Promoting Agricultural Value Chains:
In the OIC Member Countries
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However, compared to their potential, the overall integration of OIC Member Countries into
global agricultural value chains is still underdeveloped. Constraints for global agricultural
value chain development are numerous, ranging from natural resource constraints, lack of
technology and challenges associated with smallholder-dominated agriculture, to poor
infrastructure and logistical barriers, and weak institutional environments. A low level of
intra-regional trade between OIC countries also highlights the absence of strong regional
integration and economic development.
Standards
One of the main problems for the promotion of agricultural value chains in OIC countries is the
lack of standards for food safety and quality or low levels of compliance with standards. The
lack of standards starts at the input level (e.g. poor quality seeds and substandard
agrochemicals) and carries on through production (e.g. poor agricultural practices, overuse of
pesticides and inadequate pest management), post-harvest management (e.g. lack of adequate
post-harvest handling), storage and transport (e.g. lack of cold chains and inadequate means of
transportation), processing and manufacturing (e.g. poor hygienic practices).
Particularly smallholder products are often not compliant with quality and food safety
standards, owing to a generally weak institutional environment with little or no support in
terms of extension and credit provision, and a lack of resources and capacities on the part of
producers. The lack of well-defined quality standards and quality control makes it difficult for
smallholder farmers to access formalised value chains. As agricultural produce passes through
numerous middlemen, traders and wholesalers before reaching the final consumer, there are
more chances for it to be exposed to unhygienic conditions, thereby failing to meet even basic
food safety requirements.
Infrastructure and logistics
Many OIC Member Countries have relatively weak infrastructural environments for
agriculture. Problems occur at different levels, including weak research and development,
deficient quality control systems, lack of transport and storage capacities, and inefficient
processing operations.
In particular, infrastructure underlying production, processing and marketing systems is
inefficient and fragmented. Agricultural value chains are highly dependent on a large number
of small operators, ranging from small-scale farmers and individual middlemen and traders, to
small-sized processing units and small wholesalers and retailers. These rely on weak,
inadequate and outdated infrastructure, which increases transaction costs and the overall
costs of production and marketing. Poor access to transport limits value chain inclusion of
dispersed small-scale farmers, leads to high post-harvest losses and limits farmers’ crop
choices. Finally, persistent gaps in infrastructure in many OIC countries raise transportation
costs and put pressure on the margins by the value chain actors involved and reducing the
competitiveness of OIC Member Countries.
Infrastructural development seems particularly important with regard to agro-processing for
increased value capture. Currently, many processing facilities in OIC countries need to be
upgraded to improve efficiency or operate well under capacity due to the lack of sufficient
produce meeting the quality requirements in order to be processed.