Reader: Agribusiness and Value Chains

Topic :

The GTZ defines agribusiness as “all market and private business-orientated entities involved in the production, storage, distribution, and processing of agro-based products; in the supply of production inputs; and in the provision of services, e.g. extension or research.”

Agribusiness support is considered to be a part of a country’s economic development concept and is targeted towards the creation of jobs and income in mainly rural areas. In line with a common business concept, the guiding principle is the market orientation of all support activities. Agribusiness is a component of rural development and forms part of a strategy to improve regional economic development and ensure a safe food supply. It aims to:

  • address market and private business-orientated entities directly
  • stimulate business opportunities through improved frame conditions in rural areas
  • ensure a safe and high-quality food supply for the consumer

The paper suggests that with opening of markets, the pressure to rationalise agriculture has reached even the remotest rural areas anywhere in the world. Agricultural sectors are faced with growing demands: they need to raise quality standards for their products, have more transparent production and handling processes, while sometimes having to produce these food products in a deteriorating natural environment.

The discussion begins with the promotion of agribusiness strategies – looking at recognising the potential of products and markets, general constraints and principles of agribusiness strategies, scenarios and GTZ areas of agribusiness. It then moves onto considering value chains – theory of the value chain approach, knowledge management in value chains and guidelines for the improvement of value chains.

The latter half of the paper begins by discussing service provision and development in agricultural value chains and sets out the Value Chain Analysis Development approach (VADE) devised by GTZ. VADE is described as an analytical instrument to systematically enhance market access and competitiveness of small to medium scale rural producers and processors. Both public-private and private-private partnerships are also analysed before the paper ends with key links and literature.

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