Value-added agriculture

Value-added agriculture refers most generally to manufacturing processes that increase the value of primary agricultural commodities. Value-added agriculture may also refer to increasing the economic value of a commodity through particular production processes, e.g., organic produce, or through regionally branded products that increase consumer appeal and willingness to pay a premium over similar but undifferentiated products.

This concept has gained currency in the small farm policy debate, in response to the concern that the farm value of the consumer food dollar continues to decrease. Value added agriculture might be a means for farmers to capture a larger share of the consumer food dollar. Examples include direct marketing; farmer ownership of processing facilities; and producing farm products with a higher intrinsic value (such as identity-preserved grains, organic produce, hormone-free beef, free-range chickens; etc.), for which buyers are willing to pay a higher price than for more traditional bulk commodities. Value-added agriculture is regarded by some as a significant rural development strategy. Small-scale, organic food processing, non-traditional crop production, agri-tourism, and bio-fuels development are examples of various value-added projects that have created new jobs in some rural places.

References

•  This article incorporates public domain material from Jasper Womach. Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition (PDF). Congressional Research Service.