The agriculture value chain has been a term used primarily by those working in agricultural development section and has been in usage longer than we know. A value chain is an array of activities linked and works together to add value to a product. These activities usually consist of actors and actions, these two together improve products and link commodity producers to processors and markets.
Linking value chain to agriculture, we can then say that the agricultural value chain is a concept that refers to a whole range of goods and services necessary for an agricultural product to move from the farm to the consumer. The value chains give farmers and consumers the opportunity to record every value added at each stage of every production, marketing, and consumption process.
Agricultural Value chains in developing countries
In developing countries, agriculture has been identified as a critical push of economic growth, hence, the significance of agriculture towards food availability, job security, and less importation cannot be overstressed. For any developing country to move towards revealing its full agriculture potential, the value chain has been clearly identified, planned, highlighted, and modernized.
Value chains differ significantly across countries and products, and more study is needed to identify the ideal configuration to enable smallholder farmers to gain a greater share of their agriculture value and assume fewer risks. However, if agricultural value chains offer opportunities for agriculture growth, then the markets in which smallholders have relative gain need to be acknowledged and the producers will actively be aided.
Globalization and growing international markets in developing countries offer more opportunities for producers to operate in both national and international markets. This statement means that developing countries’ producers must gain better control over production, distribution to guarantee the Value and quality of their products to enable them to operate cost-effectively.
On the other hand, these value chains can also be seen as a vehicle by which new systems of production, labor processes, logistics, technologies, and organizational relations are introduced. Although, another challenge developing countries face is how to enter these vale chains and also how to improve to enable them to compete in these new markets.
Improving the value chain by digitalizing
With the rise of new technology and the exponential penetration of mobile grid coverage to rural areas, digital solutions have been able to help farmers measure their farming practices by improving more yield while linking them to larger supply chains.
Farmers could explore opportunities with these digital platforms that can help them make a better effective and market-based decision centered on the commercial actions instead of continuing with ancient congenital farming methods. These digital services could be used in different varieties of ways to report any ineptitude in farming practices.
Digital solutions help manage time and improves the accuracy of survey for determining progress rates, accessing market magnitudes, and providing input data to the application rate of pesticides and irrigation. Also, with these digital trends, farmers can assess crop health, spot bacterial or crops fungal infections, and instrumental for soil analysis. All this information is useful for developing countries to increase the agriculture value chain.
However, the Government can also support the development and management of value chains in developing countries. The government can form systems of laws that regulates and direct, set rules for rational and economical markets for farmers, processors, and marketing agents.
Although most smallholders would still partake in local value chains, multinational companies still play very important roles in developing value chain opportunities for smallholder farmers.