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D-value-add Dictionary

Value-add

Increasing the worth of a product by processing, packing or branding it

All termsIntroduced in Module 8Open the Toolkit
An open dictionary on a farm office desk
Plain meaning
Increasing the worth of a product by processing, packing or branding it
How to use it
Price the processed product, subtract the processing cost and compare with the raw sale. Value-add pays only when the margin covers the extra capital and risk.
South African benchmark
South Africa keeps soya, potato and fruit processing margins at home (Articles 8, 45 and 29).
Country notes
Applies the same way in all five markets.
Go and read
C8 Lesson 8.4, C10 Lesson 10.2, M16-U2
Calculate it
T-M15-02 Processing Margin
Library sources
LIB-A037
See also
Agro-processing, Commodity trap, Provenance
Value-add steps from raw crop to packed product with rising valueValue-add: each step multiplies what the crop is worthx 1.0Raw cropx 1.3Cleaned and gradedx 2.0Processedx 3.0Packed and brandedIllustrative multipliers: each step also adds cost, skills and equipment.
Value-add, shown as a diagram.

Introduced in C8 Value-Add and Processing.