Value addition refers to the enhancement of the value of the farm produce before the produce leaves the farmer or the area of production. The examples of value addition include solar drying of pineapples, jackfruit, groundnuts and beans and processing groundnuts and simsim into a paste form and packaging it.
It is also possible to add value to the farm produce by including agro-tourism into small-scale farming. The value addition activity is very important to the farmer because it increases the value of the raw materials and enables the farmer to fetch better prices from the market.
Value addition in rural areas can take many forms including cleaning. processing, preservation, sorting, and packaging among others.
Economic Benefit
The economic benefits to the farmers are expected to increase as farmers attain the capacity to add value to their produce and to market their produce further down the supply chain. It is possible for example for organized small scale farmers to sell directly to supermarkets and even export their produce to niche markets abroad. Value addition therefore will also enable the farmer to access better markets that offer better prices.
It also important to note that more than 85% of the Ugandan farm produce is comprised of perishables such as vegetables, fruits and tubers which has made many farmers to yield to the pressure from buyers. The buyers offer low prices because they know the farmers have a fear of their produce rotting on the farm.
The UN Secretary General, Mr. Ban Ki-Moo in a message to Africans on the occasion of the 19th Anniversary Celebration of the Africa Industrialization Day (AID) he prescribed that the processing of raw materials is a solution to African economies in the wake of the global financial crisis because a slowdown in the global economy would hit exporters of primary products hard. The Secretary General noted that primary products accounted for more than 50 percent of the value of Africa’s exports. So he cautioned that this would make the continent especially vulnerable to global economic shocks.
Value addition is therefore a significant rural development strategy if the country has to achieve its economic development goals. The strategy will also enable the local farmers benefit from their effort put in.