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 What is the Agricultural Value Chain? - Open Education Online

 What is the Agricultural Value Chain?

According to the United States Agency for International Development, a value chain is the full range of activities required to bring a product or service from conception to consumption, including market channels that are available to all firms. Other bodies such as World Bank (WB) and The United Nations Food and Agriculture Organization (FAO), have given other similar definitions. There is no strict definition to the agricultural values chain.

The Agricultural Value Chain explains what, who, how, when, and where of agriculture, from farm to fork. Everyone is a part of this value chain, as it pertains to the production, sales, marketing (including branding), and consumption of agricultural produce or products.

All people and entities have their parts to play in the agricultural value chain, directly or indirectly. Everyone who consume, eat, and drink farm produce or food and drinks processed from farm products, and everyone who use products from agro-allied companies (e.g., clothing and textile) is a consumer on the agricultural value chain.

Farmers, gardeners, agriculturists who produce consumables through any agricultural activity are producers. People, organizations, and financial institutions who provide fund for the purpose of agribusiness are also players in the agricultural value chain. People and companies who process farm produce into ready food (homes, eateries, restaurants etc.), and people who process, package, brand and distribute farm produce into value added products are also key players in the agricultural value chain.

Basically, anyone in the link from farm to fork, is a player in the agriculture value chain, with each one having they roles and importance. There are the producers who grow edible plants and animals for food, there are the consumers who consume the final products, and in between are the bunch of people, enterprises, businesses, and companies who serve as middlemen catering to the commercial and logistics aspect. Each of these players are either acting as growers, buyers, sellers, processors, transporters, keepers, and marketers or branders.

Indirect participation also comes from government, policy makers, media companies, banks and other financial institutions, international and research organizations, non-government organizations, universities, extensionists, and innovators.

The Agricultural Value Chain has its specific strengths, weaknesses, opportunities, and threats. These factors vary in degree depending on location as some challenges would be more common in developing countries, while some are characteristic of developed countries, depending on factors such as weather, climate, technology, and other interventions.

Threats and Opportunities in the Agricultural Value Chain

Asides the primary threats in developing countries such as land overuse, water and soil degradation, insufficient education and intervention, and high dependence on traditional irrigation, there are other major threats highlighted below.

Post-harvest Loss

Majority of food loss and waste occurs in-between the production and the consumption, especially with cereals, fruits, and vegetables. Most developing countries are behind on cold chain logistics and storage and the regions are characterized by inefficient expensive power supply, low-capacity utilization, and low funding.

Opportunities linked to this threat is financing to improve farmer output by investing in the cold chain storage and food handling. This will in turn improve the network between production and consumption to reduce post-harvest loss.

Traceability

Too many players in between production and consumption have led to difficulty in traceability. People are not easily traced to be held accountable for quality of product or delivery.

Digitalization, proper labeling, and address system helps to bring more transparency into production and transactions. Developed countries have achieved great success with this and developing countries are beginning to follow suit.

Trend and Taste

As time evolves and people get more informed, there is a shift in trend and taste. People tend towards highly nutritious, organically grown food variety, species etc.  For instance, there is a higher shift in protein intake therefore, higher consumption of fruits, vegetables, and pulses. Many small, medium scale farmers will need to upscale and improve to meet these demands.

Below are some opportunities to be explored in the agricultural value chain.

Employment

Lots of employment opportunities open with the growing needs poised. More experts are needed for biotechnology, precision planting, digitalization, cold chain technologies, commercial advancement, field production, factory work, machinery operation, advertising, marketing, branding, sales, logistics, and lots more.

Economic Growth

Expanding productivity, improving quality and quantity of produce, value addition, and packaging improves GDP and overall economic situation of countries. Agribusiness being a business of scale, the higher the investment, the higher the return on investment. The UN sustainable development goals such as reduced inequalities among countries, and responsible consumption can be met through achieving economic growth, which is equally one of the 17 SDGs.

Innovation

There is an improvement in technology and innovation to meet up with demands of the agricultural value chain. Professionals in the science and technology sector can diversify into agritech for more opportunities and specific target markets or audience. The agricultural value chain may require certain innovations or technologies that are specific to special agricultural needs. This is an avenue for people to attract funding for their innovations and start up ideas.

Research

Higher demand and expectations come with higher requirements in term of knowledge and information. This opens more opportunities for academic research, informatics, and extension services. Government, non-governmental organizations and individuals fund education, research, and studentships for improvement of the agricultural value chain.

Gender Balance

The agricultural value chain poses an opportunity to achieve gender balance. Farming. Agriculture or agribusiness becomes less male dominated with the improvement of agricultural value chains such that women can now come in in less laborious ways which has always posed some ethical questions. Many religious and ethical mindset are against women used as “labor” in farming and agricultural activities such as tilling the ground or handling heavy equipment. Such societies can now bring women into the sector through avenues such as teaching and research, STEM, advertising and media, branding, packaging, sales, and marketing.

The percentage of women who are empowered, economically useful and financially dependent becomes higher. This in contributes towards matters such as socioeconomic growth,  domestic violence, poverty, overpopulation, forced migration etc.

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