Producer organizations and contract farming: a comparative study of smallholders’ market strategies in South India

2018 ◽  
Vol 62 (1) ◽  
pp. 14-29
Author(s):  
Inka Gersch
Keyword(s):  
Value Creation ◽  
Value Chain ◽  
Small Scale ◽  
Global Value Chain ◽  
Competitive Strategies ◽  
Contract Farming ◽  
Value Capture ◽  
Organization Model ◽  
Market Strategies ◽  
Positive Effect

Abstract The fundamental restructuring processes of agri-food networks in developing and emerging markets have intensified the debate on how to improve the integration of smallholders into so called modern value chains. In this context, the company-driven contract farming model and the member-based model of producer organizations are discussed by practitioners and in the scholarly literature as alternatives to traditional market systems. This study compares the models’ abilities to address economic challenges of highly fragmented and small-scale dominated agriculture on a household as well as on an aggregate level. It analyzes empirical data from the Indian floriculture sector with the global value chain approach. The study reveals that the smallholders perceive both contract farming and producer organization to be beneficial for their households’ economic risk situation, while only the producer organization has a positive effect on the households’ income. The contract farming benefits production and value chain efficiency, whereas the producer organization does not show an impact in these respects. We thus observe that the contract farming model increases value creation in the overall chain, but it does not raise the producer’s value capture; while the producer organization model does not heighten value creation in the overall chain, but it lifts the producers’ value capture. The organization’s individual capabilities determine how each model addresses the economic challenges. Overall, the author argues that contract farming and producer organizations are supplementing, not competitive, strategies and should be applied in combination.

Guanxi orientation, value creation and value capture in buyer-supplier relationships: a dyadic perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lucy Sojung Lee ◽  
Weiguo Zhong
Keyword(s):  
Value Creation ◽  
Design Methodology ◽  
The Other ◽  
Matched Sample ◽  
Value Capture ◽  
Supplier Relationships ◽  
Content Type ◽  
Specific Investments ◽  
The Relationship ◽  
Positive Effect

Purpose This paper aims to investigate the importance and prevalence of Guanxi in business interactions in network-based societies such as China, few studies have the phenomenon from a dyadic view. In a business dyad, one partner may not value Guanxi and take it as a template for actions as the other does. Design/methodology/approach The authors propose that such collective and asymmetric Guanxi orientation influence both the creation and distribution of relational rent in a Guanxi dyad. Furthermore, relationship-specific investments (RSIs) moderate the relationship between dyadic Guanxi orientation and relational rent creation and distribution. Findings Based on a matched sample of supplier-buyer dyads in China, the authors find that joint Guanxi orientation is positively related to joint pie creation, whereas Guanxi orientation imbalance has a positive effect on the pie distribution imbalance. Originality/value These results contribute to the literature by revealing how dyadic Guanxi dynamics and practices affect dyadic performance and providing managers with meaningful implications for dyadic Guanxi management.

scholarly journals Agri-Food Globalisation and Rural Transformation in Chile: Smallholder Livelihoods in the Global Value Chain for Raspberries

2021 ◽  
Author(s):  
◽  
Edward R. T. Challies
Keyword(s):  
Value Chain ◽  
Food System ◽  
Rural Livelihoods ◽  
Global Scale ◽  
Growth Strategy ◽  
Small Scale ◽  
Global Value Chain ◽  
Major Barrier ◽  
Public And Private Sector

<p>As transnational capital continues to penetrate the agricultural sectors of developing countries, agri-food production-consumption is increasingly organised at the global scale. This has profound implications for small-scale farmers in the global South, who are being integrated into a globalising agri-food system geared towards the provision of agricultural commodities to meet the demands of wealthy consumers in Northern markets. Chile is one country that has purposefully inserted itself into the world trading system as an agri-exporter - a strategy that has fundamentally transformed Chilean agriculture. Framed within an examination of agrarian transformations in Chile and a world-historical account of agri-food globalisation, this thesis critically examines local-global linkages engendered by agri-food globalisation through a case study of export-oriented Chilean smallholder raspberry growers. The study aims to understand the structure and dynamics of the global value chain for raspberries, and to determine the livelihood implications of smallholder growers' participation in it. A detailed, locality case study was conducted in Yerbas Buenas - an important site of raspberry production within Chile - combining analysis of the raspberry value chain, and an in-depth survey of grower livelihoods. The value chain component focuses on key chain actors and functions within Chile, examining the role of public and private sector organisations governing and coordinating activities along the chain. The livelihoods component examines the significance of raspberry production within diversified household livelihood strategies, considering key assets, capabilities and mediating factors shaping smallholders' access to the value chain. Additionally, the research seeks to explore synergies and tensions between global value chain and sustainable rural livelihoods approaches, and to consider their integrative potential. The thesis finds that increasing competitive pressures, particularly arising from the evolving quality requirements of key overseas buyers, are seriously undermining the capacity of smallholder growers to participate in the chain. While existing private and public sector support is necessary for the participation of the smallest growers, it is not sufficient to secure their survival. It is argued that the neoliberal macroeconomic model represents a major barrier to smallholder participation, as the modernising agri-export-led growth strategy that it underpins can not accommodate the degree of intervention or the redistribution of resources required to address socio-economic inequality in the Chilean countryside.</p>

scholarly journals Articulating value and missing links in ‘Geographies of Dissociation’

2019 ◽  
Vol 9 (1) ◽  
pp. 73-77 ◽  
Author(s):  
Elizabeth Havice ◽  
John Pickles
Keyword(s):  
Value Creation ◽  
Value Chain ◽  
Value Theory ◽  
Global Value Chain ◽  
Cultural Economic ◽  
Labor Theory Of Value ◽  
Labor Theory ◽  
Direct Question ◽  
Cultural Economies ◽  
Theory Of Value

In the spirit of Ibert et al.’s ‘Geographies of Dissociation: Value Creation, “Dark” Places, and “Missing” Links’, we briefly suggest several ways in which ‘Geographies of Dissociation’ itself elides certain crucial issues in the cultural economies of value. The first relates to the need to develop more fully and concretely the relational spatialities of globally networked production. The second follows from this by suggesting that, in order to consolidate its argument of lacunae and elisions, the article overlooks or downplays crucial elements in the work of global value chain research, cultural studies and broader cultural-economic geography, and value theory that have—in their own ways—developed complex analyses of the spatial articulations of governance, ownership, branding, and the production of value. We conclude by returning to Marx’s value theory of labor (not to be confused with Ricardian labor theory of value) to suggest that a more direct question about what drives systems of cultural valuation in the context of networked production might enable the authors to advance the development of a dissociative geography.

Negotiating the Value Chain: A Study of Surplus and Distribution in Indian Markets for Food

2020 ◽  
Vol 45 (2) ◽  
pp. 460-492 ◽  
Author(s):  
Amy J. Cohen
Keyword(s):  
Social Relationships ◽  
Value Creation ◽  
Value Chain ◽  
Smallholder Farmers ◽  
Economic Value ◽  
Value Chains ◽  
Global Value Chain ◽  
Small Farmers ◽  
Local Economies ◽  
Equitable Distribution

To enhance the welfare of smallholder farmers, development agencies increasingly promote “value chain agriculture” where farmers partner with more powerful entities, such as corporations and nongovernmental organizations (NGOs), to create new sources of economic value. Via a qualitative study of how small farmers negotiate with the buyers of retail and agribusiness corporations in India, this article explores why the promise of value creation can appear so elusive on the ground. It makes two primary contributions. For global value chain scholars, it illustrates how studying value chains “below” the level of the firm illuminates complex ways in which new pathways for economic development are constrained by actually existing local economies—and how these local economies, rather than easily replaced, shape what counts as a source of value for small farmers. For negotiation scholars, it illustrates how, in some contexts, an equitable distribution of risk and social relationships may need to precede anything we call value creation.

scholarly journals Research on the Digitization of Manufacturing Will Enhance the Competitiveness of the Value Chain Based on Advantage Comparison

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
You-Qun Wu ◽  
Huai-Xin Lu ◽  
Xin-Lin Liao ◽  
Jia-Ming Zhu
Keyword(s):  
Value Chain ◽  
Service Industry ◽  
Global Value Chain ◽  
Digital Input ◽  
Technology Service ◽  
Different Types ◽  
High Knowledge ◽  
Information Technology Service ◽  
Knowledge Intensive ◽  
Positive Effect

This paper uses WIOD data to calculate and analyze the dominant comparative advantage of Chinese manufacturing global value chain (GVC) based on the WWZ method and empirically studies the influence of digitization on the competitiveness of manufacturing GVC. The main findings are as follows: (1) The competitiveness of Chinese manufacturing GVC has been improved as a whole. The GVC competitiveness of different types of industries is quite different: GVC in middle- and low-knowledge-intensive industries have the highest competitiveness, while those with middle- and high-knowledge-intensive industries have the lowest competitiveness and apparent shortboard industries. (2) Digitization is conducive for enhancing the competitiveness of manufacturing GVC. In terms of industries, digitization has a significant positive effect on the GVC competitiveness of middle and high-knowledge-intensive industries but not on low knowledge ones. As for the sources of digital input, the positive effect is more outstanding. Also, it is more remarkable when it comes to the software and information technology service industry. (3) As for the mechanism of action, labor productivity is an effective way to improve the manufacturing GVC competitiveness digitally. Finally, after a robustness test, the positive effect of the digital input remains robust.

Chasing Foreign Capital

2018 ◽  
pp. 22-47
Author(s):  
Ling Chen
Keyword(s):  
Value Chain ◽  
Local Governments ◽  
National Level ◽  
Foreign Firms ◽  
Small Scale ◽  
Global Value Chain ◽  
City Governments ◽  
Foreign Investors ◽  
Fdi Attraction

This chapter examines the rise of the FDI-attraction paradigm at the national level and the emergence of local investment-seeking states in the 1990s. It explores in detail the varied strategies that city governments employed to attract foreign investors to launch the campaign of FDI attraction, ranging from tax cuts and land and utility discounts to industrial zone establishments. At one end of the strategic continuum are local governments that prioritized large, leading multinationals that have been playing the role of the “dragon’s head” at the top of the global value chain, whereas, on the other end are cities where bureaucrats brokered deals with small-scale foreign firms established by “guerilla investors” at the bottom of the value chain through flexible arrangements.

Does contract farming improve smallholder income? The case of avocado farmers in Kenya

2016 ◽  
Vol 6 (1) ◽  
pp. 2-20 ◽  
Author(s):  
Mercy Maiwa Mwambi ◽  
Judith Oduol ◽  
Patience Mshenga ◽  
Mwanarusi Saidi
Keyword(s):  
Value Chain ◽  
Large Scale ◽  
Smallholder Farmers ◽  
Small Scale ◽  
Contract Farming ◽  
Variable Model ◽  
Content Type ◽  
Market Opportunities ◽  
Household Farm

Purpose – Contract farming (CF) is seen as a tool for creating new market opportunities hence increasing incomes for smallholder farmers. Critics, however, argue that CF is likely to pass risks to small scale farmers, thus favouring large scale farmers at the expense of smallholder farmers. The purpose of this paper is to examine the effect of CF on smallholder farmers’ income using a case study of avocado farmers in Kandara district in Kenya. Design/methodology/approach – The study uses data collected from 100 smallholder avocado farmers in Kandara district in Kenya and employs an instrumental variable model (Probit-2SLS) to control for endogeneity in participation in the contract and examine the effect of CF on household, farm and avocado income. Findings – The results indicate that participation in CF is not sufficient to improve household, farm and avocado income. Question remains regarding efficient implementation of CF arrangements to promote spill over effects on other household enterprises. Research limitations/implications – The research was carried out using farmers in Kandara district in Kenya as a case study, findings might therefore not reflect the status of CF in all countries. Originality/value – The paper contributes to the growing debate on the effect of value chain upgrading strategies such as contracting on smallholder farmers’ welfare. The form of contracting studied in this paper differs from the standard contracts in that the key stakeholders (producers) are loosely enjoined in the contract through officials of their groups.

The limits and promises of embeddedness as a strategy for social value creation

2019 ◽  
Vol 16 (1) ◽  
pp. 100-115 ◽  
Author(s):  
Addisu A. Lashitew ◽  
Rob van Tulder
Keyword(s):  
Value Creation ◽  
Value Chain ◽  
Multinational Enterprises ◽  
Social Value ◽  
Small Scale ◽  
Intermediate Step ◽  
Market Exchange ◽  
Formal Institutions ◽  
Content Type ◽  
Social Value Creation

Purpose Multinational enterprises (MNEs) attempting to create social value in base of the pyramid (BoP) economies are encumbered by unique market and institutional barriers. To overcome these challenges, BoP scholars have advocated the strategy of using embeddedness as a replacement for inefficient formal institutions. Reliance on informal social ties for coordinating market exchange, however, leads to costly investments, exposure to opportunism and the creation of nontransferable capabilities. This paper aims to investigate these issues. Design/methodology/approach The authors argue that embeddedness should be used as an intermediate step toward developing more enduring formal institutions rather than as a replacement for them. Findings The authors put forward the notion of proto-institutions as a useful concept for exploring how MNEs can engage in co-designing efficient and inclusive institutional forms aimed at engendering long-term social value creation. Originality/value The authors identify three institutional fields wherein MNEs can leverage social embeddedness to develop proto-institutions that are potentially transferable to become formal institutions. First, MNEs can build governance institutions that can enhance coordination among local actors. Second, MNEs can experiment with small-scale change and adaptation of market institutions that reduce transaction costs and facilitate market exchanges. For example, improved institutional practices in value chain governance can boost business performance while also improving the livelihoods of supply chain partners. Finally, the authors discuss the potential for developing favorable socio-cultural institutions by introducing new principles of organizing or educational practices.

scholarly journals Corporate Tax Reform and “Value Creation”: Towards Unfettered Diagonal Re-allocation across the Global Inequality Chain

2016 ◽  
Vol 7 (1) ◽  
Author(s):  
David Quentin
Keyword(s):  
Value Creation ◽  
Value Chain ◽  
Tax Reform ◽  
Value Theory ◽  
Illustrative Case ◽  
Global Value Chain ◽  
Corporate Tax ◽  
Global Inequality ◽  
Corporate Tax Reform ◽  
Theory Of Value

Abstract Discussion of corporate tax reform loosely uses concepts like “value creation” and “economic substance” as a basis for systematic departures from the tax outcomes that would otherwise eventuate from computational artifacts based on price, but in fact mainstream economics does not have a theory of value creation as distinct from computational artifacts based on price. Corporate tax reform discourse is therefore an unacknowledged exercise in heterodox value theory. This article deploys global value chain theory to question a key assumption in that exercise; the assumption that while intra-group pricing may be modified or ignored for the purposes of reallocating the corporate tax base between jurisdictions for corporate tax purposes, prices arrived at between entities not under common control are sacrosanct. The article proceeds to deploy an expanded version of the global value chain analytic, the “global inequality chain”, to (i) investigate this question using a schematic illustrative case study based around Amazon’s UK/Luxembourg structuring, and (ii) to develop the beginnings of a concept of “unitary taxation by formulary apportionment of the entire value chain”, which would enable unfettered “diagonal” re-allocations across the space which the global inequality chain describes.

Competition and power in global value chains

2020 ◽  
pp. 102452942097515
Author(s):  
Pamela Mondliwa ◽  
Simon Roberts ◽  
Stefano Ponte
Keyword(s):  
South Africa ◽  
Value Creation ◽  
Value Chain ◽  
Bargaining Power ◽  
Value Chains ◽  
Global Value Chain ◽  
Barriers To Entry ◽  
Government Regulations ◽  
Competition Rules ◽  
Competition Laws

This paper bridges the understanding of power in the global value chain literature and the analysis of market power and barriers to entry in competition economics. It draws on competition economics to provide a better understanding of the ways in which bargaining power between firms shapes patterns of value creation and capture along value chains. It also considers the influence which competition laws have on the conduct of large and powerful firms. Through the case studies of supermarkets and petrochemicals in South Africa, the paper shows how the dominant bargaining power of lead firms owes much to the historical impact of government regulations and industrial policy, including those enforced by competition authorities. We conclude by highlighting that choices regarding the type of competition rules to be adopted have important implications for the ability of supplier firms to build capabilities and to upgrade in value chains.

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