Promoting Agricultural Value Chains:
In the OIC Member Countries
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investments. Small sector levies and taxes may offer potential for longer-term sector-wide
financing of services.
6.2.4 Governance and value chain actors
Developing smallholder agriculture
Small-scale farmers constitute the majority of agricultural producers in the OIC. Given that
they will continue to be the mainstay of agricultural production – irrespective of migration
patterns from rural to urban areas – policy-makers must design strategies that promote their
transition to commercial farming able to cater for growing urban markets, both domestically
and abroad. This entails systematically addressing the main challenges that smallholders face:
lack of knowledge on enhancing productivity and incomes through good agricultural practices;
difficult access to high quality seeds and inputs; noncompliance with food safety, quality and
environmental/social standards; and lack of supporting services, such as extension and
financial services, as a result of institutional voids.
Linking formal and informal value chains for the benefit of both
Agricultural value chains in many OIC Member Countries are composed of informal and formal
elements. As smallholder farmers lack economies of scale and often produce heterogeneous
quality, they are largely excluded from participating in formalised value chains where higher
value added can often be captured. This trend may intensify in the future, as increasing quality
and food safety standards are proliferating in modern agricultural value chains; not only in
high income markets but due to heightened levels of urbanisation also in modern retail outlets
in emerging and developing economies. Increased efforts should thus be undertaken to
integrate more smallholder farmers into formal value chains aimed at modern retail or export
markets. A variety of policy mechanisms are already in place across the OIC, with some
countries having made significant strides in linking smallholder farmers to commercial
agriculture. Given the large diversity of farming systems, markets and agro-ecological
conditions across the OIC, each country will need to find its own path in terms of linking formal
and informal value chains.
6.2.5 Trade
Facilitate trade
Fully exploiting the opportunities offered by regional and international markets is critical for
OIC Members Countries to take advantage of their agricultural potential. However, trade
between OIC countries and the rest of the world is often thwarted by complicated export and
import procedures, high tariff barriers and other non-tariff barriers to trade. Activities that
make it easier to trade across borders include: improving port infrastructure to reduce
shipping time and costs; simplification of trade documents and harmonisation in accordance
with international standards; improving customs efficiency to streamline border controls;
reducing the number of documents for customs clearance; simplifying cargo inspection
processes; reducing the time for handling activities; and improved (online) availability of
information on trade procedures.