Presenter: Rahama Wright, Founder and CEO, Shea Yeleen Health and Beauty
What is the value chain?
Let’s start with a definition. A value chain is the full range of activities that businesses employ to bring a product or service to market. For example, with my business, I work with women at the beginning of the value chain to transform shea seeds to shea butter. It starts with harvesting the fruit, extracting the nuts, removing the seeds, and then a traditional handmade process that the women use to extract the oil from the seeds. Turning seeds to shea butter allows us to link products to foreign markets, and it’s an example of adding value that provides higher income for the women. In short, a value chain is a useful way to understand producing, buying and selling. Every product has a unique value chain, and within the African agriculture sector, opportunities exist to improve and add more value for increased benefit to all stakeholders.
What are the points along the agriculture value chain?
If we consider a value chain like a spectrum, on one end are producers and the opposite are consumers. Between producers and consumers are a variety of intermediaries that can enhance and improve the value chain. These intermediaries can include suppliers, brokers, transporters, wholesalers, manufacturers, packagers, sellers, policymakers and researchers.
Understanding the stakeholders within your value chain is critical to knowing how to best leverage each one or improve upon the value chain. In a successful value chain, each stakeholder at each stage works to support others within the value chain, and at each point there are even more ways to
create entrepreneurship, whether you’re an accountant helping to manage the books, a marketer creating exciting ways to reach customers, a package designer that helps a product appeal to the retailers and customers, or a data analyst tracking email and social media activity to identify trends to help increase product sales. There are a myriad of ways along the value chain that can help create additional value.
But no matter the point in the chain, all stakeholders should commit to satisfying the needs of the customer.
What are the opportunities for skilled professionals in the agricultural value chain?
The development of value-added products that connect to a market creates opportunities for a variety of individuals within a value chain. Completing a value chain analysis is a great method to learn the specific opportunities that you can leverage along your specific value chain.
Here are examples of questions you should consider in your analysis:
Who are the main actors within the value chain?
What are their strengths and their weaknesses within the value chain?
Where is the majority of money being made in the value chain?
Who are the beneficiaries?
Researching these questions can help lay the framework for you to identify the right opportunity to improve the value chain. When I did my value chain analysis for shea butter, I quickly learned that the majority of women within the sector were supplying seeds to brokers for very little income. Since I knew that a development of a value-added product like shea butter could garner more income for the women, I built this goal into my business model. This business model also addresses the quality issues facing many shea butter producers and the marketing and branding required to sell in high-end retail markets.
Common challenges in agriculture value chains include access to research and data, product quality, processing and manufacturing capabilities, product branding and marketing, transport, access to strong commercial partnerships, and identifying customers within a specific market. Addressing all or even some of these value chain challenges is the key for strengthening the value chain and presents opportunities for success.
What opportunities exist for new technologies in the value chain?
Within the African agricultural value chain there is opportunity to increase the development of value-added goods. This requires access to equipment and technologies that can aid in product development and delivery. Some examples of technologies that can enhance the value chain include solar dryers, temperature monitoring delivery systems in cold chains, financial technology or fintech for mobile payments, money transfers, loans, fundraising, and asset management, and blockchain for transparency. Increasing the availability of technologies — both big and small — has the opportunity to enhance value chains, leading to higher productivity and more efficient operations, increased worker safety, and reduced environmental impact that contributes to a more sustainable enterprise.
There are many points along the agricultural value chain for young professionals to make a lasting impact and transform their communities. Finding those entrepreneurial opportunities requires a commitment and passion to operate ethically with your partners and customers, knowledge of the chosen industry, and a willingness to innovate and challenge established norms.
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