Promoting Agricultural Value Chains:
In the OIC Member Countries
4
In 2013, 54 percent of the total exports of OIC Member Countries went to high-income
countries, 28 percent went to developing countries outside the region and 18 percent went to
developing countries within the region. This picture is similar when looking at the total
imports of OIC countries. Again, about half (51 percent) of the imports come from high-income
countries, 34 percent from developing countries outside the region and 15 percent from
developing countries inside the region. In the trade of meat and live animals, imports from
non-OIC countries even constitute as much as 85 percent of total imports.
Given the weak infrastructural environment, trade costs in OIC countries are higher than in
developed and other developing countries. Trade costs among OIC Member Countries are
lower than trade costs between OIC and other developing countries, but significantly higher
than trade costs between OIC and developed countries. There is a clear political drive towards
increased intra-OIC trade among the 57 Member Countries which has risen from 15 percent in
2005 to 18.6 percent in 2013, and is set to rise to 20 percent by 2015 according to OIC’s Ten-
Year Programme of Action. Agricultural products constitute 3.2 percent of total intra-OIC
trade.
Recommendations
1. Increased political commitment and public policies
Agricultural value chains offer significant opportunities for value creation. Political
commitment and designated strategies are therefore critical to promote key value chains, i.e.
value chains where individual countries have a comparative competitive advantage, be it in
production, processing or distribution.
2. Improving agricultural output and sustainability
Many OIC Member Countries are confronted with the need to feed a growing population on the
one hand and decreasing availability of agricultural resources, such as arable land and water,
on the other. Increasing agricultural output without putting too much pressure on the
environment is thus critical.
3. Better crop varieties with more value added
Many producers in the OIC countries struggle with low productivity and low quality
production due to the continued use of substandard crop varieties, which calls for the
promotion of better crop varieties, both in terms of production-related characteristics and
market-related characteristics.
4. Crop varieties suited to local conditions
Context-specificity in terms of the availability of natural and human resources is a critical issue
to consider, which requires a targeted shift towards crops that are suitable for local conditions.
5. Development of processing industries
Agribusiness in the form of processing and manufacturing industries has significant potential
to increase the value added of agricultural products, both in domestic and export-oriented
chains. Promoting agribusiness requires an enabling business environment and investment
climate, including adequate institutional frameworks, legal stability and tax incentives.
6. Adopt quality standards and implement quality control
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