A Conversation about Value-Added Agriculture Vincent Amanor-Boadu, PhD 1 Introduction Agricultural value-added initiatives have been identified as a means to help producers absorb the shocks brought about by globalization (Coltrain, Barton and Boland, 2000). 1 The pursuit of agricultural value-added initiatives, then, may be seen as a strategic response to the increased competition in agricultural sector and the rapid commoditization of its products. These trends themselves have been attributed to the increased globalization of trade resulting from various trade liberalization agreements involving the United States, such as the Canada-US Trade Agreement, NAFTA and the WTO (Amanor-Boadu, 2000). 2 Other factors influencing the commoditization of agricultural products include increasing consumer demand for convenient, ready-to- eat/cook, safe and nutritious food products and their willingness to pay premiums for such service-embedded products. The foregoing, rightly so, has extended the distance between producers and consumers, leading to the former receiving a declining share of the latter’s expenditure on food (ERS/USDA, 2002). 3 Although interest in value-added agriculture has been increasing, it is a concept that is poorly understood by many producers, policy makers and even academics. The paucity of understanding emanates from the fact that the concept has achieved a cliché status in a relatively short time and escaped the period of discussion and assessment necessary for ensuring effective comprehension. The concept has in recent years been used as a catch-all term when people want to emphasize a perceived improvements in almost anything – from value-added accounting (South Africa Breweries, 2002; Calhoun, Olivieri and Wolitzer, 1999) 4, 5 to value-added public relations (Harris, 1998). 6 Thus, value-added branding (Nilson, 1998), for example, is conceived of to be superior to plain branding and value-added consulting is expected to be better than ordinary consulting. 7 How and how much better “value-added” makes any activity it qualifies has not been discussed in the literature. Thus, value-added agriculture has been talked about as a superior form of agriculture but not much rigor has been brought to defining how to frame and measure the implied superiority. This essay has two objectives. First, it attempts to bring some clarity to the “value-added” concept, with special attention to its application in agriculture. In doing this, we also differentiate the concept from another concept with the same name, but without the hyphen – i.e., value added – which has a longer history in economics and accounting for a long time. That differentiation will help us define how the superiority of value-added activities may be illustrated. Second, the paper attempts to provide a typology of value-added agriculture with the view of building an opportunity slate to help producers interested in pursuing such initiatives assess a broader opportunity scope. 1 The author is a Visiting Assistant Professor and Director of the Value-Added Business Development Program, Department of Agricultural Economics, Kansas State University. His works involves teaching, research and outreach programs related to enhancing performance of agricultural value-added business. He may be reached by email at Vincent@agecon.ksu.edu or by telephone at 785.532-3520. 1