Value addition entails changing a raw agricultural product into something new through packaging, processing, cooling, drying, extracting or any other type of process that differentiates the product from the original raw commodity. The benefits of investing in agribusiness value addition include increased revenue, precision farming, increased shelf life, improved bargaining power and an opportunity for brand creation caused by consumer loyalty.
Producers have the challenge to be responsive to consumer demands by producing what is desired. Attentiveness to consumer demands in quality, variety and packaging is important because demographic trends show growth in the convenience-oriented, health-conscious, and environmentally concerned sectors where the price is not as important as quality.
As both global and local markets for value-added products become more competitive, it is important for farmers, investors, and other value chain actors to seek ways of taking advantage of the value-adding opportunities. Moreover, producers are experiencing competitive advantages obtainable with processed products compared to raw commodities.
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