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Abstract

Agro‐industrialization promotion is a policy option to aggregate value to a primary product and increase revenues for small farmers. However, experience has shown the vulnerability of small‐scale agro‐industries (SSAI) when facing a competitive environment with technological, institutional and managerial bottlenecks. A system dynamics model was built to simulate the financial behavior of agrifood processing enterprises promoted by Brazilian SSAI development programs after the mid 1990’s. Ten years after the modeling exercise, an assessment of selected enterprises supported by distinct programs largely confirmed the simulation results. Modelling suggested conditions for long‐term SSAI sustainability were corroborated and the importance of the promotion programs was further evidenced.

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