Presentation on

Commodity value chain management

Strategies
Backward and Forward linkages
win-win situations for chain actors
Forms of Agribusiness ownership
Agribusiness trends and challenges

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 Introduction
 A value chain is a set of linked activities that work to add value
to a product; it consists of actors and actions that improve a
product while linking commodity producers to processors,
markets and consumers.

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 Value Chain Management Strategies
Vertical Integration
 Farmers concerned with Production
such as land preparation, planting
seeds, applying fertilizers, controlling
pests and weeds and harvesting.

 They may also be involved in other

activities such as procuring inputs,
drying crops, sorting, grading,
processing, transporting and trading.

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 Value Chain Management Strategies
Horizontal Integration
 Farmers may be excluded from
making decisions that concern them
for example contract farming

 They could have a high degree of

control management in terms of
what price to sell to whom, terms
of payment, definition of grades
and standards, target markets and
consumers and innovation e.g
Farmer Associations.
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Enhancing farmer position and integration in the chain
Win-win situations for all chain actors.

In terms of activities In terms of coordination &

 To improve on his current management
segment as chain participant  To participate in decision
 To add more activities and process
move to other chain segments  In setting norms and
 Quality control in terms of standards
grading, certification..etc  Through innovation
 Chain cooperation & mkt
intelligence

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 Inclusive chain development for Win-Win Situation
Integration of post-farm activities

Enhance quality Corporate business

Add value and Product development
Process Branding, marketing.
products
Chain Activity Chain (Co-) Owner
Integrator

Chain Actor Chain Partner

Know more about improving

Farming systems and quality Farmer study groups Specialized
Of product (to have better activity/
Chance at the market and Knowledge & Negotiation skills that
Get better prices) they get to influence chain decisions
Specialization
in farm production

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 Pathways of enhancing farmers’ position in the chain
Integration
of post-farm activities

2 4
no CHAIN CHAIN participation
participation in in chain
Activity integrator (CO-) OWNER managemen
chain
Management t

CHAIN Actor CHAIN Partner

1 3
Specialization
in farm production

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 Backward and Forward Linkages
Backward Linkages
 Refer to linkages from the farm to
the part of the non-farm sector that
provides inputs for agricultural
production, e.g agroinput dealers.

Forward Linkages
 Refer to the part of the non-farm
sector that uses agricultural output
as an input e.g maize to maize mills,
Sorghum to Breweries, cotton to
textiles.

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 Forms of Agribusiness ownership
 Sole Proprietorship: Business  Limited Liability Company
is owned and operated single (LLC): Is a combination of the
handedly. first three structures.

 Partnership:
 Cooperative: Is a business
Exists among
organization owned by a
persons numbering 2-20 who
group of individuals and is
carry on a business together
operated for their mutual
with the aim of making profits. benefit.

 Corporations: Are their own

entities, receive their own
profits and are accountable for
their own liabilities.
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 Agribusiness trends and challenges
 Access to finance remains low
for the vast majority of
smallholder farmers.
 Non-tariff barriers: In Uganda,
some agricultural value chains
are oriented towards exports
 Market access: The existence
of middlemen and agents,
absence of data and
information about other links
in the chain leads to
inefficiencies.
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 Capacity building: Another
major challenge is
improvement in the
production and supply
competencies of the small and
marginal farmers.
 Low public spending on
agriculture
 Inadequate infrastructure
inform of storage facilities,
transport, irrigation
equipment.
 Pests and Disease Control
 Conclusion
Productive and successful business relationships have to create
mutual benefits for all actors in the value chain if they are going to
be successful and sustainable. Inclusive growth in agriculture
means developing agricultural sector policies in a way that
generates broad-based benefits for all agricultural value chain
actors especially small holder farmers.

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 THANK YOU

MWESIGWA FRANKLIN
UIB/ARF/2018/004

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