The agricultural value chain is not a complex Agric structure that involves only experts. Virtually everyone involved in the agricultural value chain has something to do with agriculture, whether as a producer, marketer, or consumer.
It involves the participation of every actor in the agricultural process. It is a chain that stretches from producers of agriproducts to the homes of consumers. Let’s look at it in detail.
What is the agricultural value chain?
It includes the production and processing of Agric products; this spans from processing to packaging, distribution, and consumption. It spans from the beginning of a product to its end-use. Contrary to what some may think, the chain is not just farmer and farm-related; it also involves all the actors in the processing, marketing, distribution, and consumption of agricultural products. So, if you need food to quench hunger or feed your livestock, or if you trade Agric commodities to make money, you are an actor in the agricultural value chain.
The value chain involves every area of agriculture, including food production, commodity trading, livestock production, and other agribusinesses. It simply means the activities involved at the start of a product to the end or utilization of the product. So, it is an umbrella of the links from production to consumption.
There is the food value chain, agricultural commodity value chain, agribusiness value chain, livestock value chain and many others. However, there are stages in the agricultural value chain that you should know.
Stages of the agricultural value chain
The agricultural value chain is important in the development of Agriculture because it enables the identification of weak points in agriproducts. During this process, problems can be easily identified and suitable actions taken to solve them. The stages include:
- Supply of raw materials or inputs and equipment
The first stage of value creation in agricultural production is the supply of raw materials, the supply of farm inputs for cultivation,, or the supply of offspring for rearing or commodity procurement. This is a critical stage because the quality of any raw material or input contributes to its output. Remember the saying, ‘you reap what you sow’. Therefore, evaluating raw materials is essential for a successful flow in the value chain.
The production stage includes activities that use the supplied raw materials to manufacture products. In farming, this includes the cultural practices involved in crop production or livestock management practices, while in agricultural commodities, this involves storing the commodities in warehouses after procurement of the commodity.
This stage involves transforming produce into products. Processing agricultural produce entails cooking, packaging, drying, and other activities that transform raw materials or agricultural produce into products or finished goods.
- Marketing and distribution, including food service
This stage involves the distribution of agriproducts by retailers to consumers. At this stage of the value chain, agriproducts are found in groceries, markets, and other food services from where they get to the end-users.
It is important to note that the weakness of each stage of the agricultural value chain can result in tremendous loss and reduced income. Therefore, as an agribusiness owner, you must pay attention to every stage to diversify your business and maximise profit.
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