Value-added agriculture

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Value-added agriculture refers most generally to manufacturing processes that increase the value of primary agricultural commodities. Value-added agriculture may also refer to increasing the economic value of a commodity through particular production processes, e.g., organic produce, or through regionally branded products that increase consumer appeal and willingness to pay a premium over similar but undifferentiated products. It can also be described as the process that transforms the raw agricultural product into something new through packaging, processing, cooling, drying, extracting, and other processes that change a product from its original raw form. [1] As a result of this transformation, the customer base of a product and revenue sources for the producer are expanded. [2]

In this strategy, farming is no longer confined to the cultivation of vast tract of land or the care for a large number of animals in order to be profitable. Here, even those who own less than an acre could achieve viable farming simply by extending an agricultural product's potential so that its saleability is enhanced. [3] For example, if a producer farms strawberries, he should not only sell the crop as fresh berries since he could also profit from its other portions by producing other products such as strawberry jelly and syrup. [3]

High-demand

This concept has gained currency in the small farm policy debate, in response to the concern that the farm value of the consumer food dollar continues to decrease. Value-added agriculture might be a means for farmers to capture a larger share of the consumer food dollar. Examples include direct marketing; farmer ownership of processing facilities; and producing farm products with a higher intrinsic value (such as identity-preserved grains, organic produce, organic beef, free-range chickens; etc.), for which buyers are willing to pay a higher price than for more traditional bulk commodities. The key for the higher returns is the high-demand in product niches and this is demonstrated in the popularity of products such as garlic braids, bagged salad mix, artisan bread, lavender soaps, and sausages, among others. [1]

Value-added agriculture is regarded by some as a significant rural development strategy. In the United States, this is considered a way for producers not only to increase their income but also compete with commodity marketers and upstream processors. [4] Small-scale, organic food processing, non-traditional crop production, agri-tourism, and bio-fuels development are examples of various value-added projects that have also created new jobs in some rural places. This favorable condition is encouraged by the increasing market segmentation which creates an uptick in the demand for high-quality and differentiated agricultural products. [4] According to a study, value-added agriculture allows farmers to capture as much as 80 percent of the value of most of their agricultural produce. [5]

Related Research Articles

The following outline is provided as an overview of and topical guide to agriculture:

<span class="mw-page-title-main">Agricultural Adjustment Act</span> United States federal law of the New Deal era

The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, also called "AAA" (1933-1942), an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.

<span class="mw-page-title-main">Farm</span> Area of land for farming, or, for aquaculture, lake, river or sea, including various structures

A farm is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production. The name is used for specialized units such as arable farms, vegetable farms, fruit farms, dairy, pig, and poultry farms, and land used for the production of natural fiber, biofuel, and other commodities. It includes ranches, feedlots, orchards, plantations and estates, smallholdings, and hobby farms, and includes the farmhouse and agricultural buildings as well as the land. In modern times, the term has been extended so as to include such industrial operations as wind farms and fish farms, both of which can operate on land or at sea.

<span class="mw-page-title-main">Organic farming</span> Method of agriculture meant to be environmentally friendly

Organic farming, also known as ecological farming or biological farming, is an agricultural system that uses fertilizers of organic origin such as compost manure, green manure, and bone meal and places emphasis on techniques such as crop rotation and companion planting. It originated early in the 20th century in reaction to rapidly changing farming practices. Certified organic agriculture accounts for 70 million hectares globally, with over half of that total in Australia. Organic farming continues to be developed by various organizations today. Biological pest control, mixed cropping, and the fostering of insect predators are encouraged. Organic standards are designed to allow the use of naturally-occurring substances while prohibiting or strictly limiting synthetic substances. For instance, naturally-occurring pesticides such as pyrethrin are permitted, while synthetic fertilizers and pesticides are generally prohibited. Synthetic substances that are allowed include, for example, copper sulfate, elemental sulfur, and ivermectin. Genetically modified organisms, nanomaterials, human sewage sludge, plant growth regulators, hormones, and antibiotic use in livestock husbandry are prohibited. Organic farming advocates claim advantages in sustainability, openness, self-sufficiency, autonomy and independence, health, food security, and food safety.

<span class="mw-page-title-main">Agricultural subsidy</span> Governmental subsidy paid to farmers and agribusinesses

An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

<span class="mw-page-title-main">Conservation agriculture</span> Farming system to preserve and regenerate land capacity

Conservation agriculture (CA) can be defined by a statement given by the Food and Agriculture Organization of the United Nations as "Conservation Agriculture (CA) is a farming system that can prevent losses of arable land while regenerating degraded lands.It promotes minimum soil disturbance, maintenance of a permanent soil cover, and diversification of plant species. It enhances biodiversity and natural biological processes above and below the ground surface, which contribute to increased water and nutrient use efficiency and to improved and sustained crop production."

<span class="mw-page-title-main">Community-supported agriculture</span> Type of sharing system for food production and distribution

Community-supported agriculture or cropsharing is a system that connects producers and consumers within the food system closer by allowing the consumer to subscribe to the harvest of a certain farm or group of farms. It is an alternative socioeconomic model of agriculture and food distribution that allows the producer and consumer to share the risks of farming. The model is a subcategory of civic agriculture that has an overarching goal of strengthening a sense of community through local markets.

<span class="mw-page-title-main">Organic certification</span> Certification process for producers of organic food and other organic agricultural products

Organic certification is a certification process for producers of organic food and other organic agricultural products, in the European Union more commonly known as ecological or biological products. In general, any business directly involved in food production can be certified, including seed suppliers, farmers, food processors, retailers and restaurants. A lesser known counterpart is certification for organic textiles that includes certification of textile products made from organically grown fibres.

Agribusiness is the industry, enterprises, and the field of study of value chains in agriculture and in the bio-economy, in which case it is also called bio-business or bio-enterprise. The primary goal of agribusiness is to maximize profit while satisfying the needs of consumers for products related to natural resources such as biotechnology, farms, food, forestry, fisheries, fuel, and fiber.

<span class="mw-page-title-main">Food industry</span> Collective term for diverse businesses that supply much of the worlds food

The food industry is a complex, global network of diverse businesses that supplies most of the food consumed by the world's population. The food industry today has become highly diversified, with manufacturing ranging from small, traditional, family-run activities that are highly labour-intensive, to large, capital-intensive and highly mechanized industrial processes. Many food industries depend almost entirely on local agriculture, animal farms, produce, and/or fishing.

<span class="mw-page-title-main">Smallholding</span> Small farm, often for a single family

A smallholding or smallholder is a small farm operating under a small-scale agriculture model. Definitions vary widely for what constitutes a smallholder or small-scale farm, including factors such as size, food production technique or technology, involvement of family in labor and economic impact. Smallholdings are usually farms supporting a single family with a mixture of cash crops and subsistence farming. As a country becomes more affluent, smallholdings may not be self-sufficient, but may be valued for the rural lifestyle. As the sustainable food and local food movements grow in affluent countries, some of these smallholdings are gaining increased economic viability. There are an estimated 500 million smallholder farms in developing countries of the world alone, supporting almost two billion people.

<span class="mw-page-title-main">Agriculture in India</span> History of agriculture in India

The history of agriculture in India dates back to the Neolithic. India ranks second worldwide in farm outputs. As per the Indian economic survey 2018, agriculture employed more than 50% of the Indian workforce and contributed 17–18% to the country's GDP.

<span class="mw-page-title-main">Organic coffee</span>

Organic coffee is coffee produced without the aid of artificial chemical substances, such as certain additives or some pesticides and herbicides.

<span class="mw-page-title-main">Industrial agriculture</span>

Industrial agriculture is a form of modern farming that refers to the industrialized production of crops and animals and animal products like eggs or milk. The methods of industrial agriculture include innovation in agricultural machinery and farming methods, genetic technology, techniques for achieving economies of scale in production, the creation of new markets for consumption, the application of patent protection to genetic information, and global trade. These methods are widespread in developed nations and increasingly prevalent worldwide. Most of the meat, dairy, eggs, fruits and vegetables available in supermarkets are produced in this way.

<span class="mw-page-title-main">Organic farming by continent</span>

Organic farming is practiced around the globe, but the markets for sale are strongest in North America and Europe, while the greatest dedicated area is accounted for by Australia, the greatest number of producers are in India, and the Falkland Islands record the highest share of agricultural land dedicated to organic production.

<span class="mw-page-title-main">Organic food</span> Food complying with organic farming standards

Organic food, ecological food, or biological food are foods and drinks produced by methods complying with the standards of organic farming. Standards vary worldwide, but organic farming features practices that cycle resources, promote ecological balance, and conserve biodiversity. Organizations regulating organic products may restrict the use of certain pesticides and fertilizers in the farming methods used to produce such products. Organic foods are typically not processed using irradiation, industrial solvents, or synthetic food additives.

The term food system describes the interconnected systems and processes that influence nutrition, food, health, community development, and agriculture. A food system includes all processes and infrastructure involved in feeding a population: growing, harvesting, processing, packaging, transporting, marketing, consumption, distribution, and disposal of food and food-related items. It also includes the inputs needed and outputs generated at each of these steps. Food systems fall within agri-food systems, which encompass the entire range of actors and their interlinked value-adding activities in the primary production of food and non-food agricultural products, as well as in food storage, aggregation, post-harvest handling, transportation, processing, distribution, marketing, disposal, and consumption. A food system operates within and is influenced by social, political, economic, technological and environmental contexts. It also requires human resources that provide labor, research and education. Food systems are either conventional or alternative according to their model of food lifespan from origin to plate. Food systems are dependent on a multitude of ecosystem services. For example, natural pest regulations, microorganisms providing nitrogen-fixation, and pollinators.

<span class="mw-page-title-main">Agricultural marketing</span> Process of moving agricultural products from the farm to the consumer

Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. These services involve the planning, organizing, directing and handling of agricultural produce in such a way as to satisfy farmers, intermediaries and consumers. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing and packaging, transport, storage, agro- and food processing, provision of market information, distribution, advertising and sale. Effectively, the term encompasses the entire range of supply chain operations for agricultural products, whether conducted through ad hoc sales or through a more integrated chain, such as one involving contract farming.

A You-Pick ("U-Pick") or Pick-Your-Own (PYO) farm operation is a type of farm gate direct marketing (farm-to-table) strategy where the emphasis is on customers doing the harvesting themselves and agritourism. A PYO farm might be preferred by people who like to select fresh, high quality, vine-ripened produce themselves at lower prices.

In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and labour to other products and, particularly in richer countries, to non-farming activities such as restaurants and shops. Factors leading to decisions to diversify are many, but include: reducing risk, responding to changing consumer demands or changing government policy, responding to external shocks and, more recently, as a consequence of climate change.

References

  1. 1 2 "Exploring Value-Added Agriculture | Small Farms Programs". smallfarms.oregonstate.edu. Retrieved 2018-08-06.
  2. "USDA Value-added Ag Definition | Agricultural Marketing Resource Center". www.agmrc.org. Retrieved 2018-08-06.
  3. 1 2 Noble, Darla; Davidson, John (2014). Turns Out you Can Grow Money - The Basics of Value-added Agriculture. Mendon Cottage Books. p. 8. ISBN   9781310174254.
  4. 1 2 Kelsohn, Caroline (2002). Rural America. New York: Nova Science Publishers, Inc. p. 60. ISBN   1590335007.
  5. Mani, Gyanendra; Joshi, P.K.; Ashok, M.V. (2017). Financing Agriculture Value Chains in India: Challenges and Opportunities. Singapore: Springer. p. 247. ISBN   9789811059568.