Value Chains in Agriculture

It was previously mentioned that primary production contributes roughly 2.5% to the GDP, and agribusiness as a whole 15%-18% to the GDP. This indicates that primary production is part of a larger chain of agricultural activities. This chain is also known as a supply chain/value chain. A value chain in agriculture describes “...a range of activities and a set of actors that bring an agricultural product from production on the farm to final consumption, and at each stage in this process, value is added to the product” (Standard Bank, 2017).

Figure 1 represents a typical agri-food value chain consisting of five segments including input supply, primary production, processing and distribution, marketing, and consumption by the consumers.

Figure 1: The Agri-Food value chain                                   (Careerfair n.d.)

The main goal of a value chain is to produce value-added products that will fulfil the needs of consumers.

Click here for an explanation of the Agri-Food Value Chain.