ISLAMIC REPUBLIC OF IRAN

JIHAD-E-AGRICULTURE MINISTRY

Promoting Agricultural Value Chains in the

OIC Member

Dr. MAHDI KAZEMNEJAD

Director General

Office for Economic Affairs

6 th Meeting of Agriculture Working Group

8 th October 2015

ANKARA - TURKEY

Agricultural jobs are The important economic business in the world and Islamic countries. They basically give gift political, economic and social security to countries. We know agriculture occupies are very important from view point of value added creation therefore it’s necessary to develop value chain management.

Agriculture expression in Iran The statistical of agriculture products

is following as below table: Item Subdivision Amount

1 Agronomy 73725 Thousand Tons

2 Horticulture 16525 Thousand Tons

3 Livestock and poultry

12621 Thousand Tons

5 Fishery 946 Thousand Tons

6 Forestry and pasture 99000000 Hectares

Source: statistical book of agriculture( volume 1&2)

IRAN’S Agriculture Economic in a glance

Economic factors

Amount(%)

Value Added

10

employee 18

value chain management

Value chain management views the flow up , from the consumer to the source.

Value chain management also concerns with the flow of production, but it has a different view than supply chain management.

The consumer is viewed as source as the source of value within this approach to management.

The demand for products create by consumers drives product value .

The primary focus for value chain management is the creation of value and not the cost of goods.

Fundamental activities of value chain management

• human resource

• Marketing

• Production

• Logistic

• Agribusiness

Value chain From another point focus on below items:

Product testing(quality)

Innovation

Research and Development

marketing

An Agriculture Value Chain(AVC)

AVCs are the sequence of steps from production through delivery of a product to the consumer, which includes feedback between the participants in the chain to create efficiencies and to provide more desirable and better quality products.

AVCs will offer opportunities at each link for increasing productivity , reducing waste and loss, providing economic and social benefits, and protecting the environment and natural resources.

value chain Analysis

• An agricultural value chain is composed of all the activities that occur from the production to the final consumer.

• value chain management is the integrated planning, implementation, coordination and control of all business processes and activities necessary to produce and deliver, as efficiently as Possible, products that satisfy market requirements.

• International experiences have often demonstrated that chain analyses can be important tools in efforts towards the enhancement of performance of agricultural systems.

• By revealing Strengths, Weaknesses, Opportunities and Threats (SWOT) such analyses help chain stakeholders and policy-makers to delineate corrective measures and to unleash the development of areas and activities where the potential for growth is identified.

value chain Analysis

• The research assess issues of the development of potato value chain, as an important highlands crop in Iran and It’s an AVC theme , by a SWOT analysis.

• Stability of production and controlling domestic market and price. • Developing potato quality (producing organic and healthy potato). • Improving new technologies and methods for producing potato. • Developing mechanization in cultivating, growing and harvesting

stage of production • Then, we present some recommendation to improve value chain

performance in areas like providing inputs, mechanization, processing, production, distribution and so on.

• Finally, new strategies have been considers for developing value chain in Iran.

Value Chain Analysis

I.R.IRAN’s experiences

value chain analyses in Poultry meat supply

Creation of efficient structure

The Improving economic indicators (Feed Conversion Ratio, losses, etc.) Export production and increase competitiveness Use of new technologies and more efficient production and

efficient professionals entrance to the production of poultry meat

Capital and management support to small farms and help

farmers to increase income

Increasing productivity

The condition of poultry industry in the Favorable business environment

Reduce volatility and provide stable production Developing market The Central decision-Making to focus on business activities in order to earn more profits for chain Increase flexibility and reliability and ability to meet customer requirements Reduce the risks of investment and production

The condition of poultry industry in the Favorable business environment

- 1 Recognition of integrated production structure

- Recognition by organizations and agencies related to the poultry industry,

including the Department of Planning and Strategic Supervision, the Ministry

of Economy, Ministry of industry and trade, banking system and ...

Issuing licenses to companies which have integrated production chain- 2

- Regulations licensing of integrated unit

Requirements for the reform of business environment, according to findings

16

3-State support of the integrated production chain

- The provision of liquidity (working capital) for companies with integrated chain

- Notification to various departments to carry out the necessary reforms in the

provision of services

- Making culture by organizing seminars, conferences and ….

Requirements for the reform of business environment, according to findings

17

4-The formation of an integrated organization includes all rings production in the

poultry industry

- Guiding company with integrated production chain to form a unit organization

–Prepare bill or consolidate plan organizations subsection the poultry industry in the

form of law

5 - Poultry Industry Strategic forming committees and Advisory working groups

related to it

-The Strategic committee with the participation of experts From private sector,

academia and related organizations

Requirements for the reform of business environment, according to findings

18

1 - Focusing decisions poultry industry

-The Low of Focusing duties and authority Of agricultural trade in the jihad

agriculture ministry.

2- Complete the rules and regulations payment facilities based on the new

structure

Centralized credit allocation to chain companies and announce issue-

To banking system

- Guideline provision for the allocation of facilities to chain companies by

Agricultural Bank

Necessary reforms in laws and regulations

19

3-Tariff and tax reform based on the product

-Follow up to enjoy tax exemptions for all chain companies

4- Complete rules and regulations on health monitoring production and supply of

poultry meat

-It is being provided by veterinary organization

5-Solving obstacles and difficulties relate to partnership contract in the different

rings of chain companies

Necessary reforms in laws and regulations

20

good Practices

Fifth Five Year Socio Economic and Cultural development Plan of Islamic Republic of Iran

Supporting production of agricultural crops through compensating parts of subsidy on interest and

commission of banking facilities, gratuitous aids, subsidy payments and other incentives with a priority

for those observing the optimum cropping pattern at national and regional level. From the beginning of the 5th Five Year Plan, the Ministry of Commerce and other legal or individual

persons, whether government or non government, for importing agricultural commodities or products,

processed or raw, or primary food material required for food and processing industries, are obliged to get

permission from the Ministry of Jihad-e- Agriculture. In order to support domestic products, the

government is required to enact effective tariff for import of all agricultural commodities and products so

that the terms of trade remains in favor of domestic producer. Activities such as production, processing, storing, quarantine and marketing of products, inputs and

agricultural new emerging commodities, provision of modern agricultural services, process certifying

agencies will be based on criteria, regulations and standards given during the first year of the Plan by the

Ministry of Jihad –e Agriculture and ratified by cabinet.

Iranian Strategies for Developing value Chain

Article 145: For enhancing economic and competitive of production and increasing export of agricultural commodities, reorganizing resource management, protection of base resources and value addition and completion of value chain of agricultural products the following activities are to be implemented:

Iranian Strategies for Developing Supply Chain Law of Increasing Productivity of Agricultural sector and Natural Resources

Article 31: From the date of ratification of this law, the government

is required to compile and provide legal support to the producers of

agricultural and natural resources sector, with priority for production

of the following crops:

Special crops: Crops of having maximum value of production in

terms of consuming inputs or create bigger circle in the value

chain and can be pivot for the growth of agriculture sector or in

terms of export comparative advantages supply at least 10 percent

of the share of the world's export.