Research Reports
A Value Chain Analysis of Major Agricultural Products
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AuthorKim, Yeanjung
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Publication Date2010.10.01
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Original
The value chain in agriculture refers to the process of direct and indirect activities related to the creation of added values in agricultural management. Its main activities include field activities such as purchase of seeds and seed bulbs, cultivation, sorting, packaging, storing, transportation, marketing sales, distribution, and post management. The supporting activities, which include infrastructure building, technological development, marketing, and formulation of government policies, are the tasks for supporting the main activities.
The purpose of this research is to present production improvement suggestions by analyzing the structure of the value chain in the crop categories of rice, cherry tomato, and oyster mushroom using Michael Eugene Porter's theory. This research classifies major activities and support activities at each stage of the value chain and analyzes the actual production cost and product differentiation.
The value chain is an element that creates a competitive advantage. It is not a simple combination of independent factors, but a system of activities that are intrinsically connected with each other. This analysis can lead to a comprehensive plan for innovations in the agro-industrial sector by reflecting cost savings as well as consumers` preferences for the differentiation and competitiveness improvement of agricultural products. It is a key issue that the method finds an efficient, organic relationship in order to create maximum values through mutual coordination and cooperation.
First of all, the production sector has to be improved by reducing the production cost through the development of cultivation technologies and techniques, such as direct rice seeding, and energy-saving cultivation facilities. Also, optimizing the economy of scale at the farmhouse level and stabilizing the rural household income should be achieved by mechanizing the production process and supplying high-quality agricultural produce.
In the sorting, packaging, and processing sector, it is necessary to develop products that reflect consumer needs. To do so, it is necessary to develop new technologies for drying, cleansing, storing, and processing. In addition, development and merchandising of new processed products should take place while searching for ways to create added values through new food products, packages, and designs that can meet consumer needs. For the export sector, specialized export complexes should be fostered to diversify exports and meet the safety requirements of importing countries. In the marketing sector, effective marketing activities should be carried out on a product basis in cooperation with related organizations.
In sum, the value chain analysis promotes a reduction of distribution steps and systematization to maximize the competitiveness potential.
Researchers: Kim, Yean-Jung, Park, Ki-Hwan, Seo, Dae-Seok and Han, Hye-Sung
E-mail address: yjkim@krei.re.kr, kihwan@krei.re.kr, dssuh@krei.re.kr, funny1978@krei.re.kr
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