Promoting Agricultural Value Chains:
In the OIC Member Countries
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with high rates of bacterial contamination also poses a considerable health risk to consumers –
turning an agricultural challenge into a concern for national health.
In recent years, however, increased attention to the development of export-oriented
value chains to realise the economic potential of agriculture as a contributor to revenues and
employment can be observed across OIC countries. Countries such as Indonesia, Malaysia,
Pakistan and Cote d’Ivoire have long been global players in the production and export of
specific agricultural commodities, such as palm oil, cotton and cocoa, respectively. In Malaysia,
for instance, palm oil production has enjoyed considerable governmental support since the
1960s and is nowadays one out of 12 National Key Economic Areas.
Several recent best practices also exist, and a number of OIC Member Countries have managed
to position themselves competitively in global value chains, such as different African,
Mediterranean and Arab countries in high value horticulture chains destined at EU
supermarket outlets. Other high value agricultural products include dairy and meat products,
for which significant growth and export potential exist if sector development were promoted
and supported by the government. The dairy and red meat sectors in Egypt and Turkey,
respectively, seem to be cases in point – both are still largely focused on domestic consumption
but with continued modernization export markets may be explored.
6.1.2 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). This is a
recurring theme across the cases analysed due to the informal character of many value chains
in OIC countries.
In Saudi Arabia, for instance, the high incidence of pests and diseases, and high levels of
bacterial contamination of dates is a direct consequence of generally poor quality control and
quality standards, despite an otherwise enabling institutional environment for date
production. Yet, in the predominant informal date value chain, few incentives exist for farmers
to adhere to quality standards. Price premiums would be the main market mechanism to
promote compliance with standards, but informal value chains are often characterised by a
lack of differentiation and specialisation of production where standards are not important.
Similarly, groundnut production in the Gambia suffers from the absence of quality standards
and control, which results in high levels of aflatoxin measured in groundnuts. This hinders
attempts to export groundnuts, despite the preferential duty rates offered to the Gambia as a
least developed country, as importing countries have much stricter standards with regard to
aflatoxin and either reject groundnuts from the Gambia or demand heavy price discounts.
Lack of (adherence to) standards also poses challenges for the processing sector, as the cases
of red meat from Turkey, milk from Egypt, and cotton from Pakistan illustrate. In Pakistan, for
instance, the lack of rigour along the value chain leads to domestic production being
dominated by medium staple (i.e. lower quality) cotton. As the Pakistani textile and garment
industry requires long staple cotton to produce high quality fabrics for exports, cotton imports