Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific
Recent increases in the prices of agricultural commodities have spurred a surge of private investment into farming and agribusiness. Given the right types of large-scale investment, this can have a transformative effect in underdeveloped rural area...
| Main Authors: | , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/08/18286955/investing-agribusiness-retrospective-view-development-banks-investments-agribusiness-africa-southeast-asia-pacific http://hdl.handle.net/10986/16660 |
| id |
okr-10986-16660 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO MARKETS ACCOUNTING AGRARIAN REFORM AGRICULTURAL COMMODITIES AGRICULTURAL INVESTMENTS BALANCE SHEET BALANCE SHEETS BANKS BORROWING BORROWING COUNTRIES BUSINESS PERFORMANCE CAPITAL BASE CAPITAL COSTS CAPITAL FUNDS CAPITAL GAIN CAPITAL GAINS CASH FLOW CASH FLOWS CIVIL WAR COMMERCIAL BASIS COMMERCIAL FARMING COMMERCIAL TERMS COMMODITY COMMODITY PRICE COMPETITIVE MARKETS CONSUMER PRICE INDEX CURRENCY DEBT DEBT CRISIS DEBT SERVICE DEBT SERVICE PAYMENTS DEMOCRACIES DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT COMPANY DEVELOPMENT CORPORATION DEVELOPMENT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE COMPANIES DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENTS DISPOSABLE INCOMES DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC MARKETS ECONOMIC ACTIVITIES ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INITIATIVES ECONOMIC POLICIES ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT OPPORTUNITIES ENABLING ENVIRONMENT ENVIRONMENTAL IMPACT ENVIRONMENTAL RISKS EQUITY CAPITAL EQUITY FINANCE EQUITY FUNDS EQUITY HOLDINGS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTOR EQUITY RETURNS EQUITY STAKE EQUITY STAKES EQUITY VALUE EXCESSIVE SUBSIDIES EXCHANGE CONTROLS EXPATRIATES EXPLOITATION EXPORT CROP EXPORT EARNINGS EXPORT MARKETS EXPOSURE FACE VALUE FAMILIES FINANCE CORPORATION FINANCIAL BENEFIT FINANCIAL BENEFITS FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OBLIGATION FINANCIAL PERFORMANCE FINANCIAL RETURN FINANCIAL RETURNS FINANCIAL SELF-SUFFICIENCY FINANCIAL SUSTAINABILITY FINANCIAL VIABILITY FOOD PRODUCTION FOREIGN EXCHANGE FOREIGN GOVERNMENTS FOREIGN INVESTORS GENDER GOVERNMENT ACTIONS GOVERNMENT GUARANTEES GOVERNMENT POLICIES HOST COUNTRIES HOST GOVERNMENTS HOUSEHOLDS HOUSING INCOME INCORPORATED COMPANIES INFLATION INFORMAL WORKERS INITIAL INVESTMENT INSTRUMENT INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL DEBTS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INVESTING INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROJECTS INVESTMENT STRATEGY JOINT VENTURE JOINT VENTURES LABOUR LAWS LAND RIGHTS LANDLESS FARMERS LARGE-SCALE INVESTMENT LENDER LENDERS LEVEL OF RISK LIMITED LIABILITY LIMITED LIABILITY COMPANY LIVING STANDARDS LLC LOAN LOCAL CURRENCY LOCAL ECONOMIES LOCAL MARKET LOCAL MARKETS LONG TERM DEBT LONG-TERM LOANS MARKET PRICES NATURAL RESOURCES NUTRITION OUTPUT PARTICULAR COUNTRY PEOPLES PERMANENT JOBS PIONEERING PROJECTS POLLUTION PORTFOLIO PORTFOLIO ANALYSIS PORTFOLIOS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATIZATION PRIVATIZATIONS PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RATES OF RETURN REGULATORY CAPACITY RESERVE RESERVES RESPONSIBLE INVESTMENT RETURNS ON EQUITY RURAL INFRASTRUCTURE SETTLEMENT SHARE CAPITAL SHAREHOLDER SHAREHOLDERS SHAREHOLDING SMALLHOLDER SMALLHOLDER FARMERS SMALLHOLDERS SOCIAL COSTS SOCIAL SECURITY SOCIAL WELFARE SOLVENCY SOVEREIGN DEBT SOVEREIGN LENDING START-UP START-UPS STATE ENTERPRISES STOCK MARKET STOCK MARKETS SUBSIDIZATION SUSTAINABLE DEVELOPMENT TAX TECHNICAL ASSISTANCE TRADE UNIONS TRADING TRANSPARENCY TREASURY TURNOVER URBAN AREAS VALUATION VENTURE CAPITAL VENTURE CAPITAL FUNDS WORLD MARKETS |
| spellingShingle |
ACCESS TO MARKETS ACCOUNTING AGRARIAN REFORM AGRICULTURAL COMMODITIES AGRICULTURAL INVESTMENTS BALANCE SHEET BALANCE SHEETS BANKS BORROWING BORROWING COUNTRIES BUSINESS PERFORMANCE CAPITAL BASE CAPITAL COSTS CAPITAL FUNDS CAPITAL GAIN CAPITAL GAINS CASH FLOW CASH FLOWS CIVIL WAR COMMERCIAL BASIS COMMERCIAL FARMING COMMERCIAL TERMS COMMODITY COMMODITY PRICE COMPETITIVE MARKETS CONSUMER PRICE INDEX CURRENCY DEBT DEBT CRISIS DEBT SERVICE DEBT SERVICE PAYMENTS DEMOCRACIES DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT COMPANY DEVELOPMENT CORPORATION DEVELOPMENT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE COMPANIES DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENTS DISPOSABLE INCOMES DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC MARKETS ECONOMIC ACTIVITIES ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INITIATIVES ECONOMIC POLICIES ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT OPPORTUNITIES ENABLING ENVIRONMENT ENVIRONMENTAL IMPACT ENVIRONMENTAL RISKS EQUITY CAPITAL EQUITY FINANCE EQUITY FUNDS EQUITY HOLDINGS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTOR EQUITY RETURNS EQUITY STAKE EQUITY STAKES EQUITY VALUE EXCESSIVE SUBSIDIES EXCHANGE CONTROLS EXPATRIATES EXPLOITATION EXPORT CROP EXPORT EARNINGS EXPORT MARKETS EXPOSURE FACE VALUE FAMILIES FINANCE CORPORATION FINANCIAL BENEFIT FINANCIAL BENEFITS FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OBLIGATION FINANCIAL PERFORMANCE FINANCIAL RETURN FINANCIAL RETURNS FINANCIAL SELF-SUFFICIENCY FINANCIAL SUSTAINABILITY FINANCIAL VIABILITY FOOD PRODUCTION FOREIGN EXCHANGE FOREIGN GOVERNMENTS FOREIGN INVESTORS GENDER GOVERNMENT ACTIONS GOVERNMENT GUARANTEES GOVERNMENT POLICIES HOST COUNTRIES HOST GOVERNMENTS HOUSEHOLDS HOUSING INCOME INCORPORATED COMPANIES INFLATION INFORMAL WORKERS INITIAL INVESTMENT INSTRUMENT INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL DEBTS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INVESTING INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROJECTS INVESTMENT STRATEGY JOINT VENTURE JOINT VENTURES LABOUR LAWS LAND RIGHTS LANDLESS FARMERS LARGE-SCALE INVESTMENT LENDER LENDERS LEVEL OF RISK LIMITED LIABILITY LIMITED LIABILITY COMPANY LIVING STANDARDS LLC LOAN LOCAL CURRENCY LOCAL ECONOMIES LOCAL MARKET LOCAL MARKETS LONG TERM DEBT LONG-TERM LOANS MARKET PRICES NATURAL RESOURCES NUTRITION OUTPUT PARTICULAR COUNTRY PEOPLES PERMANENT JOBS PIONEERING PROJECTS POLLUTION PORTFOLIO PORTFOLIO ANALYSIS PORTFOLIOS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATIZATION PRIVATIZATIONS PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RATES OF RETURN REGULATORY CAPACITY RESERVE RESERVES RESPONSIBLE INVESTMENT RETURNS ON EQUITY RURAL INFRASTRUCTURE SETTLEMENT SHARE CAPITAL SHAREHOLDER SHAREHOLDERS SHAREHOLDING SMALLHOLDER SMALLHOLDER FARMERS SMALLHOLDERS SOCIAL COSTS SOCIAL SECURITY SOCIAL WELFARE SOLVENCY SOVEREIGN DEBT SOVEREIGN LENDING START-UP START-UPS STATE ENTERPRISES STOCK MARKET STOCK MARKETS SUBSIDIZATION SUSTAINABLE DEVELOPMENT TAX TECHNICAL ASSISTANCE TRADE UNIONS TRADING TRANSPARENCY TREASURY TURNOVER URBAN AREAS VALUATION VENTURE CAPITAL VENTURE CAPITAL FUNDS WORLD MARKETS Tyler, Geoff Dixie, Grahame Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| geographic_facet |
Africa East Asia and Pacific |
| relation |
Agriculture and environmental services
discussion paper;no. 1 |
| description |
Recent increases in the prices of
agricultural commodities have spurred a surge of private
investment into farming and agribusiness. Given the right
types of large-scale investment, this can have a
transformative effect in underdeveloped rural areas and have
a positive effect on national economic development including
the provision of domestic food supply to urban areas that
can reduce dependence on food imports. This study analyzes
the experience of the Commonwealth Development Corporation
(CDC) as an investor in commercial smallholder and estate
agriculture and agro-processing in Sub-Saharan Africa and
Southeast Asia and the Pacific between 1948 and 2000. A
simple analysis of the data was undertaken to determine
whether success and failure can be correlated to any
critical factors. Seventy-nine (or 49 percent) of the
projects were classified as failures or moderate failures in
financial terms. This review of CDC agribusiness investments
corroborates the view that agribusiness investments are
risky, particularly when the investment is in a start-up.
While only one fifth of projects were rated complete
failures, one third of equity investments generated at least
moderately attractive internal rates of return, and overall
about 55 percent resulted in financially viable projects.
The majority of projects in both Asia and Africa ended up
being sustainable businesses that delivered broadly the
number of jobs and level of turnover that had initially been
anticipated. This raises the question of why, despite this
low level of returns on equity, these businesses often
survive. The analysis of CDC's agribusiness portfolio
demonstrates both historical potential and pitfalls and
illustrates the need to continuously adapt and innovate to
achieve both political and commercial sustainability. |
| format |
Publications & Research :: Working Paper |
| author |
Tyler, Geoff Dixie, Grahame |
| author_facet |
Tyler, Geoff Dixie, Grahame |
| author_sort |
Tyler, Geoff |
| title |
Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| title_short |
Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| title_full |
Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| title_fullStr |
Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| title_full_unstemmed |
Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific |
| title_sort |
investing in agribusiness : a retrospective view of a development bank's investments in agribusiness in africa and southeast asia and the pacific |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/08/18286955/investing-agribusiness-retrospective-view-development-banks-investments-agribusiness-africa-southeast-asia-pacific http://hdl.handle.net/10986/16660 |
| _version_ |
1764433638316834816 |
| spelling |
okr-10986-166602021-04-23T14:03:30Z Investing in Agribusiness : A Retrospective View of a Development Bank's Investments in Agribusiness in Africa and Southeast Asia and the Pacific Tyler, Geoff Dixie, Grahame ACCESS TO MARKETS ACCOUNTING AGRARIAN REFORM AGRICULTURAL COMMODITIES AGRICULTURAL INVESTMENTS BALANCE SHEET BALANCE SHEETS BANKS BORROWING BORROWING COUNTRIES BUSINESS PERFORMANCE CAPITAL BASE CAPITAL COSTS CAPITAL FUNDS CAPITAL GAIN CAPITAL GAINS CASH FLOW CASH FLOWS CIVIL WAR COMMERCIAL BASIS COMMERCIAL FARMING COMMERCIAL TERMS COMMODITY COMMODITY PRICE COMPETITIVE MARKETS CONSUMER PRICE INDEX CURRENCY DEBT DEBT CRISIS DEBT SERVICE DEBT SERVICE PAYMENTS DEMOCRACIES DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT COMPANY DEVELOPMENT CORPORATION DEVELOPMENT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE COMPANIES DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENTS DISPOSABLE INCOMES DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC MARKETS ECONOMIC ACTIVITIES ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC INITIATIVES ECONOMIC POLICIES ECONOMIES OF SCALE EMPLOYEE EMPLOYMENT OPPORTUNITIES ENABLING ENVIRONMENT ENVIRONMENTAL IMPACT ENVIRONMENTAL RISKS EQUITY CAPITAL EQUITY FINANCE EQUITY FUNDS EQUITY HOLDINGS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTOR EQUITY RETURNS EQUITY STAKE EQUITY STAKES EQUITY VALUE EXCESSIVE SUBSIDIES EXCHANGE CONTROLS EXPATRIATES EXPLOITATION EXPORT CROP EXPORT EARNINGS EXPORT MARKETS EXPOSURE FACE VALUE FAMILIES FINANCE CORPORATION FINANCIAL BENEFIT FINANCIAL BENEFITS FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OBLIGATION FINANCIAL PERFORMANCE FINANCIAL RETURN FINANCIAL RETURNS FINANCIAL SELF-SUFFICIENCY FINANCIAL SUSTAINABILITY FINANCIAL VIABILITY FOOD PRODUCTION FOREIGN EXCHANGE FOREIGN GOVERNMENTS FOREIGN INVESTORS GENDER GOVERNMENT ACTIONS GOVERNMENT GUARANTEES GOVERNMENT POLICIES HOST COUNTRIES HOST GOVERNMENTS HOUSEHOLDS HOUSING INCOME INCORPORATED COMPANIES INFLATION INFORMAL WORKERS INITIAL INVESTMENT INSTRUMENT INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL DEBTS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INVESTING INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROJECTS INVESTMENT STRATEGY JOINT VENTURE JOINT VENTURES LABOUR LAWS LAND RIGHTS LANDLESS FARMERS LARGE-SCALE INVESTMENT LENDER LENDERS LEVEL OF RISK LIMITED LIABILITY LIMITED LIABILITY COMPANY LIVING STANDARDS LLC LOAN LOCAL CURRENCY LOCAL ECONOMIES LOCAL MARKET LOCAL MARKETS LONG TERM DEBT LONG-TERM LOANS MARKET PRICES NATURAL RESOURCES NUTRITION OUTPUT PARTICULAR COUNTRY PEOPLES PERMANENT JOBS PIONEERING PROJECTS POLLUTION PORTFOLIO PORTFOLIO ANALYSIS PORTFOLIOS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATIZATION PRIVATIZATIONS PROFIT MARGINS PROFITABILITY PROPERTY RIGHTS RATES OF RETURN REGULATORY CAPACITY RESERVE RESERVES RESPONSIBLE INVESTMENT RETURNS ON EQUITY RURAL INFRASTRUCTURE SETTLEMENT SHARE CAPITAL SHAREHOLDER SHAREHOLDERS SHAREHOLDING SMALLHOLDER SMALLHOLDER FARMERS SMALLHOLDERS SOCIAL COSTS SOCIAL SECURITY SOCIAL WELFARE SOLVENCY SOVEREIGN DEBT SOVEREIGN LENDING START-UP START-UPS STATE ENTERPRISES STOCK MARKET STOCK MARKETS SUBSIDIZATION SUSTAINABLE DEVELOPMENT TAX TECHNICAL ASSISTANCE TRADE UNIONS TRADING TRANSPARENCY TREASURY TURNOVER URBAN AREAS VALUATION VENTURE CAPITAL VENTURE CAPITAL FUNDS WORLD MARKETS Recent increases in the prices of agricultural commodities have spurred a surge of private investment into farming and agribusiness. Given the right types of large-scale investment, this can have a transformative effect in underdeveloped rural areas and have a positive effect on national economic development including the provision of domestic food supply to urban areas that can reduce dependence on food imports. This study analyzes the experience of the Commonwealth Development Corporation (CDC) as an investor in commercial smallholder and estate agriculture and agro-processing in Sub-Saharan Africa and Southeast Asia and the Pacific between 1948 and 2000. A simple analysis of the data was undertaken to determine whether success and failure can be correlated to any critical factors. Seventy-nine (or 49 percent) of the projects were classified as failures or moderate failures in financial terms. This review of CDC agribusiness investments corroborates the view that agribusiness investments are risky, particularly when the investment is in a start-up. While only one fifth of projects were rated complete failures, one third of equity investments generated at least moderately attractive internal rates of return, and overall about 55 percent resulted in financially viable projects. The majority of projects in both Asia and Africa ended up being sustainable businesses that delivered broadly the number of jobs and level of turnover that had initially been anticipated. This raises the question of why, despite this low level of returns on equity, these businesses often survive. The analysis of CDC's agribusiness portfolio demonstrates both historical potential and pitfalls and illustrates the need to continuously adapt and innovate to achieve both political and commercial sustainability. 2014-01-29T01:20:33Z 2014-01-29T01:20:33Z 2013-08 http://documents.worldbank.org/curated/en/2013/08/18286955/investing-agribusiness-retrospective-view-development-banks-investments-agribusiness-africa-southeast-asia-pacific http://hdl.handle.net/10986/16660 English en_US Agriculture and environmental services discussion paper;no. 1 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research Africa East Asia and Pacific |