Promoting Agricultural Value Chains:
In the OIC Member Countries
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varieties that are not demanded by the market. The use of better crop varieties, both in terms
of production-related characteristics and market-related characteristics, is an urgent challenge
that needs to be addressed; for instance, through facilitating a better and more regulated seed
supply, and incentivising private investments in the seed sector. This has the potential to
contribute to increase value added, particularly by farmers.
Crop varieties suited to local conditions
Context-specificity in terms of the availability of natural and human resources is a critical issue
to consider. For instance, the area suitable for agriculture is limited in many OIC countries,
particularly in the Middle East. Water scarcity is often a key problem. For these reasons many
member countries are shifting towards crops that are suitable for local conditions. Saudi
Arabia, for example, focused on wheat production from the 1970s until the 1990s as the main
staple food. Increasing depletion of groundwater sources forced the Kingdom to change its
policy and date production is now receiving renewed attention, both as a local staple food and
as a cash crop for exports. Farmers who produce crops that need large amounts of water
receive less subsidies, whilst date producers in Saudi Arabia can obtain subsidies per kg of
fruit produced.
Development of processing industries
Agribusinesses in the form of processing and manufacturing industries have significant
potential to increase the value added of agricultural products. This holds both for domestic
value chains as well as for export-oriented chains. Increasing processing activities requires an
active private sector, which, in turn, is associated with the business environment and
investment climate of a country. Private investments need to be stimulated in order to grow
processing industries, for instance, through adequate institutional frameworks, legal stability
and tax incentives. Capacity building in the areas of food science and technology, and
promoting entrepreneurship, for instance through training and business incubators, are
equally important.
6.2.2 Standards
Adopt quality standards and implement quality control
Ensuring quality along supply chains is a critical issue in many OIC countries, as also the case
studies revealed. Due to the informal character of many value chains, quality standards are
absent and incentives for quality improvement are lacking. Even in formal value chains,
maintaining quality is a significant challenge in the light of poor infrastructure (such as cold
chains), high transport costs and a general lack of capacity and knowledge on quality
standards. This represents not only an urgent task for governments to address, but also poses
opportunities for public-private collaborations as private chain actors stand to gain
significantly with higher quality products.
Identify market opportunities for standard compliance
While standards for food safety and quality are often difficult to comply with, considerable
market opportunities exist for those producers who are compliant. Depending on type of
produce and the type of target market, opportunities lie in Halal production / processing
aimed at Muslims around the world. Other opportunities have been identified for organic and
Fairtrade production. For instance, for Saudi Arabian date farmers, organic production seems
to hold considerable opportunities, as a newly developed infrastructure for quality control and