The Most Profitable Value Chains In Agribusiness

Value Chains In Agribusiness In Kenya: Agribusiness covers all business transactions that depend on agriculture either directly or indirectly. Food products are meant to move from the farm to consumers’ table. There are separate but dependent chains that facilitate the production and distribution of food to its final destination.

Many people are oblivious of the opportunities that can be tapped into in Agribusiness. Although, the government still needs to do a lot to help agriculture thrive in the country, especially to those in the production stage of the agricultural value chain.

In this piece, I have highlighted the four distinct stages in the agricultural chain. Once you gain insight into what purposes each serve, you’d be able to carefully select the one that interests you the most.

These value chains are:

• Agricultural inputs
• Production (Crops planting & Livestock rearing)
• Agricultural products processing
• Finished or semi-finished goods distribution

AGRICULTURAL INPUTS 

Farming activities, whether crops or livestock, require some inputs to run effectively. Supplying these inputs to farmers is a business on its own that you can venture into. Some common inputs are listed below for both crop and animal production.

Before that, just a simple reminder that Farmers Trend has a new Online Virtual Agrovet that supply most of these inputs to farms regardless of your location.

• The service of real estate agents for agricultural land purchase
• The service of soil scientists to analyze the soil before planting.
• Service of an engineer to construct structures like pens for some animals, barn or silo for storage, even a greenhouse, etc.
• Farm machines rentals for farming activities.
• Service of workers to work on the farm or manage the farm.
• Agents that supply chemicals like pesticides, fertilizers, herbicides, etc.
• Service of a veterinary doctor or a pyhtopathologists.
• And many more………..

PRODUCTION VALUE CHAIN

This is the value chain that is generally referred to as agribusiness. It comes to mind whenever agriculture is mentioned. In this section, workers here are experts who actually grow crops and rear animals to market size before releasing them to the next group in the chain.

The activities here are pretty straightforward because farmers practically grow crops and rear animals using the inputs supplied. Unlike others in the chain, this aspect is delicate, requires a level of expert knowledge, and quite risky.

As a farmer, you call for inputs based on your discretion and experience. A mistake can ruin everything one has done from the beginning. Fortunately, the good news is that, once you take time to learn the ropes before delving into this, your chances of making mistakes are extremely low, unlike if you don’t go for training at all.

AGRICULTURAL PRODUCTS PROCESSING

The products from the previous stage are passed to this stage which deals in processing the products into finished or semi-finished products. Usually, this stage is dominated by companies that are reasonably big because of the cost of setting up a processing structure on a large scale.

Despite the huge capital often associated with this stage, there is still room for you to start on a small scale while growing steadily. The burden of storage is mostly laid on operators in this stage. In fact, the storage of farm produce is a business on its own. Some of the products gotten from the farm and processed are:

• Avocado fruits processed into avocado oil.
• Tomato processed into tomato paste
• Cocoa processed into milo
• Wheat, barley processed into beverages
• Fruits processed into fruit drinks
• Grapes processed into wine
• Animal milk processed into a final form
• Animals killed and processed into ready-to-wear meat
• And many more…….

There are instances when products move directly from the production stage to distribution stage, skipping the processing stage in the chain. Farm products such as eggs, Live chicken, Tomatoes & pepper, fruits like cucumber, etc are taken directly from the farm to the distribution stage without necessarily getting processed at all.

FINISHED PRODUCTS DISTRIBUTION

This is the final stage in the agribusiness value chain where food products are delivered to the consumers. Although, it is possible that the distribution stage might still be broken down into stages like distributor, wholesaler, and retailer.

Products already processed are picked from the farms or processing industries, packaged and sold to the consumers. This stage requires the services of:

• Drivers to transport goods from one place to another.
• Sales representative to devise strategies that will drive sales.
• Warehouses to store finished products before moving it to the market.
• And many more…….

Of all the stages in this chain, the people presently in the production stage are not enough to take Kenya to the level of self-sufficiency. However, it is believed that once investments start rolling in from private pockets or the government’s purse, things will start falling in place.

CONCLUSION

Agriculture is fun and profitable if done the right way. Regardless of which stage you are in the agribusiness chain, you are contributing one way or the other to the growth of agriculture in the country.

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