Agricultural Value Chains 101

Many current global policies propose that farmers can get out of poverty by being better linked to markets. Thus, government and NGO programs often promote cheap agricultural input supplies and support farmers to sell their products through “value chains”. Value chain refers to all the steps that a product takes, from its point  of origin (in this case, farm  products) to the consumer. Many professionals  think that improving conditions along the whole chain stimulates farmers to become more entrepreneurial and increase their incomes.

Agricultural value chain development is about linking farmers to people who can process, package, market and eventually buy the food they produce. In Ghana, the agricultural sector employs at least 55 percent of the working population and most of them are small-scale farmers. This increases to more than 75 percent in the rural areas. Over 35 percent of the country’s domestic product comes from agriculture. This pattern is not different from other economies in sub-Saharan Africa. Despite the enormous contribution from the agriculture to national economies, the rural folk whose main livelihood activity is agriculture happen to be the most poverty-stricken in the developing world.

Rural farmers have always taken opportunities to trade their products, improve their ability to create wealth. However, how can farmers’ inherent entrepreneurial capacities be enhanced even further? This is when value chain development as part of the overall development agenda has an answer.

MARKETS DO NOT FALL FROM THE SKIES

Markets have to be created by the farmers and agribusiness people themselves and not by outsiders for them. Only then will they feel the pain and the gain from their transactions. This does not mean that the government should not  provide a favourable environment  for enterprises to thrive. After all, the state also gains and loses depending on the direction of the country’s economic growth.

Nevertheless, small-scale farmers need coaching to play gainful roles in the agro-food industry. Coaching on chain development techniques is a sure way of empowering small scale farmers to engage with suppliers and buyers of their produce to develop a common strategy from which farmers and buyers both benefit.

Farmer empowerment through value chain development does not only come through promoting  innovations in production and processing technologies. Improving the way a business is organized, managed and regulated is also necessary. Rural farmers can then shift from largely subsistence vocations to more business-like ones, integrating themselves into sustainable markets for their products.

Solomon Elorm Allavi

sallavi@syecomp.com

Ghana

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