Transformation of developing, subsistence economies into commercial and industrialized societies accompanies a declining share of agriculture in the gross domestic product (GDP). However, the shares of high-value products like horticultural, livestock and fish products increase with the decline of low-value products like cereals. This process of transformation is generally endogenous to various forces of supply and demand and, therefore, its pace can be influenced by policies. The forces in the demand side include income and income parameters of domestic consumers, and the ability to exploit foreign demand through exports of horticultural products. On the supply side, a large number of factors constrain the production of horticultural products. Agro-ecological constraints are country-specific. Technological backwardness, lack of quality control and standardization, weak marketing infrastructure including risk insurance, comparative advantages and institutional weakness in linking with world markets and exploiting economies of scale are some of the fundamental problems confronted by most developing countries. Export of horticultural products from developing countries is perhaps the most crucial factor that can impact the process of transformation mentioned above. Macro-economic policies that maintain a stable incentive structure for exports are important. But policies that respond to the constraints in the channel linking farmers in developing countries to supermarkets in the developed world are perhaps more important. Developing countries currently share only about 27% of world trade in horticultural products. More than 80% of this trade is, however, shared by only 31 developing countries. Barriers to entry into the developed market by new exporters of horticultural products are enormous. Whether the emerging forces of globalization under the auspices of WTO would make the entry problem more difficult or easier for vast majority of the developing countries is an open, but critical, question.
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