Transcript for:
Understanding Agricultural Value Chain Dynamics

An agricultural value chain is a system of people that work in various stages in crop production. The value chain contains every person that works to get the crops from the farm where they were planted, to the consumer that will end up eating them. This animation explains the importance of each individual's actions in a value chain. The first example we are going to see is how a negative influence can affect an entire value chain. This is a Farmer. We will observe how he grows his maize crop. The Farmer uses seeds of poor quality. When insects attack the crop he treats it with a cheap pesticide, which is not adapted for this crop and very toxic. When the crop is harvested, he does not dry, clean and store it properly, and puts it into dirty bags. He even adds some small stones in one bag to make it heavier. A Trader offers the Farmer a price for his maize. The Farmer refuses and wants a higher price, even though the Trader explains the maize is of low quality and he cannot pay more money. The farmer is upset and rude with the Trader. The Farmer decides to go to the town to sell his maize. The Traders refuse to buy the Farmer's maize as well due to the Farmer's high asking price and the maize's low quality. The Farmer becomes worried that he will not sell his maize. Finally, a Trader accepts to buy it, but at a cheap price. The Farmer is forced to sell to him. This Trader goes to a Miller and shows him the maize. The Miller does not like the maize quality and he offers a low price. The Trader does not make any profit. The Miller cannot process the maize due to impurities. He has to clean it and dry it before he can process it. The Miller goes to the market and nobody wants to buy his bad quality maize flour. Finally, a Woman bargains a low price and takes some flour home. The Woman cooks maize paste for her family. They do not like the taste; the dish contains sand grains, and one of the children gets sick. Neither the Farmer, the Trader, the Miller, nor the Woman is happy. There is no trust between the individuals in the value chain, which leaves everyone with bad products and little money. How can this situation be improved? This second example will show how a positive influence can affect an entire value chain. Let's have a look at a second Farmer's way to grow maize. This Farmer buys good quality seeds. He chooses the treatment adapted for maize and sprays his crop using the correct technique. He harvests a lot of maize, uses clean bags and dries it well on a clean surface. His wife winnows the maize and no contaminants are in the bags. He stores it properly. When the Trader arrives to buy this Farmer's maize, the Farmer is friendly. The Farmer looks for information about the market situation by checking prices with other Traders. He also asks other Farmers if they want to sell with him. The Farmer then sells his maize for a good price with other Farmers. The Trader easily sells the maize to the Miller for a good price, as the maize is good quality. The Miller grinds the maize and is happy with the quality and the quantity. When he takes the flour to the market, he sells flour to many women for a good price. A Woman cooks the maize flour for her family. Her family thanks her for the good food. In this situation, everybody in the value chain is happy. This is possible, first, when good practices are used for production, transport, stocking and processing. Secondly, a value chain is successful when Farmers, Traders and Millers work together to build trust and adapt to the demand of the market. Lastly, it is important that Farmers, Traders, and Millers are well informed on the market situation. To learn more about this, please watch our animation titled Supply and Demand: Affecting Prices in Agricultural Markets.