Agricultural value chain
The concept of the agricultural value chain , also called the agricultural value chain , has been used since the beginning of the millennium, especially by those who are active in agricultural development in developing countries . Although there is no generally accepted definition of the term, it usually refers to the full range of goods and services required for an agricultural product to get from the farm to the final consumer or consumer.
background
The term value chain was first popularized in a book published by Michael Porter in 1985 that illustrates how companies could achieve what he called "competitive advantage" by creating value within their organization. Subsequently, the term was adopted for agricultural support purposes and has meanwhile become very fashionable among those working in this area, with a growing number of bilateral and multilateral aid organizations using it to guide their development measures.
At the heart of the concept of the agricultural value chain is the idea of actors connected along a chain that, through a series of activities, produces goods and delivers them to consumers. However, this "vertical" chain cannot function in isolation and an important aspect of the value-added approach is that it also takes into account "horizontal" effects on the chain, such as input and funding offers, expansion support and the general environment. The approach has been particularly useful by donors as it has resulted in the consideration of all those factors that affect farmers' ability to gain profitable market access, leading to a wider range of chain interventions. It is used both to modernize existing chains and for donors to identify market opportunities for smallholders.
Definitions
There is no generally accepted definition of what is meant by agricultural value chains. In fact, some agencies use the term without a workable definition or definition and simply redefined the ongoing activity as "value chain" when the term became fashionable. The published definitions include the World Bank 's "the term value chain describes the full range of value-adding activities required to get a product or service through the various stages of production, including the procurement of raw materials and other inputs", UNIDO 's "actors connected along a chain that produces, transforms and brings goods and services to the end user through a range of activities" and CIAT 's "a strategic network among a range of business organizations".
Without a universal definition, the term "value chain" is now used to refer to a number of types of chains, including:
- An international or regional raw material market. Examples are "the global cotton value chain", "the South African corn value chain" or "the Brazilian coffee value chain";
- A national or local raw material market or agricultural marketing such as "the Ghanaian tomato value chain" or "the Accra tomato value chain";
- A supply chain that can cover both of the above;
- An extended supply chain or marketing channel that includes all activities required to manufacture the product including information / extension, planning, input supply and finance. It is probably the most common use of the term value chain;
- A special chain tailored to the needs of one or a limited number of buyers. This usage, arguably most faithful to Porter's concept, emphasizes that a value chain aims to capture value for all actors by engaging in activities to meet consumer demand or a particular retailer, processor or hospitality company that serves them Consumer supplies to satisfy. Attention is focused on needs as the source of value.
Methods of the value chain
Donors and others who support agricultural development such as B. GIZ , ILO and UNIDO have created a series of documents that are intended to help their employees and others in the assessment of value chains in order to decide on the most suitable measures to update existing chains or to promote new ones. However, the application of the value added analysis is interpreted differently by different organizations, with possible effects on their development impact. The distribution of guidelines has taken place in an environment in which the most important conceptual and methodological elements of value creation analysis and development are still developing. Many of these guides not only contain detailed procedures needed by experts to perform the analysis, but also use detailed quasi-academic methodologies. One such methodology is to compare the same value chain over time (a comparative or panel study) to assess changes in policy retirement , governance , systemic efficiency and the institutional framework.
Linking farmers with markets
An important subset of value creation development deals with the way in which producers can be connected with companies and thus with the value chains. While there are examples of fully integrated value chains that do not involve smallholders (e.g. Unilever operates tea settlements and tea processing plants in Kenya and mixes and packs the tea in Europe before it is sold under the Lipton , Brooke Bond or PG Tips brands), the Most of the agricultural value chains include sales to companies by independent farmers. These arrangements often involve contract farming, where the farmer undertakes to deliver agreed quantities of a crop or animal product based on the buyer's quality standards and delivery requirements, often at a pre-determined price. Companies often also agree to support the farmer with input supply, land preparation, extension advice and the transport of products to their premises.
Including value chains
The work to promote market integration in developing countries is often based on the concept of "inclusive value chains", which usually involves identifying ways in which smallholders can be integrated into existing or new value chains or how they can extract more value from the chain either through increased efficiency or through activities further along the chain. In the various publications on the subject, the definition of "inclusion" is often imprecise, as it is often unclear whether the development goal is to involve all farmers or only those who can best seize the opportunities.
Financing the agricultural value chain
Agricultural finance value chain deals with the flow of money to and within a value chain in order to meet the chain actors' needs for finance, secure sales, buy inputs or products, or improve efficiency. The investigation of the potential for the value chain includes a holistic approach to the analysis of the chain, the people working in it and their interdependencies. These links allow funding to flow through the chain. For example, inputs can be made available to the farmers and the costs can be reimbursed directly upon delivery of the product without the farmers having to obtain a loan from a bank or similar institution. This is common for contract cultivation. Types of value chain include product financing through dealer and upstream credits, or credits provided by a distribution company or a lead company. Other financial instruments from deliveries and services include receivables financing, in which the bank provides funds against an assignment of future receivables against the buyer, and factoring , in which a company sells its receivables at a discount. The value chain also includes the collateralisation of assets, for example on the basis of inventory entries, and risk reduction, such as forward contracting, futures and insurance.
The use of ICT in the value chain
Information and communication technologies for development, or ICT, have become an important tool in promoting the efficiency of the agricultural value chain. The use of mobile technologies in particular has increased rapidly. ICT service prices are falling and technology is becoming more affordable for many people in developing countries. Application software can support farmers directly through SMS messages. Examples are iCow, developed in Kenya, which provides information about the gestation period, the artificial insemination of the cows and the care. Applications such as M-Pesa can support access to mobile payment services for a large part of those without banks and thus facilitate transactions in the value chain. Other applications have been developed to encourage the provision of crop insurance by input traders such as: B.
ICT are also used to strengthen the capacity of agricultural advisory services and NGO staff to reach farmers with up-to-date and accurate information while helping to collect data from the field. The Grameen Foundation's Community Knowledge Worker (CKW) program is an example. Farmers are trained to use ICT applications on a smartphone to provide farm information and assistance with expansion. Most of the market price information is sent to farmers today via SMS. Further down the chain, technologies offer significant opportunities to improve traceability , which is particularly relevant as certification becomes more important. If necessary, many exporters can now trace shipments back to individual farmers and take necessary action to resolve problems. Finally, systems such as eRails , which are funded by the Forum for Agricultural Research in Africa, also support agricultural researchers through data collection and analysis as well as access to current research publications .
Favorable framework conditions
As with all agricultural growth, two things seem to be critical to successful value chain development: creating the right environment for agriculture and investing in rural public goods. A favorable environment presupposes peace and public order, macroeconomic stability, inflation under control, exchange rates based on market rates rather than the governmental allocation of foreign currency, predictable taxes that are reinvested in public goods and property rights. There is a positive correlation between agricultural growth and investments in irrigation, transport infrastructure and other technologies. Governments have a responsibility to provide essential goods and services, infrastructure such as rural roads, and agricultural research and advice. The development of the value chain is often hampered by corruption, both at a high level and at the ubiquitous roadblocks in many countries, especially in Africa. Many value chain improvements require collaboration between a variety of different ministries, which can be difficult to achieve.
See also
credentials
- ↑ Michael E. Porter: Competitive advantage: creating and sustaining superior performance; with a new introduction , 1st Free Press. Edition, Free Press, New York 1998, ISBN 978-0-684-84146-5 .
- ↑ Kaplinsky, R .: A Handbook for Value Chain Analysis . IDRC. Retrieved February 24, 2014.
- ^ A b Henriksen, L .: Agro-Food Value Chain Interventions in Asia: A review and analysis of case studies. Working paper . UNIDO. Retrieved February 24, 2014.
- ↑ Editorial: Adding Value, by Michael Hailu, `` Spore '' No 157
- ^ Andreas Stamm and Christian von Drachenfels "Value Chain Development: Approaches and activities by seven UN agencies and opportunities for interagency cooperation" ILO
- ^ Building competitiveness in Africa's agriculture: A guide to value chain concepts and applications. . World Bank. Retrieved February 25, 2014.
- ↑ a b Pro-poor value chain development: 25 guiding questions for designing and implementing agroindustry projects. . UNIDO. Retrieved February 25, 2014.
- ↑ a b Lundy, M .: Participatory market chain analysis for smallholder producers . CIAT. Archived from the original on December 25, 2009.
- ^ A. Springer-Heinze: Valuelinks: The methodology of value chain promotion. . GIZ. Archived from the original on March 1, 2014. Retrieved on February 24, 2014.
- ↑ DFID: The operational guide for the making markets work for the poor (M4P) . DFID.
- ↑ Vermeulen, S .: Chain-wide learning for inclusive agrifood market development . IIED. Archived from the original on October 6, 2008. Info: The archive link was automatically inserted and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved February 25, 2014.
- ^ Value chain development for decent work. . ILO. Archived from the original on May 13, 2013. Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved February 25, 2014.
- ↑ Guides for value chain development: A comparative report . CTA and ICRAF. Retrieved February 24, 2014.
- ↑ Prowse, M. and J. Moyer-Lee (2014) 'A Comparative Value Chain Analysis of Smallholder Burley Tobacco Production in Malawi, 2003/4 and 2009/10' Journal of Agrarian Change 14: 3 https: //lucris.lub .lu.se / ws / files / 2140085 / 5218863.pdf
- ^ Shepherd, Andrew: Approaches to linking producers to markets . FAO. Retrieved on February 25, 2014 ( page no longer available )
- ^ Contract farming: Partnerships for Growth . FAO. Retrieved February 25, 2014.
- ↑ Haggblade, S .: A conceptual framework for promo ting inclusive agricultural value chains . Michigan State University and IFAD. Archived from the original on August 10, 2013. Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved February 25, 2014.
- ^ Shepherd, A .: Including small-scale farmers in profitable value chains . CTA Publishing. Retrieved April 18, 2017.
- ↑ FAO: Value chain finance . Retrieved February 25, 2014.
- ^ Agricultural Value Chain Finance: Tools and Lessons . FAO and Practical Action. Retrieved February 25, 2014.
- ↑ What is iCOW? . Retrieved March 11, 2014.
- ↑ M-PESA: Kenya's Mobile Wallet Revolution . BBC. Retrieved March 11, 2014.
- ↑ Innovative insurance by mobile . New internationalist. Retrieved March 11, 2014.
- ↑ Community knowledge worker . Grameen Foundation. Retrieved March 11, 2014.
- ↑ Moyer-Lee, J. and M. Prowse (2015) 'How Traceability is Restructuring Malawi's Tobacco Industry' Development Policy Review 33: 2 Archived copy ( Memento of the original from August 9, 2017 in the Internet Archive ) Info: The archive link became automatic used and not yet tested. Please check the original and archive link according to the instructions and then remove this notice.
- ^ The African Portal on Agriculture . Archived from the original on March 13, 2014. Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved March 11, 2014.
- ↑ Steve Wiggins: African agriculture in a changing global context: lessons learned . CTA. Retrieved March 16, 2014.
- ^ Charlie Pye-Smith: Policy Pointer: Value Chains for transforming smallholder agriculture . CTA, Wageningen, Netherlands, pp. 15-19.
