Value chain in agricultural system-Linkages of farmers to markets
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Dr Lakshmi Dhar Hatai
Stagnating productivity, rising costs, declining farm incomes, and high price volatility of agri-commodities, are making farming un-remunerative and risky. A significant revolution in food habits is encouraging diversification towards high - value commodities, post-harvest processing and value addition of agricultural produce. To raise income, employment, profitability, food security, global competitiveness and social welfare, a holistic approach with emphasis in value chain and value addition in agricultural produce has become imminent.
Agricultural value chain includes the full range of activities and participants involved in moving agricultural products from input suppliers to farmers’ fields, and ultimately to consumers.
An agricultural value chain emphasized in the input supply, production, post-harvest, processing, storage, marketing and distribution, food service and consumption functions all along the farm–to-plate continuum for any given product. A value chain involves a series of value generating activities through which a farm/firm develops a competitive advantage and creates value. Value chain is the full range of activities and services required to bring the products or services from conception, through production and delivery to final consumers.
Value chain analysis (VCA) is a method for accounting and presenting the value that is created in aproduct or service as it is transformed from raw inputs to a final product consumed by end users.
The modern agricultural value chains are networks that specifically support three major flows: (1) Physical product flows-physical product movements from input suppliers to buyers to final consumers.
(2) Financial flows-Credit terms and lending, payment schedules and repayments, savings and insurance arrangements
(3) Information flows- these coordinate the physical product and financial flows.
(To be contd)
Stagnating productivity, rising costs, declining farm incomes, and high price volatility of agri-commodities, are making farming un-remunerative and risky. A significant revolution in food habits is encouraging diversification towards high - value commodities, post-harvest processing and value addition of agricultural produce. To raise income, employment, profitability, food security, global competitiveness and social welfare, a holistic approach with emphasis in value chain and value addition in agricultural produce has become imminent.
Agricultural value chain includes the full range of activities and participants involved in moving agricultural products from input suppliers to farmers’ fields, and ultimately to consumers.
An agricultural value chain emphasized in the input supply, production, post-harvest, processing, storage, marketing and distribution, food service and consumption functions all along the farm–to-plate continuum for any given product. A value chain involves a series of value generating activities through which a farm/firm develops a competitive advantage and creates value. Value chain is the full range of activities and services required to bring the products or services from conception, through production and delivery to final consumers.
Value chain analysis (VCA) is a method for accounting and presenting the value that is created in aproduct or service as it is transformed from raw inputs to a final product consumed by end users.
The modern agricultural value chains are networks that specifically support three major flows: (1) Physical product flows-physical product movements from input suppliers to buyers to final consumers.
(2) Financial flows-Credit terms and lending, payment schedules and repayments, savings and insurance arrangements
(3) Information flows- these coordinate the physical product and financial flows.
(To be contd)