What is value added agriculture

In India, we have a tradition of agricultural production and related commercial activities, the time has come to think of value adding activities. Therefore, the next logical step is value added agriculture. This will bring in added revenues as well as more gainful employment in India.

In agriculture, the term value added, is used when we talk about the profitability of agriculture. Value addition is the process of creating value in a product to acquire a greater portion of the value of that product at final sale.

Value added means different things to different customers. To a food customer, value added may indicate a high protein or pesticide free product. To a farmer, value added may mean using varieties that are resistant to roundup or resistant to European corn borer (Bt corn), so that he or she have to rely less on pesticides resulting in less production cost.

Value-added products are defined as follows:

A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam)

The production of a product in a manner that enhances its value, as demonstrated through a business plan (such as organically produced products)

The physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that commodity or product (such as an identity preserved marketing system).

Value added agriculture is a production and marketing strategy driven by customer needs and perceptions. It adds features to a raw agricultural, marine, aqua cultural, or forestry material used to make a product. Examples of value added agriculture is food processing, drying, canning, juicing, handcrafting, unique packaging, labeling and marketing. The farmer is not only involved in production of a raw commodity but also takes part in processing, and distribution of the product.

In India, there was a clear ‘disconnect’ between agriculture producers and their ultimate customers, the consuming public. The middlemen harnesses most of the profits in the food chain. As a result farmers only receive about 1-2% return on their investment. If the farmers can come farward in manufacturing and direct marketing, rather than just selling their raw commodities to a local dealership, then they would realize higher returns on their investment.