agrifood value chains

8/2/2019 Agrifood Value Chains

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Agri-food Value Chains

the Bigger Picture

Robert A. Reid, IICA Regional Specialistin Agribusiness

March, 2009


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Genesis of the Value-chainConcept

TheValue Chain, also known asvalue chain analysis, is a conceptfrom business management.

First described and popularized byMicheal Porter in his 1985 best seller,Competitive Advantage: Creating andSustaining Superior Performance.


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Definition of Value Chain

A description of the full range ofactivities required to bring aproduct or service through the

different phases of production(including physicaltransformation, and the input of

various producers and services),in response to consumer demand.


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EBASICAG

RI-FO

ODV

ALUE

AIN

DISTRIBUTION

CONSUMER

FARM

ING

PROCE

SSING

I d t li i

Food Safety

Modes of Production & Infrastructure

Technology

Information

COMPETITIVENESSDRIVERS


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Central Concepts of Value Chain

THE INTERACTION OFENTERPRISES AND PROCESSES -TO DELIVER PRODUCTS &SERVICES TO ENDUSERS

FOCUSES ON NET VALUE ADDED(shows where value is added in a process)


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Central Concepts of Value Chain

BUILD WIN-WIN LINKAGESAND COLLABORATION TO

REPOSITION AN ENTIREINDUSTRY AND SPURECONOMIC GROWTH.


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THE VALUE CHAIN APPROACH

CALLS FOR :

A COLLABORATIVE APPROACH TO THE REMOVAL OFCONSTRAINTS AGAINST INCREASING PRODUCTIVITY

FORMULATING AND IMPLEMENTING COMPETITIVEINDUSTRY STRATEGIES THAT SEEK TO REDUCEINEFFICIENCIES AND COSTS

HIGH LEVELS OF INFORMATION GATHERING ANDSHARING RE: ENTERPRISES AND PROCESSES (Allows forbetter understanding of the constraints and opportunities within

each segment)


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VALUE CHAIN ANALYSIS

A METHOD OF IDENTIFYING

THE DYNAMIC LINKAGES BETWEEN

PRODUCTIVE ACTIVITIES

CONSTRAINTS, AND LEVELS OFINEFFICIENCIES THAT PREVENT THEFURTHER ADDITION OF NET VALUE,AND COMPETITIVENESS.


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TOURISM

LARGEST INDUSTRY IN THE WORLD

ACCOUNTING FOR 11.5% OF WORLDGDP AND 12.5% OF EMPLOYMENT WorldTravel and Tourism Council

CARIBBEAN TOURISM HAS LARGESTPROPORTION OF GDP GAINED (29.6%)

AND PEOPLE EMPLOYED (25%) CaribbeanTourism Organization


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THE AGRO-TOURISM LINK

Agriculture based products and services

offered for sale to the tourism industry as acomplement to the natural attributes of thedestination.

The intent is to mainstream raw, minimalprocess and value added agricultural products(and rural spaces) as a unique and distinct

lifestyle products.


11/27EBASICAG

RI-TOURIS

M

ODV

ALUE

CHAI

NHANDLING&

DISTR

IBUTION

TOURIST

FARM

ING

PROCE

SSING

Industry policies

Food Safety

Infrastructure

Technology

Information

COMPETITIVENESS

DRIVERS


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The Tourism - Agriculture Intersect

There are five (5) areas of the eight tourism

sectors in which agriculture can create agro-tourism products. These are:

Food and Beverage) together called hospitality

Accommodation (Rural) Adventure

Attractions

Events and Festivals


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THE WIDER AGRO-TOURISMINDUSTRY

IndustryTourismServices

Attractions

Accommodations

Travel Trade

Events and

Festivals

AdventureTourism

Food andbeverages

Transportation


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IDENTIFIED WEAKNESSES IN THE

AGRO-TOURISM VALUE CHAIN

Fragmented production base

and increasing cost of production

Under-utilization of more

effective modern technologies

Lack of research anddevelopment oriented to

productivity improvements

Preference for utilizing foreign

products in culinary dimension oftourism

Low levels of adoption of fod

safety standards and formal

quality systems

WEAKNESSESPROCESS

PRODUCTION &UTILIZATION OF AGRI PRODUCTS


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Fragmented and inefficientdistribution systems

Inadequate collection, storageand distribution facilities

Low levels of adoption of

standards and formal qualitysystems

WEAKNESSESPROCESS

HANDLING &

DISTRIBUTION


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Sourcing mechanisms orientedtowards international suppliers

High wasteage due to greaterperishablity of imported products

untimely account settlement

with agri-producers

WEAKNESSESPROCESS

PROCUREMENT (BUYER)


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inability to meet marketrequirements (re volumes and

quality) and to compete

effectively with importedproducts

Inadequate market information

systems

Mistrust by agri-producers ofcommercial marketingintermediaries due to perception

of exploitation

WEAKNESSESPROCESS

MARKETING AND SALES


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Limited negotiating skills forbuilding partnerships

Inadequate management andoperational capacities

WEAKNESSESPROCESS

HUMAN RESOURCE & MANAGEMENT


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Multiplicity of Institutions andagencies with little coordination

and potential for conflict

Inadequate communication and

information systems to supportstrategic and operationaldecision making

Value-chain activities not

coordinated or integrated

WEAKNESSESPROCESS

INSTITUTIONAL INFRASTRUCTRUE


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Apparent disconnect andgeneric nature of policies relatedto agri-tourism linkages

Fragmented institutional and

legislative framework

Tendency to overlook external

threats

WEAKNESSESPROCESS

GOVERNANCE & EXTERNAL


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THE BIG PICTURE

CHALLENGES

Create a strategic competitive advantageusing AGRO-TOURISM as the vehicle forentry into the global agri-food value-chainsand markets

Developing an overarching AGRO-TOURISMPOLICY aimed at achieving internationalcompetitiveness [All Ministries] There must

be a formal agreement among agriculture,tourism, environment, health, trade andindustry


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THE BIG PICTURE

CHALLENGES

Food Value-Chain Operators understanding

the new environment the value chainswithin agriculture and within tourism.

Building systems to manage simultaneouslyTHREE industry value-chains (agriculture,tourism and environment) that are focused on

producing value added products


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THE BIG PICTURE

CHALLENGES

Building trust between public/private sectors

(in all three industries) in order to have acompetitive machine

Using tourism and environmental informationto position agricultural goods and servicesand/or create and supply needs in the

generating markets.


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STRATEGIC DIRECTION

Tourism sectorshould encourage its

stakeholders to use raw, minimal and valueadded products produced from agriculture inthe development and promotion of the

tourism product.

Tourism sectorshould Embrace and train

members of the agriculture sector in thephilosophy of community tourism.


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STRATEGIC DIRECTION

Agricultural sectorshould facilitate the

development of the product and service valuechain necessary for minimal and value addedproducts.

Agricultural sectorshould agree to developsmall business enterprises capable ofmeeting and maintaining the standards

necessary for a tourism productfocus onhealth and safety.


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STRATEGIC DIRECTION

Environment should work with agriculture

and tourism to develop scientificallyappropriate attractions, adventure tours andcommunity-based products.

Environment shouldensure that allinternational standards are developed as a

part of the competitive strategy for thecountry.


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REFERENCES

The Concept of Agro-Tourism. Dr. Carolyn Hayle. October 2007 National Strategy for the Promotion of Agri-tourism Linkages in Barbados;

AGRICO Ltd

Value Chain: Information as a Competitive Driver. Frank Lam; Nassau, TheBahamas, December 2008

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