Page 44 - Banking Finance July 2023

ARTICLE

AGRICULTURAL

VALUE CHAIN

FINANCING - AN

EXPLORABLE

AVENUE

Abstract
A value chain is characterised by a market-focussed collaboration of a set of enterprises working together to produce,
process and market products and services in an effective and efficient manner. The actors (private and public, including
service providers) and the sequence of value-adding activities involved in bringing a product from production to the
end-consumer. In agriculture they can be thought of as a "farm-to-fork" set of inputs, processes and flows (Miller and
da Silva, 2007). In India, the traditional agri value chains in existence are small scale, unorganised, fragmented and
disjointed where the produce traversed through several channels and players, often redundant, requiring several
touch points at the farm gate end (Barrett et al., 2022). Catalysed by changes to global markets, urbanization, and
other trends, Agrifood value chains have been growing and changing rapidly in India over the past few decades.

Introduction agriculture, forestry and fisheries, and biodiversity. At
present, the Government is focusing on improving the
Agriculture has always been a mainstream sector in India
country's agricultural value chains (AVCs).
with close to 50% of the country's population involved in
agricultural and allied activities for their livelihoods and the
The term Agriculture Value Chains (AVC) refers to the set of
sector contributing significantly to the country's gross
interrelated activities involved in delivering an agricultural
domestic product (GDP). Nearly 700 million people in India
product from its production to the final consumer in a
live in rural areas and are directly dependent on sectors like
manner that support investments, growth, and
competitiveness of the value chain actors (Chen K.Z., et.al
About the author 2015). The concept of Agricultural Value Chain includes the
full range of activities and participants involved in moving
J. Rajesh Kumar
agricultural products from input suppliers to farmers' fields,
Chief Manager (Faculty)
and ultimately, to consumers' tables.
Bank of Baroda
Baroda Academy
Chennai The AVC Finance approach enables lenders to capitalize on

40 | 2023 | JULY | BANKING FINANCE