Strong case for value chain system in agriculture

Updated at 12:10am on September 11, 2018

Participants in a seminar on sustainable farming in Dhaka on Sunday rightly said that the absence of functional value chains makes farmers and consumers losers. They said that in Bangladesh, the quality of agricultural products is compromised mainly for the lack of functional value chains, exposing public health to unsafe and contaminated food. Value chains could make cultivation of certain agricultural produces profitable by adopting a value chain as a thread that binds actors in designing, production, marketing and distribution of a product. The concept has been used since the beginning of the millennium, primarily by people working in agricultural development. It normally refers to the whole range of goods and services necessary for an agricultural product to move from farmers to consumers. At the heart of the concept is the idea of actors connected along a chain producing and delivering goods to consumers through a sequence of activities. This chain has been found useful in that it has resulted in a consideration of all factors impacting the ability of farmers to access markets profitably. The value of functional value chains in agriculture, therefore, cannot be dispensed with.
The rice procurement programme of the government has hardly been above and beyond any question or controversy. Let alone allegations of mismanagement and irregularities, which have often marked the procurement, there have been a question as to whose interest this programme is meant to protect — farmers, millers or their middlemen? It is important to note that small and medium farmers still majorly contribute to the annual rice production and have to sell their produces soon after the harvest for meeting the cost of their everyday life and repaying loans, in many cases, collected from local loan sharks. A major objective of the value chain development work is concerned with ways of linking farmers to companies. Such arrangements involve farmers in contract farming in which farmers undertake to supply agreed quantities of a crop or livestock product, based on the quality and standard and delivery requirements of the purchaser, often at a price that is established in advance. Companies also agree to support farmers by way of input supply, land preparation, extension of advice and transportation of the produce. Agricultural value chain finance is concerned with the flow of funds within a value chain to meet the needs of chain actors for finance, to secure sales, to buy inputs or produce, or to improve the efficiency.
The government needs to realise that repeated instances of farmers selling produces at prices lower than the production cost have already left many farmers broke. To avert this situation, it needs to introduce the agricultural value chain system which would ensure that agricultural goods are quality products and devoid of any harmful impact on consumers, and that farmers are not broke because of lower selling price than the production cost.