Promoting Agricultural Value Chains:
In the OIC Member Countries
14
as availability of raw materials, costs of labour and human resource capacities, etc. Thirdly, the
governance structure of a chain pertains to notions of how chains are organised and managed.
The question of who has the power and ability to exert control along the value chain is of
central importance. Finally, the institutional framework contains the regulatory conditions and
policies which shape the value chain. Such contextual factors can refer to local, national or
international conditions and dynamics.
1.4 Approach taken in this report
Based on the GVC approach, this report aims to examine the general structure and
organisation of agricultural value chains in OIC Member Countries, including the actors
producing, processing and distributing agricultural products, the public policies, regulations
and institutions governing and supporting these activities, the networks of relationships
linking suppliers, processors, transporters and traders in ways that connect producers with
final consumers, and the physical infrastructure, logistics and standards that exist to enable
production, processing, trading and distribution activities.
To capture the breadth of these interlinked issues, the framework analyses five dimensions,
each with a variety of indicators to guide the research (see Table 1-1)
(1) Institutional framework and public policies. This refers to the collection of institutions,
policies, legislative issues and support services which constitute the setting in which value
chain actors are embedded and which influence how these actors participate in chains. Not
all firms and countries participate equally in agricultural value chains. Some countries have
managed to position themselves at the core of many value chains, either as the host country
to lead firms or as suppliers of very specific tasks, while others participate very little or only
in the periphery. These varying degrees of participation are determined by many
considerations, some of which are fixed (such as a country’s geographic location and resource
endowment), while others can be shaped by public policy and legislation (such as a country’s
human capital, physical infrastructure, and overall investment climate) (OECD et al., 2014).
Increased attention is therefore paid to how governments can promote enabling
environments which are conducive to the development of value chains and value-adding
activities. Governments are recognised to have a key role in supporting value chain actors,
creating stable conditions for investments, encourage diversification, and open up new
opportunities for those who may become marginalised by global developments. While public
policies cannot address all of the challenges that exist, improvements to the institutional
framework through effective laws, regulations and processes can help chain actors to
enhance their competitiveness and insert themselves into profitable value chains (Global
Harvest Initiative, 2013).
(2) Standards. Standards are commonly accepted benchmarks that transmit information to
customers and end-users about a product’s (technical) specifications, its compliance with
health and safety criteria or the processes by which it has been produced and sourced
(Nadvi, 2008, p. 325). Standards for agricultural products fall in different categories.
Firstly, standards can refer to technical specifications, such as variety, size, colour, or
shape of a product. Secondly, standards can relate to food safety, including issues of
maximum levels of residues (MRLs). Finally, standards can indicate the intrinsic value of a
product, such as specifications regarding production processes. This is the case with
organic and other social or environmental standards. Regional-specific branding and