to break vicious circle of 'grow-eat-grow' by removing financial constraints faced by the stakeholders and accelerating adoption of new technologies by the prospective investors. Given that the rural based micro-enterprises perform an important role in the economic development of the country, it becomes imperative to understand their entrepreneurial needs in order to ensure that these can thrive and grow in the long run.

The agribusiness entrepreneurship culture can thrive in Pakistan if budding rural entrepreneurs are provided encouragement and incentives. Support strategies include entrepreneurial skill development and sensitization in rural and peri-urban communities by imparting education and training in business planning; assisting start-ups with regulatory and technical problems; providing access to capital and rural product development, branding, promotion and marketing at national and international level through effective and efficient supply chain development.

The inculcation of agribusiness entrepreneurship can play a powerful role in the economic well-being of rural and peri-urban communities of Pakistan by employing local resources and networks for the improvement and development of local products and rural business. Furthermore, rural entrepreneurship may be highly instrumental in jobs creation, income and wealth generation and improvement in quality of life and well being of rural masses.