Couple of weeks back, the CEO of one of the farms I work with, called me in and said, " I am tired of this agric business, it pays less, looks to me like you just work for others to eat, Fishes i raised for average for 5 to 8 months, a buyer comes in and get at 550/600 naira per 1, then he goes to an hotel, bar or road side, create a mini processing facilities, make barbecue or pepper soup, sells the head for 1000 naira, and the tail for 1500, I feel cheated. The Mallam that came to buy on my farm, or the pepper soup woman has made 2500 naira from the fish he got from me at 500 naira". Familiar sorry, I smiled and said to her, what this person has done is to add value to the raw fish she got from you, with minimum Maggi, tomatoes and pepper cost, then sell for you at triple the price. That moment I decided I will write on value addition, but along the line, I got busy and it escaped my head.
Few days back I saw some pictures from a friend of mine who is into rabbit Farmers, of various processed forms of his rabbit, from smoked, to roasted to garnished. These pictures were a timely reminder on the value addition topic.
For me, the fish Farmer story above has been the problem of traditional farmers all along across regions. And this is what separate an agribusiness person from a traditional farmer. A farmer just farms, while a business oriented farmer farms to make more profit by making lots of products out of his raw agricultural produce.
What is Value addition.
A broad definition of value added is to economically add value to a product by changing its current place, time and from one set of characteristics to other characteristics that are more preferred in the marketplace. As a specific example, a more narrow definition would be to economically add value to an agricultural product (such as wheat) by processing it into a product (such as flour) desired by customers (such as bread bakers).
Approaches to Adding Value
Adding value to products can be accomplished in a number of different ways, but generally falls into one of two main types: innovation or coordination.
Innovation
Innovation focuses on improving existing processes, procedures, products and services or creating new ones. Often, successful value-added ideas focus on very narrow, highly technical, geographically large markets where competition is sparse. Innovative value-added activities developed on farms or at agricultural experiment stations are sources of national growth through changes either in the kind of product or in the technology of production. By encouraging innovative ideas, adding value becomes a reality.
For example in the Ilorin environment, lots of farmers are into rabbit, but not a lot have been innovative enough to look towards the direction of value addition. Sultan rabbit is about the few ready to capture the rabbit farming business value, by making an attempt towards processing, adding value and packaging rabbit. That is innovative. To make the difference in the agric market, and to stop middle men from reaping you off all your profit, you need to be innovative in trying to add value to your product.
Coordination
Coordination focuses on arrangements among what you produce and market farm products. Horizontal coordination involves pooling or consolidation among individuals or companies from the same product. Take for example, from cassava produced by your farm, a well coordinated value addition can give you Garri, water pressed out of the grated Garri can be collected, processed to give you starch, and the cassava peels can be sundry to give you a ruminate feed which can be bagged and sold to goat and sheep farmers.
Any difference in the money you will make from these proceses described above as compare to selling your cassava off as a whole tuber??
Wake up farmers, and be more business minded. If what it takes you is to have your own mini processing plant and shop outlet where you can sell your farm output and processed product directly to final comsumer, then I will say, get these things planned out and executed.
Conclusion.
It is not enough to farm alone, we must farm to make profit. And value addition and processing is the key money making mechanism in the agribusiness chain. Selling off our raw product may be logical in some circumstances, but are not always the best in most cases. Look at whatever product you are producing now and start thinking of how you can add value to it, package it to make more out of it and distinguish yourself from the traditional farmers.
Aliyu Ahmed Olanrewaju
Researcher / Agribusiness Consultant.
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