Journal of Agribusiness 18,2(Spring 2000):173S187 © 2000 Agricultural Economics Association of Georgia The Role of Agribusiness in Development: Replacing the Diminished Role of the Government in Raising Rural Incomes

With increasing efforts to promote free markets, one must ask whether the impact on some agricultural producers may be less than desirable. Small producers with limited access to capital, technical assistance, and competitive buyers may be unable to participate in new marketing opportunities. Without recommending a return to heavy government, this article suggests development policy be enlarged to encompass agribusiness enterprises. Localized agribusiness can help rural populations capture value added that is otherwise lost to external agents. This may require, however, a different governmental role, primarily in the provision of basic infrastructure, transparent policies, and the continued emphasis on availability of capital and technology. Key Words: agribusiness, agroindustry, development strategies, economic reform, nonfarm income, public policy, rural income, smallholder agriculture A significant worldwide trend in public policy in recent years has been to disengage decades of direct government involvement in the agricultural sector. Price supports, input subsidies, and publicly owned agriculture-related institutions have bee