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Agriculture Value Chain Development

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Background

Growth and development of agricultural value chains for local and external markets can be considered as a powerful tool for poverty reduction and to fight against the challenge of food-security in developing countries like India. This particularly makes a strong case in India where farmers are able to produce agricultural products, such as fresh fruits and vegetables that have higher potential for value addition as compared to conventional crops, and if access is made available to processing, marketing and distribution, which could enhance the value of the final products.

Fuelled by these new strategic directions, there is significant demand by value chain actors for technical assistance, improved production technologies, business development services and linkages to markets along value chains. However, limited access to input and output markets constrain smallholder agricultural development in India. Lack of knowledge and limited capacities of public and private agents to undertake market-led agriculture development also hamper growth.

What is value chain development?

A value chain brings all the stakeholders engaged in the production system on a common platform to contribute their best, while ensuring fair deal and transparency.  The value chain includes all the input suppliers, technology delivering agencies, scientists indirectly engaged in developing appropriate technologies and extension officers who are involved in capacity building and providing various services to farmers.  The stakeholders involved in post-production activities are the agencies organising collection, grading, storage, transportation, processing and marketing of the produce.  Agencies like financial institutions and market information centres are also part of the value chain.  Efficient linkage of various stakeholders improves production, price realisation and profitability.

What is a value chain development intervention?

Concerted activity to drive value chain development of a certain kind. Value chain development interventions can focus on improving business operations at the level of producers, processors and other actors in the chain and/or the (contractual) relationships among them, flow of knowledge and information and innovation. Value chain development can also foster overall coordination in the chain; participation of selected beneficiaries in local, national or global value chains; reduction of entry barriers and a higher share of value addition for certain actors.

ICCo value chain approach

ICCo is pursuing a market-oriented agricultural development strategy to increase agricultural production and improve the livelihoods of smallholders. An approach to development which puts at the centre the interrelatedness of actors in the value chain who – separated by time and space – gradually add value to products and services as they pass from one link in the chain to the next.

Production

Storage

Processing

Traders

Retailers

Consumers

While designing Value Chain Development activities ICCo follows following steps of project cycle:

  • Value Chain Selection & Validation
  • Value Chain Analysis through Market for Poor (M4P) approach
  • Design of Value Chain Interventions
  • Implementation planning
  • Technical handholding
  • Processing and Packaging support
  • Linking to the market
  • Designing product, based on market requirement.
  • Monitoring and Evaluation of VC activities through tools like Akvo.

ICCO and its Agri based portfolios and partnerships

North Eastern Rural Livelihood Promotion Society (NERLPS)  is a joint venture between ICCO Cooperation, World Bank and North East states of India, where one of the prime objectives is to develop 4 piggery value chains and increase income by 30% for each of the participating actors. It is being Implemented across 4 states seeking to empower rural poor and improve livelihoods of about three lakh households in 1,624 villages under 58 block. ICCO has partnered NERLP as a Technical expert in developing livelihood models and Value Chains. ICCO is also implementing Ginger Value Chain in Sikkim covering 5000 farmers in two  project districts.

ICCo and Jharkhand State Rural Livelihoods Mission (JSLPS) partnered to establish a joint Value Chain Cell (VCC) in 2013. This Cell was initiated to strengthen value chain perspective in Mahila Kisan Sasaktikaran Pariyojana (MKSP) being implemented in Jharkhand. A road-map was prepared to guide the functioning of VCC team. Implementation of Chilli Value Chain and Tamarind Value Chain was effectively carried out through the partnership. A business model and road map to scale up the Lac drive in the region was also prepared. The VCC also implemented ‘36 x 36 model’ especially designed for the marginal and ultra poor farmers for their all year round income, food and nutritional security. The VCC team also carried out a  Millet Value Chain study. The platform set by VCC stood as a model that was appreciated by stakeholders including government, based on which new proposals from World Bank, UNDP and Annual Action Plan through NRLM were formulated and approved. These new projects envisaged to take up, upscale and replicate these value chains and livelihood activities with around 100,000 farmers in the next  5 years. This substantiated the clear acceptance of the ICCo Value Chain Cell in the livelihood sector.

C.K.UDYOG Pvt. Ltd. is an Assam based Apiary and manufacturer of Beekeeping Equipment’s, Bee Hive and Beekeeping Supplies with clients spread throughout North-East India. The company is also into production of Honey and processing and supply of honey products  to Assam and adjoining states like Arunachal Pradesh, Nagaland, Manipur and Mizoram. The entreprise has already gained experience in indigenous beekeeping and now is desirous of upgrading its apiary and production capacity with the European species of bee (apis mallifera) accompanied with the installation of honey processing and packaging plant.  ICCO’s Agri Business Booster (AbB)Program sees CK Udyog as an indigenous rural industry providing assistance to the growers so that production will increase and create employment in rural areas.  AbB along with C.K Udyog will  encourage the rural youth to take up the trade as a profession and give impetus to the rural development using indigenous skill. The AbB program will support C.K. Udyog , to purchase automatic honey processing machines and honey candy making machineries as well as market its product within India and also explore export options to european markets, resulting in increased  turnover and local employment generation.

Prachurya Agro Pvt. Ltd. (formerly Golden Broiler) is a Broiler Integrator company based out of Assam and is one of the emerging companies in the region. The company  has 20,000 Contract Broiler Farming per month placement associated with 60 farmers. The company provides free extension advisory and input services to the farmers as a complete package, which includes general farm management practices and specific management practices related to chicks, feed and medication. Through ICCO’s AbB program, the company plans to start retail outlets which will be first of its kind in the region. The outlet will ensure supply of hygienically cut chicken. The plan is also to link the Company to microfinance companies to provide contract farmers with  financial support  towards infrastructure/ working capital. AbB has already supported  the company to improve its accounting and book keeping through implementation of the finanace improvement project.

Symbiotic Foods Private Limited (SFPL)started its own breeding farm in April 2014 with 25 pigs. It focussed on producing quality, disease-free piglets. The company managed to produce 720 piglets in 2015. The piglets  are raised at the farm till 2 months of age, after which they are sold for €33 to the farmers, mainly in the tribal Boro community. In this raising time, the farmers can buy feed and medicine from SFPL. It also provides veterinary services and trainings. Symbiotic Foods buys the pigs back at a fair price based on its live weight, thus helping farmers secure a sustainable income. On an average, a farmer makes €65 profit per pig more, compared to other farmers. A farmer can earn € 520 annually through this activity, which means a huge social impact for tribal farmers. With ICCO’s AbB program support, Symbiotic Foods aims to upscale its production process and increase the number of piglets to 6,000 annually over a period of 5 years;  empower 3,000 farmers, mainly women, by increasing their income; And increase the income of farmers by 3 to 4 times.

ICCO – ACIAR Partnership for better services to farmers in India

Along its thematic expertise, ICCO in India in partnership with Business for Development (B4D) is exploring possibility of creating SMEs in the Agri and allied value chain in the Sustainable and Resilient Farming Systems Intensification in the Eastern Gangetic Plains (SRSFI) project. The SRFSI project is an undertaking of the Australian Center for International Agriculture Research that aims to enable at least 130,000 farmers to adopt technologies to improve their crop yields with a complementary component on scaling out (under design) to boost agricultural production and reduce rural poverty within the next ten years. In this relation, ICCO and B4D plans to set up extension center named “DeHaat” in rural area at panchayat level in order to deliver affordable farmers’ services (such as Seed, fertilizers, ICT based crop advisory, customized crop reminder calls, crop monitoring, market information and linkage etc at their doorstep). The aim is to enable farmers in getting access to all type of information & other agri related services through DeHaat. We plan in using in-house mobile technology “DeHaat” which will have web as well as mobile version to ensure that communication with field staff is efficient and a record of all data is maintained. Secondly, farmers will be organized in groups called farmer producer organization (FPO) to better link them to markets and all other facilities. We aim to reach to 750+ Maize farmers through 5 Farmer Service Centers (FSC) in Purnea & Madhubani district of Bihar and in next 2-5 years, replicate FSC services to 15,000+ farmers in a sustainable way.

Arohan Foods Pvt. ltd. follow a business model where they partner and source pigs directly from the farmers and the gains are passed on to the farmers in the form of a higher farm gate price for their animals, thus resulting in higher income for them. Healthy mature pigs are purchased from the farmers and brought to the factory, where the pigs are slaughtered, meat is processed, packaged, and sent to the market. Currently, Arohan Foods sources pigs from 8 districts of Assam and 2 districts of Meghalaya, through a vibrant network of 400 exclusive and 2000 associate farmers. Seeing the market potential for expansion, Arohan Foods entered into a partnership with ICCO Investments under which Arohan Foods plans to increase production capacity, build a model pig farm, and allied infrastructure.The capital support from ICCO Investments will help Arohan to increase its impact from 2,800 to 4000+ pig farmers, improve feed, vaccine and quality gene pool, enable training of farmers and improve efficiency of pig farming, and add back €6mn to the economy in 200 villages across 4 states by 2020.

Tata Steel  Rural Development Society (TSRDS) and ICCo will flag off their partnership with a Value Chain Analysis of few of the identified commodities sectors such as Chironji & Tamarind, Lac, Fisheries, and Cashew . Based on findings, a detailed intervention design will be prepared, as a final output for the preparatory phase. Given that the intervention phase will have requirements like  core implementation & capacity building support, technical support for both backward (management, harvesting, storage) and forward (processing, packaging, marketing) processes, Institutional development support, convergence facilitation etc, a mapping of potential agencies would also be undertaken.