How to add value to agricultural products

increase farm income, interest in “add-ing value” to raw agricultural products has grown tremendously. The value of farm products can be increased in endless ways: by cleaning and cooling, packaging, process-ing, distributing, cooking, combining, churn-ing, culturing, grinding, hulling, extracting, drying, smoking, handcrafting, spinning,

The value of farm products can be increased in endless ways: by cleaning and cooling, packaging, process- ing, distributing, cooking, combining, churn- ing, culturing, grinding, hulling, extracting, drying, smoking, handcrafting, spinning, weaving, labeling, or packaging.

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Answer

How can farmers add value to raw agricultural products?

Many farmers want to increase profitability and adding value to raw agricultural products in one way to accomplish that goal. To achieve this however, farmers need to think in new and different ways and break away from focusing all of their efforts on production. There are two ways to add value: by capturing value or creating value.

What is the importance of value addition in agriculture?

Value addition coupled with marketing has thus the potentials of solving the basic problems of agricultural surplus or wastage and providing rural jobs, ensuring better prices to the growers, etc. What is value addition?

How do you add value to your products?

Those interested in adding value to their products have many choices. The USDA’s definition of value-added includes four components. The first three include differentiating your product. This can be done by producing the product differently.

How do producers benefit from value added projects past the farm gate?

Producers who invest in value-added projects past the farm gate cause the market to become more vertically integrated. A totally integrated system can provide consistent quality from the field to the shelf, eliminating middlemen and even saving money for consumers.


How can you add value to a product?

How to add value to a product?Add new product features that improve user experience.Improve product packaging and design.Improve customer onboarding.Continue to innovate.Refine after-sales service.Increase speed of product delivery.Offer expert advice.


How can value be added to primary products?

“Value added” means adding value to a raw product by taking it to at least the next stage of production. This can be as simple as retaining ownership of your calves and wintering them on wheat pasture or placing them in a feedlot.


How is value added agriculture explained?

Value-added agriculture generally focuses on production or manufacturing processes, marketing or services that increase the value of primary agricultural commodities, perhaps by increasing appeal to the consumer and the consumer’s willingness to pay a premium over similar but undifferentiated products.


What are examples of value-added products?

Value added products are raw agricultural products that have been modified or enhanced to have a higher market value and/or a longer shelf life. Some examples include fruits made into pies or jams, meats made into jerky, and tomatoes and peppers made into salsa.


What is value adding of agricultural commodities?

Value-added agriculture entails changing a raw agricultural product into something new through packaging, processing, cooling, drying, extracting or any other type of process that differentiates the product from the original raw commodity.


How can you add value to raw materials?

Added value is the difference between the cost of acquiring the raw materials and finished goods.Value added = Sales Revenue – cost of Raw materials.For example, if I am selling wooden chair. … Creating a brand: Brands represent quality and sometimes status.More items…


How is value addition done?

Value-added is effectively the difference between a product’s price to consumers and the cost of producing it. Value can be added in several different ways, such as adding a brand name to a generic product or assembling a product in an innovative way.


What are the types of value addition in agriculture?

Small-scale, organic food processing, non-traditional crop production, agri-tourism, and bio-fuels development are examples of various value-added projects that have also created new jobs in some rural places.


Why value addition is needed in agriculture?

Value addition in agriculture is needed for the profitability of the farmers, to empower the farmers and weaker sections of the society, to provide safe, quality and branded food to the consumers, to reduce post-harvest losses, reduction in import and increasing exports, encourage the growth of subsidiary industries, …


How can value be added to crops?

There are four major ways that value is added to crops along the value chain: product transformation, distribution, storage, and added service.


How can you add value to fruits and vegetables?

“The value of farm products can be increased by cleaning, cooling, cooking, combining, churning, culturing, grinding, extracting, drying, handcrafting, packaging and distributing, as well as by adding information, education or entertainment,” says Janice McGregor, a business commercialization coach with Alberta …


What are three ways in which value can be added to products?

10 Ways That You Can Add Value To Your Product Or ServiceProviding expert advice and a tremendously high level of professionalism. … Bundling and packaging. … Service levels. … Frequent buyer programs. … Transition and education. … Recognition and reward levels. … Qualitative preference. … Dedicated personnel.More items…•


How do farmers add value?

There are two ways to add value: by capturing value or creating value. Capturing value relates to capturing some of the value that is added to a product by processing or marketing.


What is value added agriculture?

Creating value added products and businesses can increase the bottom line for farmers. The term “value-added agriculture” gets tossed around a lot, but what does it really mean? Many farmers want to increase profitability and adding value to raw agricultural products in one way to accomplish that goal. To achieve this however, farmers need …


What is creating value?

Creating value is another strategy that involves developing products that are differentiated in some way. The product difference may be real or perceived. The key to success is that the consumer feels there is added value to the product and is will pay for it.


What is the value of capturing value?

Capturing value relates to capturing some of the value that is added to a product by processing or marketing. The farmer’s share of every dollar that consumers pay for food has been shrinking over the years. It was about $.33 per $1 in the 1970s and in recent years has dropped to about $.16 per $1. The farmer continues to get less and the rest goes to processing, distribution and marketing. These figures sound discouraging but clearly illustrate the potential opportunity to attain more value.


What is value added agriculture?

How is Value-added Agriculture Explained? In general, adding value is the process of changing or transforming a product from its original state to a more valuable state. Many raw commodities have intrinsic value in their original state. For example, field corn grown, harvested and stored on a farm and then fed to livestock on that farm has value.


What is value added?

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) …


What are some examples of alternative crops?

Some alternative crops that show promise include industrial hemp for its fiber, kenaf for fiber, and castor bean for its oil.


What is the role of producers in adding value?

Producers involved in adding value should think of themselves as members of a food company that processes and markets products to consumers. Often, this involves building processing plants in the producers’ geographical regions to process locally produced crops or animals.


Why is value added research important?

Because value-added research is important, producers might examine competitive advantages obtainable with processed products compared to raw commodities. 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.


What is value added in biotechnology?

A broad definition of value added is to economically add value to a product by changing its current place, …


What is value added 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.


What is value added agriculture?

Value-added agriculture generally focuses on production or manufacturing processes, marketing or services that increase the value of primary agricultural commodities, perhaps by increasing appeal to the consumer and the consumer’s willingness to pay a premium over similar but undifferentiated products.


How many ways do farmers add value?

Generally there are five ways farmers have of Adding Value . For a more specific definition, we define value-added agriculture using USDA Definition. However, to be successful in this movement we must look further into this concept of adding value. For example, there is a difference between Capturing Value and Creating Value .


What is VAPG in agriculture?

One of the foremost vehicles for value-added agricultural development is the Value-added Producer Grant Program (VAPG). The VAPG was created by the Agricultural Risk protection Act of 2000 and coalesced into the legislation enacted in the 2002 Farm Bill (P.L. 107-171, Sec. 6401). With the Agricultural Act of 2014, …


What is the Farm Bill?

The Agricultural Act of 2014 (the current Farm Bill) funds farm programs through 2018. This omnibus bill is the primary agriculture-policy tool of the federal government and sets out much of the policy and spending priorities for the United States Department of Agriculture. Since they began in 1933, farm bills have charted direction …


What is value added in agriculture?

The USDA’s definition of value-added includes four components. The first three include differentiating your product. This can be done by producing the product differently. Organic, grassfed, or locally produced are all ways of differentiating products according to the production method.


Why is value added agriculture important?

The key to success in value-added agriculture is developing a unique product that is demanded by consumers. Because many consumers increasingly have less time for preparing meals at home, many demand food products that are at least somewhat processed.


Why is the farmer’s share of the consumer food dollar smaller than it used to be?

These products are often branded and eventually sold to consumers as differentiated products. The fact that others are adding value to commodities is one reason why the farmer’s share of the consumer food dollar is smaller than it used to be. In 1950, the farmer received over 40 percent of the consumer’s food dollar.


How much did farmers spend on food in 1950?

In 1950, the farmer received over 40 percent of the consumer’s food dollar. That figure has hovered around 20 percent through the beginning of this century. Over that half-century, though, consumer food expenses have increased dramatically. In 2004, US consumers spent nearly $800 billion on food.


What is the largest component of American agriculture?

The largest component of American agriculture was, and is, focused on the production of commodities which are sold from the farm to be processed somewhere else before arriving on our dinner plates . A commodity is something that is perceived as being consistent in all characteristics. Many view milk, for example, …


Is the percentage of commodity farmers smaller than it once was?

So, while the percentage is smaller than it once was, both are big numbers. To increase profitability, commodity farmers must operate at very low per unit costs. Their income per unit of output is essentially the same as that received by others producing the same commodity.


What is value added agriculture?

Value-added agriculture may also refer to increasing the economic value of a commodity through particular production process, eg., organic produce, or through regionally branded products that increase consumer appeal and willingness to pay a premium over similar but differentiated products.


How does value addition help agriculture?

Besides making agriculture competitive, value addition also helps in avoidance of post harvest losses, industrialization, employment generation, export, extended availability of produce, foreign exchange earnings and product diversification, easy marketing etc. It is therefore, appropriate time for us to come out of primary processing and bulk exporting of pulps and get into newer product development and marketing of ready to consume product through value addition.


Why is value addition important?

Article Summary: Value addition is one of important components of nutritional security. Sometimes surplus production is the cause of lower price of produce in market. One way to solve the problem is crop diversification which is responsible for a viable market system, creates opportunity to earn more as well as strong step toward nutritional …


How to solve the problem of nutritional security?

One way to solve the problem is crop diversification which is responsible for a viable market system, creates opportunity to earn more as well as strong step toward nutritional security. Other step is value addition of agricultural produce. Crop diversification and value-addition are the two important pillars of nutritional security as well as two …


Why are horticultural crops good for value addition?

Horticultural crops are right material for value addition because they are more profitable, has high degree of process ability and richness in health promoting compounds and higher potential for export.


What percentage of India’s produce is processed?

India as second largest producer of fruits and vegetables, only 10 per cent of that horticultural produce is processed, but other developed and developing countries where 40-80 per cent produce is value added.


What is value addition of agricultural produce?

Value Addition of Agricultural Produce: An Evergreen Technology for Profit Making. Authors: Rajendra Jangid, Mahendra and Manoj. Agriculture forms the backbone of Indian economy and even though there has been large industrialization in last 60 years, agriculture still occupies a place of importance. Agriculture has abled to provide us more …


What Is “Value Added?”

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“Value added” means adding value to a raw product by taking it to at least the next stage of production. This can be as simple as retaining ownership of your calves and wintering them on wheat pasture or placing them in a feedlot. Value can be added through membership in a cooperative that processes your products, such …

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What Is Customer Value?

  • “Customer value” reflects the relationship between the benefits customers receive from and the price they pay for a product. The more benefits relative to the price, the higher the customer value. This does not necessarily mean that greater value results from a low price. The price of a particular product may be high, but if the associated benefits are high as well, the customers per…

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What Creates Added Value?

  • “Value” is usually created by focusing on the benefits associated with the agribusiness product or service that arise from: Quality— Does the product or service meet or exceed customer expectations? Functionality— Does the product or service provide the function needed of it? Form — Is the product in a useful form? Place— Is the product in the right place? Time— Is the produc…

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What’s Driving “Value Added”?

  • Agribusiness, particularly the food sector, is rapidly consolidating and increasingly responding to the changing tastes and preferences of consumers. Consumers have higher incomes than ever before. They are focusing more on convenience, quality, variety, service, health and social consciousness. They are also faced with the increasing value of (and demands on) their time. I…

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Creating A Value-Added Product

  • To take advantage of opportunities in this area, one must know and understand customers. What consumer segments might want your product? What are the benefits desired by these potential customers? What criteria are they looking for when purchasing? Writing these down as part of a business plan is an important first step in beginning a value-added business. Any business enter…

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Steps to Success in A Value-Added Business

  • Building a new business is difficult and takes hard work (nothing new for farmers and ranchers). But, for all the uncertainty, there are ways to craft a successful value-added business strategy. The key factors in a detailed business plan are: Operations plan — flow of the business, quality and cost control Personnel plan — needs, skills and training Sales plan— including challenging b…

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Summary

  • Beyond business planning and market research to get to know the customer, the essential elements for success in a value-added business can be boiled down to four key ingredients for business managers: 1. Adapt to market changes. 2. Be open to exploring new ideas. 3. Operate more as a resource manager than as a producer. 4. Realize the importance of networking and th…

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Internet Resources For The Entrepreneur

  • Opportunities for Adding Value to Your Products ag.arizona.edu/arec/pubs/dmkt/dmkt.html Horticultural Alternatives for Texas Agriculture aggie-horticulture.tamu.edu/alternatives Resource List for Marketing Alternative Crops www.ianr.unl.edu/pubs/horticulture/nf107.htm Potential Value-added Food Products Groups: Marketing and Production Opportunities for High-end Cons…

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