CHAPTER ONE1.0 INTRODUCTION1.1BACKGROUND OF STUDYValue chain seems to be the keyword in recent agricultural debate often in conjunction with rural economic development and agric-business production (Entwicklung and Raum, 5/2005). According to Hoeffler, (2008) Value chain (V.C) can be described as a sequence of productive process from the provision of specific inputs for a particular product to primary production, transportation, processing, marketing and trading to the final consumer. It can also be seen as a sequence of activities that goods passes through, with value being added in each stage and actors are connected along these chains of producing, transforming, processing and bringing these goods and services to the end consumers (Fries et al, 2004). In agricultural production, value chain (V.C) is a very important concept or tool if productivity is to be maximized (Webber and Labaste, 2010) and these apply for both crop and livestock production in agriculture it also treats enterprises not as a singular entity, but as part of an integrated chain of economic functions and linkages across geographical boundaries. The concept of value chain through it analysis (value chain analysis V.C.A) also emphasizes on diverse interrelationship among market opportunities, constraints and directives at various level of the supply chain and at different levels of influence from which specific value addition takes place.