Role of Support Activities in Enhancing Agricultural Value Chains

Every agricultural value chain has two engines working side by side. The first engine – primary activities like farming, processing, and marketing – is the one most people see. The second engine, often invisible but equally powerful, consists of support activities. These are the behind-the-scenes functions that keep the entire chain running smoothly: how inputs are purchased, how technology is adopted, how workers are trained, and how essential facilities are built and maintained. Without strong support activities, even the best farming operations struggle to stay competitive. This concept, originally outlined by Michael Porter in his value chain framework, is now central to how modern agricultural enterprises think about efficiency, quality, and profitability.

What are support activities in the agricultural value chain? 🔗

In Porter’s value chain model, activities are divided into two groups. Primary activities – such as inbound logistics, production, processing, and marketing – directly create and deliver a product. Support activities, on the other hand, do not produce goods themselves. Instead, they strengthen every primary activity by providing necessary inputs, expertise, technology, and organizational systems. In agriculture, these support activities are procurement, technological development, human resource management, and infrastructure. Each one cuts across the entire value chain rather than applying to just one stage. For example, procurement is not limited to buying seeds – it also covers purchasing packaging materials, transport services, and processing equipment. When these support functions are well-managed, they reduce waste, lower costs, and raise the quality of agricultural products at every stage from farm to consumer.

Procurement: the foundation of input management 🔗

Procurement in the agricultural value chain refers to the function of acquiring all inputs needed across every stage of operations – not just raw materials, but also machinery, lab equipment, packaging, and consumable supplies. It is often one of the most underestimated support activities, yet its impact on quality and cost is enormous.

Why procurement matters at every stage 🔗

A common misconception is that procurement only applies to buying seeds and fertilizers. In reality, it supports multiple value chain stages. A processing unit needs to procure packaging, a marketing team needs promotional materials, and a logistics department needs fuel and transport contracts. As FAO’s sustainable food value chain framework highlights, support providers supply physical inputs like seeds and packaging, as well as services like insurance, transport, and laboratory testing – all of which fall under the procurement function.

Strategic procurement in practice 🔗

When procurement is handled strategically, agricultural enterprises can negotiate better prices through bulk purchasing, secure higher-quality inputs, and establish reliable supplier relationships. For instance, a dairy cooperative that coordinates feed delivery schedules can reduce storage costs while ensuring consistent nutrition for cattle. In India, the government’s Minimum Support Price (MSP) mechanism acts as a procurement support tool that helps stabilize input costs and market prices for farmers. Strategic procurement also means evaluating supplier quality over time – poor-quality seeds or contaminated fertilizer can undermine an entire season’s production, regardless of how good other operations are.

Importantly, procurement decisions in one part of the value chain affect other parts. Choosing cheaper but lower-quality inputs might reduce purchasing costs, but it can increase production defects, raise inspection costs, and ultimately hurt the final product’s market value.

Technological development: the engine of modern agriculture 🔗

Technology development as a support activity includes every effort to improve products and processes across the value chain. This ranges from adopting new crop varieties to implementing data-driven farming tools, automating warehouse operations, and using digital platforms for market access.

Precision agriculture technologies 🔗

One of the most significant technological shifts in agriculture is the rise of precision agriculture. According to a U.S. Government Accountability Office (GAO) report, precision agriculture technologies allow farmers to precisely apply inputs like water, fertilizer, and feed, making production significantly more efficient. Examples include GPS-guided tractor systems, drone-based crop monitoring, in-ground soil sensors, and targeted spray systems that use machine learning.

The USDA’s Agricultural Research Service reports that tractor guidance systems alone can improve on-farm efficiency by approximately 20 percent by reducing overlaps and gaps during planting, spraying, and fertilizer application. This translates to lower fuel consumption, reduced chemical use, and ultimately better environmental outcomes alongside higher profitability.

Digital tools and ICT in value chains 🔗

Beyond the farm, technology development also transforms how agricultural products move through the value chain. Information and communication technologies (ICTs) have become important tools for value chain efficiency. Mobile applications deliver market price information directly to farmers via SMS, enabling better selling decisions. Tools like blockchain are enabling full supply chain traceability, allowing consumers to track products from farm to table. IoT sensors monitor storage conditions and transport temperatures in real time, reducing post-harvest losses that can otherwise account for significant portions of total production in developing regions.

However, technology adoption is not without challenges. High upfront costs, lack of interoperability standards between different tools, and limited digital literacy in rural areas remain significant barriers – especially for smallholder farmers who make up the majority of agricultural producers worldwide.

Human resource management: building a skilled agricultural workforce 🔗

The agricultural sector’s workforce needs have changed dramatically. Modern farming requires people who can operate GPS-guided machinery, interpret sensor data, manage digital supply chains, and comply with food safety regulations. Human resource management (HRM) as a support activity ensures that the right people are in place, properly trained, and motivated to perform value-adding tasks.

Training and skill development 🔗

As agriculture becomes more technology-intensive, the gap between available skills and required skills widens. A research review published in PMC (PubMed Central) notes that precision agriculture techniques developed under controlled research conditions often require specialized abilities for on-farm implementation, including calibration of devices, data interpretation, and system maintenance. Without trained operators, even the most advanced technologies deliver suboptimal results.

Effective HRM in agriculture involves several components: recruiting workers with relevant technical backgrounds, providing ongoing training programs for existing staff, creating safety protocols for equipment use, and building workplace cultures that attract and retain talent in an industry often perceived as physically demanding and low-paying.

The challenge of labor shortages 🔗

Many agricultural regions face an ageing and shrinking farm workforce. In parts of Asia and the Pacific, fewer and older farmers are being asked to produce more food for growing populations. This reality makes human resource management not just a support function but a strategic priority. Enterprises that invest in their workforce – through competitive wages, career development pathways, and improved working conditions – gain a significant edge in retaining skilled workers who drive efficiency across the value chain.

It is also worth noting that HRM extends beyond farmworkers. Managers, logistics coordinators, quality inspectors, and marketing specialists all need targeted development. The entire chain is only as strong as the people operating it.

Infrastructure: the physical backbone of the value chain 🔗

Infrastructure as a support activity encompasses two dimensions. At the firm level, it includes general management, finance, legal compliance, strategic planning, and organizational systems. At the broader level, it covers physical facilities like roads, cold storage, irrigation networks, marketplaces, power grids, and communication systems.

Farm-level and organizational infrastructure 🔗

Within an agricultural enterprise, infrastructure means having functional accounting systems, legal compliance frameworks, quality control laboratories, and strategic planning capabilities. A farm or agribusiness without proper financial management cannot track costs accurately, making it impossible to identify where value is being lost. Similarly, without strategic planning, enterprises react to market changes instead of anticipating them.

Public infrastructure and its impact 🔗

At the regional and national level, infrastructure plays an outsized role in agricultural value chain performance. The Asian Development Bank (ADB) has emphasized that road and market infrastructure provide critical linkages between value chain participants. However, roads must actually connect agricultural areas with competitive advantages to strategic markets – simply building roads without considering trade routes and production zones limits their impact.

Cold chain infrastructure deserves special attention. Without proper refrigeration from harvest through transport to retail, perishable products like fruits, vegetables, dairy, and meat suffer enormous losses. In many developing countries, the absence of cold chain facilities means that a significant share of produce never reaches the consumer. The value of avoidable post-harvest losses in a single year can exceed the investment required to build the infrastructure that would prevent those losses in the long run.

Similarly, reliable electricity, internet connectivity, and water supply systems are prerequisites for adopting the very technologies discussed earlier. A farm cannot run IoT sensors without electricity, and a cooperative cannot use digital market platforms without internet access.

How support activities work together 🔗

The real strength of support activities lies not in each function operating independently, but in their integration. When procurement, technology, human resources, and infrastructure are coordinated, they create compounding benefits that far exceed what any single function can achieve alone.

Synergies and interdependencies 🔗

Consider a practical example. A mango cooperative invests in cold storage infrastructure (infrastructure). This allows them to negotiate contracts for higher-quality packaging materials that require temperature-controlled storage (procurement). They train their workers to operate the cold storage units and manage quality checks (human resource management). They install IoT sensors to monitor temperatures remotely and use data analytics to optimize storage durations (technological development). The result is a significant reduction in post-harvest losses, consistent product quality, and access to premium export markets – an outcome no single support activity could have produced on its own.

Competitive advantage through support activities 🔗

Agricultural businesses that excel in coordinating their support activities often develop sustainable competitive advantages. A company combining strategic procurement with advanced technology, skilled human resources, and efficient infrastructure can consistently deliver higher-quality products at competitive prices. This coordination transforms marginal agricultural operations into highly profitable enterprises. The initial investments may seem significant, but the long-term returns in efficiency, quality, and market positioning typically justify them.

Challenges in optimizing support activities 🔗

Despite their importance, support activities in agriculture face several persistent challenges, especially in developing economies.

Access and affordability for smallholders 🔗

Small-scale farmers – who produce a substantial share of the world’s food – often lack the resources to invest in advanced procurement systems, technology, training, or infrastructure. The GAO report on precision agriculture notes that while these technologies have been available since the 1990s, only about 27 percent of U.S. farms or ranches used precision agriculture practices as of 2023. In developing countries, adoption rates are far lower. Addressing this requires collective action through cooperatives, government subsidies, and public-private partnerships.

Policy and institutional gaps 🔗

Many countries lack coherent policies that support the development of all four support activities simultaneously. Infrastructure investments may occur without corresponding investments in training or technology. Procurement support programs may exist without market infrastructure to move products efficiently. A comprehensive, integrated approach to policy – covering infrastructure, technology, human capital, and input markets together – is essential for meaningful value chain development.

The bigger picture: support activities and food security 🔗

At a macro level, well-functioning support activities contribute directly to food security and poverty reduction. The FAO’s sustainable food value chain framework connects value chain performance to broader development outcomes: when chains operate efficiently, they create jobs, generate tax revenue, deliver affordable food to consumers, and reduce environmental damage. Support activities are the mechanisms through which these efficiencies are achieved. Investments in rural infrastructure, agricultural technology, workforce training, and procurement systems do not just benefit individual farms – they strengthen the entire food system.

What do you think? How can smallholder farmers in developing countries better access the support activities – technology, infrastructure, training, procurement systems – that larger enterprises rely on? What role should governments and the private sector each play in bridging this gap?

References

1. https://en.wikipedia.org/wiki/Agricultural_value_chain
2. https://www.fao.org/sustainable-food-value-chains/what-is-it/en/
3. https://openknowledge.fao.org/server/api/core/bitstreams/ac5cd783-8207-46b0-ab8d-b61858796fdd/content
4. https://www.gao.gov/products/gao-24-105962
5. https://www.ars.usda.gov/oc/utm/benefits-and-evolution-of-precision-agriculture/
6. https://pmc.ncbi.nlm.nih.gov/articles/PMC8388655/
7. https://www.adb.org/sites/default/files/evaluation-document/35898/files/eks-agriculturalvaluechain.pdf