Governmental Policy on Agro-Industry For The 21st Century Distinguished Guests

Abstract

During the past decade, this country has witnessed rapid economic change of a ftuidamental nature as a consequence of a carefully planned National Development Program. Our economy has undergone a structural change which has been characterized by a relative decline in the contribution of agriculture to the Gross
Domestic Product (GDP). In the seventies, agricultul'e's share of the GDP was slightly less than 50 percent. By the nineteen eighties, this share had fallen to arotuid 20 percent of the GDP. During the same period, the industrial sector increased from around 9 percent to about 20 percent. It is important to note, however, that the share of the labor force active in agriculture remains quite high despite the sector's declining role.

The 66 percent of the total labor force employed by agriculture in the seventies decreased slightly to around 50 percent in the 1990s. At the same time, the generation of meaningful employment by the industrial sector has not achieved its target, rising from about 29.5 percent in the seventies to only about 36 percent in
the 1990s. As a result, the industrial sector has not been very successful ill absorbing the labor that has been displaced form agriculture. Furthermore, it is reported that about 60 percent of a products cost is allocated in the urban industrial sector because of its‘ more intensive capital investment. As a result, special strategies need to be formulated in order to facilitate the absorption of labor displaced from the agricultural sector which cannot be immediately integrated into the mdustrial sector. Therefore, the development of rural agro-industry becomes a virtual necessity.