The Benefits of Informal Processing in Small-Scale Agricultural Value Chains
Agriculture is the backbone of many economies, especially those in developing countries. However, small-scale farmers face numerous challenges, including limited access to markets and inadequate value addition. Informal processing within small-scale agricultural value chains, however, has proven to be a viable solution to these challenges.
What is Informal Processing?
Informal processing refers to the transformation of raw agricultural products into value-added products in small-scale, decentralized, and mostly unregulated processing facilities. These facilities are usually run by small-scale entrepreneurs who purchase raw agricultural products from farmers and transform them into marketable products.
Benefits of Informal Processing
Informal processing has numerous benefits to small-scale agribusinesses. Firstly, it presents an opportunity for farmers to reduce post-harvest losses by processing their products before they get to market. Secondly, informal processing facilities offer employment opportunities for local communities. Thirdly, informal processing facilities enhance the competitiveness of small-scale farmers by adding value to their products, thereby increasing their income.
Examples of the Benefits of Informal Processing
In Kenya, for instance, the Juhudi Kilimo Foundation, in collaboration with the International Finance Corporation, has been instrumental in the establishment of informal processing facilities for potato farmers. The facilities have enabled the farmers to process their products into chips and crisps, thereby increasing their income by more than 50%.
In India, the Self Employed Women’s Association (SEWA) has supported the establishment of informal processing facilities for mango farmers. The facilities have enabled the farmers to produce mango juice, dried mangoes, and pickles, which has increased their income by more than 100%.
Challenges Faced by Informal Processing
Informal processing, however, faces numerous challenges, including a lack of capital, inadequate skills, and limited access to markets. In addition, most informal processing facilities operate in informal settings, which exposes them to health hazards and environmental degradation.
Conclusion
In conclusion, informal processing presents an opportunity for small-scale farmers to add value to their products, reduce post-harvest losses, and increase their income. However, to realize these benefits, informal processing requires adequate support in terms of capital, skills, and access to markets. Informal processing facilities must also ensure that they operate in a safe and environmentally friendly manner.
