Agro Value Chains Essay

Agro value chains have some challenges such as intense competition from overseas, governance of international supermarkets, retailers and buyers and its impact on access to markets the increasing demand for highquality, organic, minimally processed products and the focus on traceability and social responsibility lack of recognition due to poor infrastructure and small farms. 

Value chain explains the end to end activities in the life cycle of a product or service. It describes the entire range of activities from inputsupply stage, processing, storage, processing, distribution to its final market destination, and it includes its disposal after use. Value is added progressively as products move successively through the various stages, transactions take place among multiple chain stakeholders, money changes hands, information is exchanged. The chain environment comprising macroeconomic conditions, policies, laws, standards, regulations and institutional support services (communications, research, innovation, finance, etc.) are the essential elements that affect the value chain performance. With business dynamics ever changing, value chain analysis continuously draws the attention of researchers to explore how best the quantity of production can be increased, regularity and continuity of production is improved, the quality and safety of the products or services can be improved, the time needed to reach the customers is reduced, transactional costs are minimized, the strategies for capacity building for chain actors to follow and assimilate technology and market developments can be built on a sustainable basis. 

UNIDO evolved the following structured approach for agrovalue chain analysis and development. 

1. Identifying, selecting and prioritizing value chains for promotion Based on a review of key issues impacting industrial development and the capacity of a given country, the choice of value chains is further refined by applying priority criteria, weighting their relative importance and establishing ranking score sheets. 

2. Mapping value chains Obtain a clear understanding of the sequence of activities through mapping and identify the key actors and relationships involved in the value chain. Present in qualitative and quantitative terms through graphics the details of various actors of the chain, their linkages and all operations of the chain from preproduction (supply of inputs) to industrial processing and marketing. To the extent the details are required, focus on factors such as the size and scale of main actors production volume number of jobs sales and export destinations and concentration etc. 

3. Analyzing and evaluate the value chain technological capacities At this stage, the value chain production system and tools are assessed their technical performance is evaluated and the principal technical actions are determined to upgrade individual enterprises within the chain and to enhance their competitiveness.

4. Analyzing and evaluate the value chain economic performance and competitiveness. Here, economic factors such as production costs, margins, addedvalue, etc. are measured. The current performance is benchmarked as against that of competitors or alternatives available to identify strategic and nonstrategic activities and raise awareness among chain actors concerning cost drivers, margins for price negotiation and value addition possibilities. The ultimate purpose at this stage is to identify the leverage points for action