Crop Value Addition and Marketing

ToT Training Module Presentation

Agric Technical Working Group Partners
Food Security Cluster South Sudan
7th July 2022
Scope

 Putting value addition into context

 Enterprise identification
 Equipment and machinery
 Management
 Marketing
What is value adding

 Value addition is the process of changing or transforming a product from its

original state to a more valuable state.
 This could be by changing form, colour and other such methods to increase
the shelf life of perishables.
 It refers to changing raw agricultural products into something new often
achieved either through processing, cooling, pasteurization, drying, packaging,
extracting or any other process that changes raw agricultural commodity into
new product.
Why Value Addition

 We add value to agriculture products make farming / enterprise profitable.

 Reduce post havest losses
 Provide better quality, safe and branded for to the consumers
 Value-added agriculture refers most generally to manufacturing process that
increases the value of primary agricultural commodities.
 Reduction of import and meeting export demands
 For inceeased foreighn exchange
 Diversity economic base of of rural communities
 Labour saving and to make more money
 To find a better market
 To increase the value of their produce and hence a better price.
To preserve food
Reasons we preserving food:
 To extend shelf life (seasonality and perishability of most primary food products)
 To become more Self Sufficient
 Reduce waste
 Convenience
 To retain nutritional value
 To improve flavour of food
 To reduce food waste
 To produce gifts for friends and family
 To start a business
 To preserve food
Value Addition: Moringa Products
Examples of small processing machines
Shea Butter Ground nut paste/ butter/oil
Animal products

Yoghurt Cheese
Enterprise identification

Crop Value Addition and Marketing

What is an Enterprise?

 Enterprise means to plan a business, to start it and run it. It means to bring the
factors of production together, assign each its proper task, and pay them
remuneration when the work is done.
 An enterprise is a ventur. It is about taking risk with the intention to make profit
 Business refers to transactions between individuals, groups, or firms, in which goods
and services are exchanged for money, or for other goods and services.
 Depending on scale, a business could be micro enterprises, medium scale, large scale
 Depending on purpose it could also social enterprises or one with triple bottom
 People who initiate, start and undertake businesses are often called entreprenuers
[Discussion: What are the factors of production?
Would we then be right to say a small holder farmers / small scale farmer is an enterprenuer. How do we bring
them together and make them work profitable?]
Who is an entrepreneur
 An entrepreneur is an innovators or developer who recognizes opportunities and
act to make those opportunities into to workable and marketable ideas.
 An entrepreneur organizes, manages and assumes the risk of a business.
 The entrepreneurs take the risk of the competitive marketplace to implement these
ideas.
 The entrepreneur adds value through time, effort, money, or skills, and realizes the
reward from these efforts.
 He/she is an independent thinker who undertake activities that are different from
other businesses,
 He/she seeks to offer something no one else efforts in order to attract customers.
Could also be packaging a common idea into a new form.
[Farming is a business and should be a business or shouldn’t it be]
The 4 factors of production are land, labour, capital, and entrepreneurship
 An entrepreneur is someone who produces for the market.
 An entrepreneur is a determined and creative leader, always looking for
opportunities to improve and expand his business.
 An entrepreneur likes to take calculated risks, and assumes responsibility for
both profits and losses.
 An entrepreneur is passionate about growing his business and is constantly
looking for new opportunities.
 Entrepreneurs are also innovators.
The business cycle

The four stages in micro-enterprise development are:

 Opportunity scanning
 Business planning (production. marketing . finance . organization )
 Implementation ( production . marketing . finance . organization )
 Evaluation ( Decision making “to start or not to start”)
a. to open a new business
b. to continue with the existing business
c. to cease to operate the existing business
Characteristics of a micro-enterprise

 Small level of capitalization;

 Initiated and managed by a household or few individuals;
 Self employment (owner is manager and worker);
 Simple technology and equipment;
 Utilization of local resources/raw materials;
 Transactions are often informal (no written agreement, based on personal
contacts); and
 Ease of entry –may not be registered or formalized
Starting a business: Key steps and considerations
 Decide which farm enterprise one wants to set up and what needs are there
to meet. What services is needed and where. Begins with collecting
information about the units/farms/entities already working in that field of
interest.
 Organize the information collected in an orderly and systematic manner to
derive the meanings from them. Analyse them. Make a decision on which best
meet the most need and customers will be willing to pay for.
 Build your skill. Learn more about the business and how to make it work.
Learn as much as you can “ take the plunge”. An enterprise is about taking
calculated risk.
 Estimate the financial requirements for setting up the small business
enterprise. Think about the source (s) of capital and choose which is best for
you. Remember you do not have to take a huge debt to start an enterprise.
Produce a business plan as a guide.
 Assess the market. Do a market research. Ask Questions related to the
business. Analyze responses. Remember production has no value or meaning
if it is not sold /marketed.
 Be prepared to manage crisis situations. There will be turbulent times, be
prepared. Not all risks or turbulent situations may be bad for your business.
Look for opportunities in the situation. Record everything you learn.
 The characteristics of an entrepreneur –
discussion and presentation
 Confidence: confidence is their own skills and knowledge makes them more comfortably and convince
other people to buy their products or invest in their business
 Innovative and creative: always want to try something new, try to find out solution for problems, try
come to come with new products. Spirit of adventure. Don’t join the band wagon. Seeks to stand out.
 Result Oriented: capable of setting goals and target with inbuilt pleasure of achievement
 Risk taking: not afraid of taking risk, However entrepreneur do not take unnecessary risk. They think
about the level of risk they want and needed to take to succeed
 Committed and passionate: has the willing to put the business before everything else and to achieve
the goals.You love doing your business.
 Hard working and energetic: Be strong. Be determined and keeps the passion. Keep your eyes on
the prize. Review and keep adjusting. The glory day and moment will arrive.
 Skills and knowledge: Technical skills – has the practical knowledge needed to produce the product
or provide the services for the business.
 Business management skills – the ability to run your business effectively
 Knowledge of your line of business – know who your buyers are, what they want, know who your
competitors are and what they offer. The more you know about your line of business, the better
 An entrepreneur is someone who produces for the market. An entrepreneur
is a determined and creative leader, always looking for opportunities to
improve and expand his business.
 An entrepreneur likes to take calculated risks, and assumes responsibility for
both profits and losses.
 An entrepreneur is passionate about growing his business and is constantly
looking for new opportunities.
 Entrepreneurs are also innovators.
Equipment and machinery

Crop Value Addition and Marketing

Why equipment and machinery

The purpose of introducing equipment and machines is

 to increase productivity
 For more efficient use of labour,
 ensure timeliness of operations,
 Mechanized machines are commonly used for postharvest operations such as
threshing, dehulling and milling operations. Drying, pressing
 For root crops post harvest operations include chipping, grating and pressing.
 Many a times, farmers associate value addition to a very complicated process
that require complicated machines, yet it may be as simple as proper drying,
sorting, grading and packaging.
Machinery/Mechanization / Machines are designed to make things to make things
easier for people
In most post-production operations, we use machines in
 drying
 shelling,
 milling,
 packaging,
 transportation,
 storage and
 marketing.
Operating a machine
There are different types of machines
 Manually
 Diesel or petrol engines operated (Including PTO shaft)
 Electric motors to run them depending on the scale of operation and availability of
those power sources.
 Natural energy sources (solar, wind and water)
 Hybrid
 Coal fired (traditional bakeries)
They could be small, medium or large and could
be manually or machine operated.
The choice of a machine to buy and deplore of depends on production threshold
Corn flour milling process
Addressing Barriers through machinery &
Opportunities

 Transport such as oxen carts,

 trailers attached to four wheelers or single axle tractors, trucks etc. Capacity
building in terms of training on how to fabricate transportation equipment
such as carts and the proper use of oxcarts and other transportation n
equipment is important.
 Hiring Services (Mobile grinders/ combine harvestors etc)
 Repair and maintenance
 Manufacturing and fabrication
 Management

Crop Value Addition and Marketing

What is management

 Management involves giving direction and making decisions, formulating

policies and plans, implementing the formulated policies and plans, and
monitoring them.
 Management also involves maintaining interpersonal relationships with
subordinates, peers, other sectors, departments, organisations and superiors.
 Enterprise management is the way of conducting and controlling the business,
process, information and IT capabilities, system and service offerings,
resources and activities of the enterprise.
 Enterprise management work products include enterprise management ideas,
requirements, plans, risks, opportunities, reviews, decisions and action items.
Roles of enterprise managers
 Production: Use of factors of production (land  Ability to Plan: ability to plan is a key skill
Land, labour, capital, entrepreneurship to  Communication Skills: Entrepreneurs
produce goods and services needed should be able to explain, discuss, sell and
 Marketing: Ensures that good and services are market their good or service.
delivered to the right customers through  Marketing Skills: Good marketing skills that
research promotion and advertisement ensure that people want to buy your goods and
 Finance: Keep records of all financial activities services
and raises necessary capital  Interpersonal Skills: constantly interact with
 General Management: Plan, Organise, Direct people
and Control all activities that will make the  Basic Management Skills:
business succeed
 Personal Effectiveness: manage time well and
 Personnel: Proper management of people to take care of personal business efficiently
including recruitment, training, evaluation and
payment  Team Building Skills:
 Purchases: Goods and services are purchased  Leadership Skills: ability to develop a vision
at the best price and are available when needed for the company and to inspire the company
employees to pursue that vision as a team
 Administration: Handling information and
ensuring compliance to policies
Farm/Agric management enterprise considerations

 Need to understand the market demands in terms of type of crops, quantities, Soil type and
crop types suitable for the soil.
 Climatic conditions will also determine the type of crops that can be grown in the area.
 Consider also the maturity period of the crop e.g. short or long season varieties.
 The capital for farming this includes labour cost, input cost (seed and tools), transport cost.
 During this stage it is important to understand the market value chain actors (wholesale,
retail), since it can determine the customers for the produce.
 The farmer can sell to the wholesaler in bulk who will avail transport to the market.
 To sell at a profit, marketing needs to begin even before planting.
 Farmers need to offer products that customers want to buying the right form (fresh, dried,
processed …),at the right time of year, in the right quantities, at the quality and packaging
required in the right place, at a price that customers are willing to pay.
To succeed as a farm enterprise manager

KNOW YOUR TRADE AND AS AN ENTERPRISE KNOW YOUR FOCUS KNOW YOUR PRODUCTS KNOW YOUR CLIENTS
PLAN KNOW WHAT YOU AND CUSTOMERS
WANT!

KNOW YOUR KNOW YOUR HEDGE KNOW THE ROUTE AND

COMPETITORS OVER SIMILAR PRODUCTS COME UP WITH THE
(WHAT MAKES YOU RIGHT BUMPER STICKERS
DIFFERENT)
 Marketing

Crop Value Addition and Marketing

What is marketing
 Basically, a market can be defined as a physical place or a platform where
buying and selling of goods and services take place. The exchange of goods and
services may be physical or could through e-marketing, e-commerce or tele-
marketing.
 Marketing is a series of activities involved in moving a product or service from
the point of production to the point of consumption. It involves finding out
what your customers want and supplying it to them at a profit.
 Marketing is about finding out what consumers need and then making a profit
by satisfying those needs.
 It includes all the activities and services involved in moving an agricultural
product from the farm to where it is sold to a consumer. This is the value
chain that links farmers with consumers.
 And many people actors provide services that make the value chain work
smoothly.
 The activities we commonly associate with marketing include cleaning, drying,
sorting, grading and storage, as well as things like transport, processing,
packaging, advertising, finding buyers and selling the product.
 There are different types of markets available for agricultural produce:
 On farm
 Barter market
 Assembly market: These are markets where farmers and small local traders
come together regularly to sell their goods to larger traders and consumers.
They are good place for farmers to sell either as individuals or collectively
such as in farmer cooperatives.
 Wholesale market
 Retail markets
 Supermarkets
 Auctions
Concept and Definition
 The value chain is the value addition at different stages of transfer. In different
stages of value chain, different stakeholders add value to the product to
increase the end product value
 Value chains comprise the full range of activities required to bring a product
or service from conception, through the different phases of production
(involving a combination of physical transformation, inputs by various service
providers, delivery to the final consumer, and final disposal after use (Kaplinsky
and Morris 2002)

What is the difference between value addition and value

chain.
Cassava: Value Addition

7. Packing & Storing

Production Processing Marketing
6. Quality Control

5. Frying
Trading/
4. Fermentation Retailing

3. De-watering
Trading/
2. Grating Wholesale

1. Hauling & cleaning

Who are the economic players?

 Primary producers
 Small scale processors
 Large scale processors
 Traders (retailers/wholesalers)
 Intermediate traders
 The markets (export, niche, domestic/local markets, institutional costumers
 “And the enabling environment”
Organization directly involved in value adding chain

 Consumers – by the product and bring income to the other actor in the chain.
Sometime customers buy the product at the restaurants. In the case restaurants
are also part of the chain.
 Retailer – the market woman and shop keepers who sell the final product to the
consumers
 Transporters – truck driver who transport the product from the area of
production to the market. Usually they are paid by trades and do not come into
possession of the product, they deliver a service.
 Traders – bulking, organization that the product goes from the producers to the
markets
 Processors - process the raw ingredients into products that consumers want.
Sometimes they buy the raw product and sell the finished the product. Sometime
they process for other people as services.
 Producers – famers who produce the product in their farm
Enabling Environment in the Market

 Tax & Tariff Regime  Consumer Trends

 Trade Standards  Q.A. Institutions
 Finance Policy  Land Registries
 Contract Enforcement
 Business Regulation
Disenabling factors
Official Corruption
Multiple taxations
Lack of credit access
Technology and skill availability
Marketing and sales strategy principles
The principle “anything sells” that was once popular among
producers including farmers no longer works.

“Meet demand and it will sell”

 It mainly consists of looking at client demand on an ongoing
basis and adjusting services accordingly.
 Not easy to implement and can initially be quite expensive
“Make it well and it will sell”
“Promote it well and it will sell”

Creating a marketing strategy begins with a clear vision and mission, is followed by an
intensive period of market analysis and completed with the setting of marketing
priorities. A marketing strategy itself provides a clear view on product packages, pricing,
marketing processes, promotional activities and delivery channels.
Farmers need the market strategy for the purpose of better decision making
while planning to grow a particular crop for market.
Below are the key components of a sound market strategy
 Product specification such as varieties, colour, size, grade, quality and packaging
 Prices, price pattern, variation according to seasons quality and supply
 Supply, volume, competing suppliers, seasonality
 Preference of consumers
 Opportunity for additional production to be marketed
The Competitor Environment The Market Environment

 Competitor analysis seeks to identify weaknesses  The market environment represents external forces
and strengths that company's competitors may have, which surround an organisation and have an impact
and then use that information to improve efforts upon it, especially its ability to build and maintain
within the company. successful relationships with target customers, e.g.
 An enterprise may therefore want to know: economic conditions, legal issues.
 Who the competitors are (including informal  PEST analysis tool
competition such as moneylenders);
 What products and services they are offering;
 How their products compare (features and quality)
to products offered by your enterprise ;
 What are the competitors’ prices (interest rates and
fees);
 How do they sell;
 How does that affect your MFI’s customers and
businesses.
Client Research Product design and communication
 Thorough knowledge about the client is a
prerequisite to successful product marketing.  Client research allows the enterprise to:
 Design competitive products with features that meet
Relevant questions that must be answered are: customer demand;
 What specific groups of potential customers  Make the enterprise and its products identifiable
(markets) exist in your area, and neighbouring areas; (branding);
 Which specific needs do customers have and how do  Develop advertising and promotional events focused
their needs differ from one customer group to on products and services;
another;  Select or design appropriate sales channels and
 What products might be designed to meet these strategies;
needs;  Develop public and media relations focused on the
 How many potential customers exist for each entire organisation;
product;  Implement customer service and customer
 How much are the customers willing to pay for your relationship management tools.
products;  Marketing has great impact on the product
 Where and how do the customers prefer to have development life cycle that consists of five steps in
the product delivered. the following value chain:
Factors limiting marketing Vs opportunities

Problems Opportunities
 Cartels  Limited/ Few functional farmers’ groups or
 Middlemen cooperatives
 Hoarding of goods  Postharvest handling and bulking experiences
 Multiple taxation  Limited value addition and competitors
 Poor infrastructure  Market linkages and available market for major
farm products
 Low prices
 Rich and unexploited arable lands with high
 Poor road connections to markets production potentials
 Insecurity/ conflict  Existing Government and marketing policies
 Limited market information  Growing market networks and creativity
 Low levels of Literacy  Existing main roads and programs towards
 Poor access to credit and loaning facilities making more feeder roads to remote areas
 High agricultural taxes connecting rural to urban markets
 These are the key players in access to market. They main role is link up the
farmer to the consumer of their final produce. The chain varies with different
contexts but the most common one is as below.

Farmer Farmers groups /Coops Collection Centre Market Traders

Wholesaler/Retailers Consumer
Guide on agricultural marketing and markets in South Sudan