Promoting Agricultural Value Chains
In the OIC Member Countries
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6. Findings and recommendations
6.1 Findings
In many OIC Member Countries, agriculture is one of the most important economic
activities. The relative importance of the agriculture sector varies between the Member
Countries, and is generally most prominent in countries with lower levels of GDP per capita.
Within the OIC, agriculture’s relative importance is thus highest for the African OIC region and
lowest for the Arab OIC region.
If one considers the broader agricultural value chain, including input supply, processing and
retailing (much of what is classified as services and to a lesser extent as manufacturing) the
importance of agriculture becomes even more pronounced. In this segment of the value chain,
referred to as agribusiness, about 78 percent of agricultural value added is captured (World
Bank, 2013). Global experience suggests that the importance of agribusiness activities
increases with rising GDP per capita.
6.1.1 Institutional framework and public policies
Most OIC Member Countries pursue a policy of achieving self-sufficiency in food
production. Accordingly, the main agricultural products produced in the OIC are staple crops,
such as wheat and rice. This indicates that agricultural value chains are primarily targeted at
meeting domestic food consumption and are overwhelmingly local. Nevertheless, despite this
focus on self-sufficiency, most OIC countries – with few exceptions – are net food importers.
Due to generally low productivity, increasing resource scarcity and weak infrastructure, local
production capacities are not sufficient to meet the demands of the population, although many
OIC countries used to be agricultural net exporters in the past. In 2015, 21 out of 57 OIC
Member Countries are even classified by the FAO as food insecure and are dependent on
external assistance for food supplies.
The food deficiency in many OIC Member Countries points towards a general disregard of
agriculture by policy-makers. Various countries that are rich in other raw materials, such as
oil and gas, have focused on those sectors rather than agriculture in the past. Lack of policy
implementation is also a frequently encountered reason hampering increased and effective
political backing to agricultural value chains in OIC countries. Insufficient support in terms of
research and development and effective extension services has led to overall low access to
agricultural innovation (e.g. high quality seeds), low yields, low human capacities, declining
water resources, decreased soil fertility and increased pressure on land resources. Climate
change, including increased aridity, extreme weather events, and higher proliferation of pest
incidences, threatens to compound these problems and result in declining productivity or
production losses.
The weak support to agriculture also indicates the presence of institutional voids, which is
particularly challenging for smallholder farmers who are not organised or who do not have
access to services through other value chain actors. For instance, many Egyptian small-scale
dairy farmers suffer from the near absence of veterinary, breeding and quality control services
to help them improve productivity and adhere to basic hygienic standards. Not only do these
farmers subsequently sell most of their milk through informal markets, where the value added
is generally lower than in formalised markets, but the widespread consumption of raw milk