A value chain approach in agricultural development helps identify weak points in the chain and actions to add more value.
In Rwanda, for example, an analysis of the dairy value chain identified critical needs for more local milk cooling points, more collaboration between dairy plants and farmers, and greater diversification of final products.
In Guatemala, the world’s largest producer of cardamom, reviews by Heifer International and the Norman Borlaug Institute for International Agriculture revealed that critical value chain weaknesses are a total lack of varietal development over 100 years and a lack of development of more diversified markets for cardamom as an input to processed foods, cosmetics and health products.
In the Philippines, the analysis found a need for fishermen to deliver more uniform-sized fish to processors, for government to enforce corresponding regulations and for processors to offer fishermen contracts that contain credit.
And in Vietnam, a value chain analysis of a cassava industry driven by growing demand inside the country and from China identified issues regarding depletion of soil fertility (unsustainable farming methods), management of wastewater from starch plants, and the need for better direct links between small farmers and processors.
Another example is sorghum in Africa. It has multiple end uses, including porridge, flour, snacks, couscous and other products for human consumption; inputs for beer production; and feed for poultry and animals. However, yields of these grains have increased only slightly, and the sales of the grains to markets other than animal feed face obstacles in the value chains. Farmers could expand their profits from these multiple potential markets if solutions were found for value chain issues such as:
- Poor quality of seeds and varieties inappropriate for the various uses.
- Poor quality of product at harvest, with grains of inconsistent size and colouration.
- Inadequate threshing techniques and post-harvest drying and storage, which reduce quantity and market quality.
- Inadequate grading.
- Insufficient market development and communication with markets regarding varieties and quality of sorghum desired.
- Insufficient training and finance for improved post-harvest management.
This analysis underscores the importance of sorghum growers and breeders recognizing that managing food quality can increase their access to more markets. In Uganda, a brewery strengthened the sorghum value chain by offering farmers production contracts with guaranteed prices along with quality requirements, which led many more farmers to grow the grain.
Through the Sernick Farmers Development Programme, emerging farmers are being offered the opportunity to become part of the Sernick Abattoir and distribution of meat directly to the consumer value chain.
As these examples illustrate, finding ways to improve value chains can be very important for raising the income of smallholders. Without being linked into markets they are condemned to producing only for subsistence — better markets can lift them out of poverty. But making this leap requires more knowledge, and many actors along the value chain can help supply this crucial ingredient.
If you as a farmer only produce weaners for the sake of selling them as young as possible to a feedlot, then the value chain stops for you as a producer at the selling of your weaners…