To increase productivity, yields and variety of products
AS a consumer, how do you value a pack of chillies that you buy at the supermarket?
You may perceive the value according to the benefits you gain over what is paid – such as the product quality, brand and user experience.
In this case, if the pack of chillies is packed with information stating its origins, product certifications, and states its sustainability efforts in farming, the value of the chillies to the informed consumer would be far greater than compared to a pack of unidentified produce.
Rewind and return to the supply chain journey of the chillies before reaching the customers.
The usual chain would be the farmer selling the chillies to the trader, who will supply to the wholesaler who will then deal with the retailer, where the customers have access to the chillies.
Everyone who participates in a value chain adds value as the product moves from the beginning of the chain towards the consumer and in return, receives their returns, i.e. profits, of their contribution.
However, some individual farmers may lack bargaining power and information about the market for their produce.
For instance, they may not know how much their produce is really worth or they may not know what kind of products are in demand, therefore, they can’t benefit fully from the value chain.
To increase their income and capture more value in the value chain, stakeholders, especially the small farmers, need to advance their knowledge and information transfer of the value chains.
As such, the development concept of the Agrofood Value Chain that stems from the Agrofood Productivity Nexus (AFPN) is in recognition of the critical need for investment in agricultural information access in Malaysia. AFPN is supported by the Malaysia Productivity Corporation (MPC).
The agriculture sector is equally important in ensuring food security for growing populations and providing economic security for stakeholders of the agrofood value chains from farm to table – including farmers, retailers, suppliers and customers.
Agrofood value chains in the country must undergo innovation to increase productivity and yields as well as to enhance product variety to meet the demands of the growing market.
The proposition to develop the Agrofood Value Chain is a challenging task due to multi-dimensional issues such as constraints of production capability, organisation capacity of producers, regulation constraints of export and trade, identification of markets, and marketing competitiveness.
“This proposition of developing the Agrofood Value Chain seeks to eliminate all of these constraints, ” said AFPN productivity specialist Kit Chan.
“It is necessary for us to raise this concept so the authorities and those involved are able to come up with better policies for the agrofood industry while stakeholders learn to capture these values for their commercial participation. When they understand, they can benefit better or invest their money for the correct value.”
The Nexus Agrofood Value Chain strategy is to create access to markets that appreciates the products based on several aspects.
“First is to identify and moderate producers to develop products with competitive advantages and value addition. For instance, farmers who appreciate and are proud to grow high-value chillies.
“Second is to initiate negotiations for cross border trade, like, exporting to Singapore and regional countries but ensuring the authorities acknowledge the value of our products.
“Before exportation, a phytosanitary certificate plays an important role to ensure the exported produce conforms with the requirements of the importing country, and good agricultural practice which emphasises on environment, economy and social aspects to ensure the produce is safe and of good quality.
“This translates to the aspects of promoting both the Malaysian Phytosanitary Certification Assurance Scheme and Malaysian Good Agricultural Practices (MyGAP) certification to the agrofood industry players as a value-addition component to their products.
“Lastly, is to develop the e-traceability system for the product supply chain. This system would be a valuable tool for guaranteeing consumers transparency on the origins of the product – how it was grown, processed and packed before reaching the consumers, ” explained Chan.
The strategy did not just turn up overnight but after 20 months of AFPN’s effort and ground work of identifying issues faced by the agrofood industry, building the ideal infrastructure and tools for stakeholders, and promoting value addition to potential products being identified.
Meanwhile, value chain activities are being carried out through the AFPN and among the ongoing projects on the agrofood web portal, the AgrolinkMalaysia.com, which can provide easy-to-access information and enable commercial connectivity to the supply chain stakeholders of the agrofood production industry for free.
By making information accessible, stakeholders get the opportunity to stay abreast with the current trends, learn new skills and adopt improved practices that are essential to raise the productivity of their businesses.
“MPC, under the Nexus programme, has given us the opportunity to investigate all different approaches to develop the agrofood value chain for the country.
“It is important for all stakeholders to understand each other’s roles and communication is key to bring the whole agrofood industry forward.
“For example, farmers will know what produce or products are in demand while consumers will know the value of these products, ” explained Chan.
AFPN urged the value chain stakeholders to leverage on the complimentary infrastructure that has been developed to boost productivity growth and sustainability, and at the same time progress the agrofood industry forward.
To gain the free and easy access to information and linkages of Malaysia agrofood industry, visit www.agrolinkmalaysia.com
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