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Certified standards and vertical coordination in aquaculture: The case of Pangasius from Vietnam

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Abstract

This paper explores the interaction between food standards and vertical coordination in the Vietnamese pangasius sector. For farmers and processors alike, the adoption of standards is motivated by a desire to improve market access by ensuring high quality supply. Instead of encouraging the application of standards and contract farming, processing companies prefer to vertically integrate primary production largely due to concerns over the stable supply of pangasius with satisfactory quality and safety attributes. These tendencies increase the market dominance of industrial farming and worsen the position of small household farms.

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... In other words, the supply of Vietnamese pangasius is very sensitive to the market price of live pangasius. For example, when the price is high, farmers will quickly increase their production in the next crop or prolong the sale (Bush and Belton, 2011;Trifković, 2014). This often leads to live pangasius output exceeding the processing capacity of the industry in the following crop. ...
... At the exporter stage, in 2010, about 291 pangasius processors and traders exported to EU markets (van Duijn et al., 2012). Most of the large-scale farms are owned by Vietnamese companies that process and export pangasius while most of the medium and small-scale farms are owned by individual households (van Duijn et al., 2012;Trifković, 2014). According to van Duijn et al. (2012), there was a lack of integration between farmers and processors in Vietnamese pangasius sector. ...
... The null hypothesis that the factor loading in the equation for export prices equals 0 is not rejected, implying that farm prices do not drive export prices in the long run. The cointegration between farm prices and export prices likely reflect the close cooperation between exporters and pangasius farmers, for example through training programs to ensure fish quality and safety for export to the EU market (Bush and Belton, 2011;Khoi, 2011;Trifković, 2014). This close cooperation confirms the unidirectional causality from export to farm prices. ...
Article
Price transmission in international supply chains is important to ensure that price premiums paid by consumers for environmental sustainability labels are transmitted upstream to farmers. This facilitates investment in sustainable aquaculture systems. This study analyzes the price transmission from the international retail stage to the Vietnamese farm, focusing on frozen pangasius fillets. We used monthly nominal prices at farm and export stages in Vietnam, and at wholesale and retail stages in Poland for the period from August 2010 to December 2014. Price signals at the Polish retail stage were found to transmit back to the wholesale, export, and farm stages. Moreover, price transmission from wholesale to export and from export to farm is characterized by both short- and long-run symmetries. In the short run, retailers tend to transmit only wholesale price increases to their customers and wholesalers transmit only retail price increases to exporters. A long-run relationship between retailers and wholesalers is absent, thereby reducing the ability of chain actors to respond to all market signals, including downward changes.
... Awareness, interest, and attitude One of the most significant factors in compliance is the awareness of the necessity and importance of complying [37]. Most of farmers and capturers perceived regulations and standards as complexities and difficulties, not a beneficial market tool [37]. ...
... Awareness, interest, and attitude One of the most significant factors in compliance is the awareness of the necessity and importance of complying [37]. Most of farmers and capturers perceived regulations and standards as complexities and difficulties, not a beneficial market tool [37]. Findings from the recent survey of Hansen and Trifković [38] showed that according to fish farmers, compliance only benefits directly the upper and a part of middle class farmers instead of lower and some middle class farmers [39]. ...
... Findings from the recent survey of Hansen and Trifković [38] showed that according to fish farmers, compliance only benefits directly the upper and a part of middle class farmers instead of lower and some middle class farmers [39]. According to Trifković [37], only 20% of household owned farms apply standards in the case of pangasius sector, they perceived that the antibiotic residues index is the only one requirement for food quality and safety [40]. Even when benefits were recognized, due to some prohibiting factors such as pursuing lowend markets, short term profit aims, and facing financial constraints, farmers and capturers have very low interest in compliance, resist changes in farming and capturing procedures, and feel risk aversion when applying new systems. ...
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Recently, along with the emergence of food scandals, food supply chains have to face with ever-increasing pressure from compliance with food quality and safety regulations and standards. This paper aims to explore critical factors of compliance risk in food supply chain with an illustrated case in Vietnamese seafood industry. To this end, this study takes advantage of both primary and secondary data sources through a comprehensive literature research of industrial and scientific papers, combined with expert interview. Findings showed that there are three main critical factor groups influencing on compliance risk including challenges originating from Vietnamese food supply chain itself, characteristics of regulation and standards, and business environment. Furthermore, author proposed enablers to eliminate compliance risks to food supply chain managers as well as recommendations to government and other influencers and supporters.
... Contract farming can also be a means of ensuring supply side quality specifications, as seen in the Pangasius sector in Vietnam (Trifkovic 2014). Larger processors vertically integrated their primary functions and were both suppliers of inputs (seed and antibiotics) and buyers of Pangasius based on international food standards. ...
... The agreements made were a means to source unprocessed Pangasius through marketing contracts with smallholders. To make contracts more inclusive, Trifkovic (2014) suggests that agreements should contain knowledge sharing and learning opportunities that allow smallholders to upgrade their farms. Khiem et al. (2010), however, showed that the smallest Pangasius grow-out farmers in Vietnam who did not have the infrastructure and capital to invest in upgrading opted to exit the value chain altogether (i.e. ...
... In the mussel value chain in South Africa, for example, elements of both contract farming and franchise models were used (Karaan 1999(Karaan , 2002. Trifkovic (2014) suggested that certification standards and PPPs were critical in establishing an enabling environment for contract farming in the Pangasius value chain in Vietnam. Figure 1 presents how the different IBMs can be included in an aquaculture value chain to enable greater participation of and benefits derived by smallholders and other poor actors. The figure provides an overview of how the different models work together and how the development of horizontal and vertical relations can operate simultaneously within IBMs operating in this hypothetical value chain. ...
Article
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For aquaculture to continue along its current growth trajectory and contribute towards achieving the Sustainable Development Goals, value chains must become more inclusive. Smallholders and other local value chain actors are often constrained by circumstances and market failures in the global aquaculture industry. Integrating these actors into aquaculture value chains through inclusive business models (IBMs) is often touted as a solution to sustainable and ethical trade and business that can generate development outcomes. We reviewed 36 papers under seven business models commonly used in agriculture development to assess their application in aquaculture value chains in lower‐income countries. A global value chain (GVC) analysis is used to unpack the economic and social upgrading objectives of the different IBMs, as well as the types of relational coordination used between actors in the chain to achieve development outcomes. The extent to which these IBMs helped poor actors overcome certain barriers is evaluated with a focus on how they may ensure or be a risk to inclusiveness through the relations and upgrading opportunities evident in their make‐up. The analysis found that the majority of the models focused on economic upgrading over social upgrading. Providing opportunities for the latter is key to achieving the inclusive objectives of IBMs. Greater horizontal coordination between actors can create further opportunities for economic upgrading established under vertical coordination with other nodes upstream and downstream in a value chain. There is a need to further contextualize these models to aquaculture systems and develop clear indicators of inclusiveness.
... To explain the conditions that lead Southern countries to opt for one of the two governance forms, we compare sustainable aquaculture governance in three major Asian producer countries -Thailand, Vietnam and China. Over the last two decades, these three value chains have shown important similarities in terms of their exports to Northern markets, the rise of commercial and intensive aquaculture production, and the existence of many small-to-medium sized household farms. 2 Our estimation of these three aquaculture value chains' structure is based on extensive field interviews as well as recent literature showing emerging trends in aquaculture value chains in the Global South, and Asia in particular, with the rise of commercial and increasingly intensive farms that are still characterized as small to medium sized (Belton et al., 2018;Bush et al., 2019;Samerwong et al., 2018;Trifković, 2014). In each of these sectors, producers supplying Northern markets have been the main target of Northern-led certification schemes, but various barriers exist for them to adopt relevant transnational standards (Ponte et al., 2014). ...
... 5 We recognize that the value chain structure is an important factor explaining variation in the features of Southern homegrown initiatives (Bush et al., 2019). But the three cases here have shown similar value chain structure during the time the relevant homegrown initiatives were created (see Samerwong et al., 2018;Trifković, 2014;Wang et al., 2016). For this reason, we do not consider the influence of value chain structure in the current study. ...
Article
Agricultural commodity production in the Global South is accompanied by a range of social and environmental problems ranging from pollution and deforestation to labor rights violations. Accordingly, governments and non-state actors have responded through various governance initiatives aimed at promoting sustainable commodity production. While the existing literature focuses largely on transnational standards originating in the North, we investigate “homegrown” approaches in the South by asking: what explains variation in the design and features of sustainable commodity governance led by Southern actors? By comparing sustainable aquaculture governance in Thailand, Vietnam, and China, we derive a novel conceptualization of two distinct types of homegrown governance approaches – certification standards and capability-building programs – and suggest that the choice between the two is contingent on the supply of, and demand for, sustainable commodity governance. We find decisions by Southern governments to supply governance can lock in top-down approaches and exclude potentially more impactful bottom-up approaches. We therefore argue that the material resources and normative concerns of Southern governance entrepreneurs lead to different homegrown approaches. Our findings contribute theoretical insights to the literature on transnational governance interactions and practical observations about the utility of different approaches to sustainability concerns in the Global South.
... Pangasius catfish (Pangasius bocourti) is an economically important species in Mekong Delta basin, especially in Vietnam and Thailand (Jiwyam 2010). Fish production was an approximately 1 million ton with an exported value of USD 1.85 billion (Trifković 2014). The Pangasius catfish is an omnivorous species with a protein requirement of an approximately 60% and feed formulations for this species have typically incorporated high levels of fish meal (Hung et al 2003). ...
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This study evaluated the effects of methionine on growth performance, proximate and amino acids composition of Pangasius catfish, Pangasius bocourti. Two hundred individual fish similar size (161.74±9.59 g per fish) were divided into 5 treatments. The methionine concentration in each diet analyzed by HPLC were 0.46 (Diet 1-control), 0.55 (Diet 2), 0.61 (Diet 3), 0.71 (Diet 4) and 0.81 g 100g-1 DL-methionine. The experiment was carried for 10 weeks and at the end of the feeding trial weight gain (WG), final weight (FW), specific growth rate (SGR), feed conversion ratio (FCR), nitrogen retention, protein efficiency ratio (PER), whole body proximate and amino acids composition were measured. A completely randomized design with four replications was applied. The results indicated that fish fed Diet 4 (0.71 g 100g-1 DL-methionine) showed significantly improved WG, PER and FCR compared with the control after 10 weeks of the feeding trial. However, fish fed DL-methionine diets did not affect the whole body proximate and amino acid composition of the fish (p > 0.05) and the total essential and no-essential amino acids ratio was closed to 1.0 of maximization amino acid utilization. In addition, dietary administration of 0.81 g 100g-1 DL-methionine showed the reduction on growth compared with Diet 4 (0.71 g 100g-1 L-methionine). No significant differences on SGR, nitrogen retention and survival rate were detected between DL-methionine supplemented groups and the control. Quadratic nonlinear regression analysis of SGR against intake methionine levels indicated that the estimated optimal dietary methionine for maximum growth P. bocourti was 0.63 g 100g-1 of dry diet.
... Pangasius (Pangasianodon hypophthalmus) aquaculture is one of the most important industries in the Mekong Delta of Vietnam, having grown at an average rate of 37% per year between 1997 and 2008 before stabilizing at around 1.4 million MT per year (Phan et al. 2009;De Silva & Phuong 2011;Trifkovi c 2014). The expansion of Vietnamese farmed pangasius has been driven by demand in more than 100 countries worldwide (Trifkovi c 2014). ...
Article
Mass media reports suggest that pangasius (Pangasianodon hypophthalmus) is 'full of poison' because it is able to survive in the 'heavily polluted Mekong River' and contains pesticides and veterinary treatment chemicals. However, most of these claims are not substantiated with scientific evidence. To assess the safety of pangasius consumption, a full toxicological risk assessment was performed. The results obtained were compared to toxicity claims made in a selection of media reports. Information on contaminant levels encountered in pangasius was collected from the EU Rapid Alert System for Food and Feed (RASFF) database. The toxicological risk assessments do not support any of the toxicological risks suggested in the media. Next, the maximum pangasius consumption that would be considered safe was estimated on the basis of the highest levels of the toxic contaminants reported in Vietnamese pangasius by RASFF and the safety thresholds for the contaminants. The maximum amount of the recalled fillet that could have been consumed without any adverse effects amounted to between 3.4 and 166.7 kg day-1 (lifelong for a 70 kg adult) in the case of pesticide contamination and between 0.613 and 303 kg fillet day-1 in the case of preservatives and antibiotics. It is concluded that consumption of pangasius available on the European market does not pose any concern for the health of the consumer. The analysis presented in this study illustrates that publicly available independent information could help consumers to develop their own well-informed opinion about food safety issues.
... The two most dominant aquaculture standards are the European-based Aquaculture Stewardship Council (ASC) standards and the US-based Global Aquaculture Alliance (GAA). While the number of certified farms has expanded at a phenomenal rate in recent years, this growth has been largely limited to larger-scale, vertically integrated firms (Jespersen et al., 2014;Trifković, 2014). Smallholders, who predominantly access Europe and the US on the basis of short-term price contracts rather than long-term relational contracts, have proven less able to comply with these standards because of language, a lack of resources and poor literacy (Bush et al., 2013a). ...
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... Although it was temporary, the direct supply of shrimp by larger pond operators to processing plants to ensure compliance with EU regulations has distorted the more balanced traditional arrangements and eschewed smallscale farmers. Ultimately, what is at stake is the exclusion from the market of the smallest producers and from the access to aquaculture resources for the poor, dependent gleaners (Hansen and Trifković, 2014;Khiem et al., 2010;Reardon et al., 2009;Trifković, 2014). ...
Article
International standards result from global policies formulated primarily to address issues on food safety, traceability, environmental impact as well as social accountability. As in other agro-food industries, these rules increasingly regulate aquaculture, especially since it has started to be the object of many criticisms. The standards are generally designed in a top-down way and do not always consider the local specificities of production systems. Such implementation favors the emergence of similar patterns of production and trade across different locations. Based on a case study, this paper aims to highlight the gap between the vision conveyed by expert-based, simple and replicable policies of standardization, versus the real complexity and uniqueness of local aquaculture systems. The assumption is that the lack of recognition of this complexity leads de facto to the reproduction of dominant modes of production based on standards, ignoring some local actors with a capacity for innovation, while favoring a few larger stakeholders. To reveal the gap, the study looks at some agents of an extensive aquaculture system in the Philippines and at their interaction, focusing on gleaning and trading activities. It then reveals the changes that followed the local implementation of an International food safety standard. It finally discusses (i) the links between the global and normative point of view, and the local and unique dynamics and (ii) some bridges able to reconcile both.
... Independent producers in these industries, especially in the global South, also remain the most vulnerable to market variation while continuing to make an important contribution to domestic and export aquaculture production (Belton et al., 2015; also see Belton and Thilsted, 2014;Béné et al., 2016). Hierarchical forms of coordination do appear more likely in the aquaculture industry in Southern countries where there are concerns over the stability of supply or quality/safety in export markets, or the emerging retail sector in countries like Thailand and Vietnam (Belton and Little, 2008;Goss et al., 2000;Jespersen et al., 2014;Lebel et al., 2009;Trifković, 2014). However, the poor enforcement of contract law, the disparity between contract and market prices and disease risk all play a role in the persistence of market forms of coordination (Bush and Belton, 2012;Ho, 2012). ...
Article
This paper examines how value chain coordination affects the ability of aquaculture producers to engage in eco-certification. Through a comparison of global salmon and shrimp value chains, it is argued that production risks and producer capacity are key determinants in the type of chain coordination adopted by lead firms. The results challenge global value chain governance theory by indicating that it is hierarchical (or vertically integrated) forms of coordination that are associated with high capabilities and low risk rather than market forms of coordination. It is also shown that eco-certification is more likely to be adopted in value chains with more engaged forms of coordination. This in turn means that eco-certification is a far less ‘hands off’ form of regulation than widely thought. The paper concludes that for certification to engage producers currently engaged in market forms of chain coordination new arrangements are needed that can respond to challenges of improving producer capability and production risk.
... Di Simeulue belum ada/berperan kelembagaan bisnis: koperasi, dikenal sebagai farmer owned business (Nuryati, 2005); corporate dan contract farming (Swain, Kumar & Kumar, 2012;Tuan, 2012) untuk menjamin kualitas dan kuantitas ikan yang diperlukan pasar (Trifkovic, 2014); usaha patungan/ joint venture (Oellermann, 2014). Terdapat beberapa pedagang di pulau terluar termasuk Simeulue membentuk usaha patungan untuk menambah modal, membagi resiko usaha untuk menjamin suplai ke pasar ekspor. ...
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Development of Fishing Industry in Outmost Island
... Improving farming techniques and product quality to meet higher requirements permits participation in high value-added chains (Van Beuningen and Knorringa, 2009). At the same time, some processors have tried to maintain production levels among the small farms through the process of vertical coordination and the formation of T.A.T. Nguyen and C.M. Jolly Aquaculture Reports 16 (2020) 100256 farmer clubs (Trifkovic, 2014;van Anrooy and Ha, 2014). A large number of traditional farms are less than 2.0 ha, and therefore, in order to surmount the hurdles required for certification, the government has encouraged the formation of cooperatives. ...
Article
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Increasing food safety and quality standards have imposed tremendous burden on pangasius market participants, and changed industry structure. The demand for safer pangasius products have encouraged the Vietnamese government to adopt its own practices, VietGAP, which encompasses all other international standards. The study examines how compliance with VietGAP and international standards influence pangasius value chain and serves as a catalyst in altering the industry structure. The author interviewed 41 processing and exporting firms and 91 farmers, and found vast changes in the structure and conduct of actors operating along the marketing chain. The value chain governance reflects its development and maturity and varies at various stages. The set of standards have fostered a number of changes in the pangasus industry in the past two decades, but the size and capacity of processing firms have amplified. The number of workers at each processing plant has also increased. There has been a slight decrease in the number of small-scale farms (less than 1.0 ha) and an increase in farms of more than 3.0 ha. The number of cooperatives has increased. The imposition of standards by the US and EU has encouraged Vietnamese exporters to search for other market alternatives. There has been improvement in marketing and a shift in exports to other import markets with less stringent quality requirements. Farmers, however, view the adoption of VietGAP as cost incurring with little benefits to them. Government must put policies in place to assist the small-scale farmers so they can meet the required standards. Keywords: Global, Value, Chain, Market, Structure, Governance, Food, Safety, Quality, Vietnam, Pangasius
... Preocupadas com o crescente aumento de fatores de risco, as organizações internacionais começaram a desenvolver normas e guias abrangentes, com foco gerencial, para que as empresas passem a implantar e a desenvolver sistemas de gestão nas suas estruturas, com objetivo de melhorar o ambiente de trabalho e a imagem da empresa (TRIFKOVIC, 2014). ...
... Preocupadas com o crescente aumento de fatores de risco, as organizações internacionais começaram a desenvolver normas e guias abrangentes, com foco gerencial, para que as empresas passem a implantar e a desenvolver sistemas de gestão nas suas estruturas, com objetivo de melhorar o ambiente de trabalho e a imagem da empresa (TRIFKOVIC, 2014). ...
... This study took a qualitative approach based on an exploratory case study design to unravel how boundary infrastructures emerge and evolve and how they play a role in transformative processes, following others who have taken a similar approach to study this topic (Geels and Penna, 2015;Royer et al., 2017;Spiertz and Kropff, 2011;Trifković, 2014). Case studies are suitable to approach phenomena that are not well known, have many facets, and require an in-depth perspective (Eisenhardt and Graebner, 2007;Gray, 2004). ...
Article
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Scholars have often applied the concept of boundary work and its conceptual progeny to explain how science, policy, and practice collaborate to introduce change into agrifood systems. However, previous studies focused primarily on specific boundary elements (i.e., boundary spanners, boundary organizations, and boundary objects) or particular innovation processes (in terms of scope or timescale) within broad transformative change. This study aims to deepen the understanding of long-term transformative processes in agri-food systems by looking at how boundary infrastructures influenced the evolution of the Brazilian pig production system from a setting in which it mainly produced pork lard for a domestic market to a setting of being integrated in global supply chains and following international standards. Mainly, we add to the extant literature by highlighting that boundary infrastructures influenced the longterm transformative process experienced by BPPS by establishing a space where science-policy-practice interactions legitimized particular visions and values and instilled responsibility and accountability to spur various joint actions in support of innovation. We also contribute to the extant literature by showing that boundary infrastructures evolution in BPPS was incremental, long-term, multi-site, and with intertwined leverage. Boundary infrastructures provide structuration to system transformation and are also (re)structured while transitions unfold. Since boundary infrastructures have a certain directionality and may become hegemonic and exclusionary, this requires sensitiveness to the need to reorient a hegemonic boundary infrastructure or create a parallel one. Our study deepens the understanding of how coordination unfolds in long-term transformative processes, a topic deemed of interest given current debates on promoting agri-food systems transformation. We argue that better awareness of boundary infrastructures in which science-policy-practice interactions occur can help guide the direction of innovation to support sustainability transitions in agri-food systems.
... Moreover, the white flesh, low-fat content, and good taste also make it an attracting fish food source (Thammapat et al. 2010). It is estimated that the Pangasius fish production has reached 800,000 tons per year in 2013, supplying more than 100 countries worldwide with an export value at USD 1.5 billion (Trifković 2014;Van Doan et al., 2016). Although artificial propagation has been successfully achieved in basa catfish since 1995 (Le Thanh et al. 1999), adequate seed supply is gradually becoming one of the bottlenecks for the rapid expansion culturing of this fish, due to the shortage of broodstocks or asynchrony in gamete production under captivity (Cacot et al. 2003;Kainin et al. 2014). ...
Article
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Basa catfish (Pangasius bocourti) is an indigenous species of the Lower Mekong River with increasing aquaculture value in Southeast Asia. Short-term semen storage has proven to be a valuable tool for assisted reproduction in fish, but little information is available on basa catfish. The present study was aimed at evaluating the effect of short-term semen storage on the sperm quality of basa catfish. Semen samples were kept at 4 °C for 7 days, either undiluted or diluted with Ca-F HBSS at different ratios (1:1, 1:3, and 1:6; semen:medium). Results showed that sperm quality was significantly affected by the time of chilled storage, characterized by a decline in sperm motility, viability, mitochondrial membrane potential (MMP), ATP content, and increased level of lipid peroxidation throughout the storage period. Compared with undiluted semen, diluted in Ca-F HBSS allowed better preservation of sperm quality during 7 days of chilled storage; dilution ratio at 1:1 was more effective than higher ratios (1:3 and 1:6) for prolonging sperm storability. In addition, sperm motility, viability, and ATP content decreased more rapidly than MMP, suggesting these indicators are more sensitive in detecting sperm damage of basa catfish during short-term chilled storage. These results obtained here will contribute to a better understanding of reproductive management in this species.
... Contract farming is the most widely used method of vertical coordination (Rehber, 2007). To take the advantages of adopting standards and supplying the certified products such as better market access, improving competitiveness, and increasing customer trust (Trifković, 2014), processing companies integrate farmers into the value chain through the contract to have a stable supply source of such products. To attract farmers to participate in the contract of producing such products, the company should build reasonable contracts which provide proper benefit for farmers to adopt this sustainable practice over other alternatives. ...
... Certified and rated production is skewed to major export species. Overall, 57% of salmon and trout, 17% of shrimp and prawns, 17% of pangasius and 11% of tilapia are certified (Extended Data Fig. 6), with higher levels of compliance observed in countries with a greater proportion of vertically integrated supply chains 38,195,196 . Domestic demand for sustainable products in Asian seafood markets appears to be increasing, driven by food safety concerns 197 , but considerable growth in domestic demand for sustainable seafood is needed to make aquaculture certification and rating systems effective globally 187 . ...
Article
The sustainability of aquaculture has been debated intensely since 2000, when a review on the net contribution of aquaculture to world fish supplies was published in Nature. This paper reviews the developments in global aquaculture from 1997 to 2017, incorporating all industry sub-sectors and highlighting the integration of aquaculture in the global food system. Inland aquaculture—especially in Asia—has contributed the most to global production volumes and food security. Major gains have also occurred in aquaculture feed efficiency and fish nutrition, lowering the fish-in–fish-out ratio for all fed species, although the dependence on marine ingredients persists and reliance on terrestrial ingredients has increased. The culture of both molluscs and seaweed is increasingly recognized for its ecosystem services; however, the quantification, valuation, and market development of these services remain rare. The potential for molluscs and seaweed to support global nutritional security is underexploited. Management of pathogens, parasites, and pests remains a sustainability challenge industry-wide, and the effects of climate change on aquaculture remain uncertain and difficult to validate. Pressure on the aquaculture industry to embrace comprehensive sustainability measures during this 20-year period have improved the governance, technology, siting, and management in many cases.
... Theoretically, increasing the degree of organization of agricultural production and operation, and closely integrating the production, processing, and sales of agricultural products is conducive to achieving vertical integration and thereby improving agricultural production efficiency [5]. Vertical collaboration between farmers and agricultural organizations is conducive to saving transaction costs [6], avoiding market risks [7], maintaining price stability, and ensuring factor support [8,9], and it has a positive effect on promoting farmers' income and sustainable agricultural development. ...
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Since China’s reform and opening-up in 1978, the income of rural residents has increased when compared with that of urban residents. However, the income growth rate of farmers is relatively low, and the income gap between urban and rural areas is widening. Using a sample of 1,325 large-scale farming households in Lin’an, this study constructs a theoretical path for how the level of vertical integration and an organization model affect farmers’ income levels and empirically tests the path using a mediation effect analysis model. The results indicate that organization models and vertical integration are important factors that affect farmers’ income levels. The total income and agricultural operation income of farmers who participate in agricultural operation organizations are greater than that of farmers who do not participate in an operation organization. In addition, the total income and agricultural operation income of farmers who produce and process and those who produce, process, and sell are higher than those of farmers who only produce. A farmers’ organization model has both a direct and an indirect positive influence on their income level, with the indirect positive influence coming through the mediating variable of vertical integration. The application of the organizational model can promote the growth of rural households’ total family income and agricultural income by 13.48% and 14.48% respectively, consisting of direct increases of 9.67% and 10.19%, and indirect increases of 3.81% and 4.29% through vertical integration. The results also show that access to credit, agricultural technology training, and the farmer’s education level have significant positive impacts on farming income levels. The findings suggest ways to increase farmers’ income by perfecting agricultural management organization systems, promoting agricultural industrialization, strengthening rural financial support, improving agricultural technical training for farmers, and increasing their level of education.
... The role played by private voluntary (often NGO-led) standards in setting norms for production, trade and consumption through (certified) codes of conduct, and the implications of such standards for smaller producers, feature centrally in this body of work (e.g. Anh et al., 2011a;Islam, 2008;Tran et al., 2013;Bush et al., 2013;Trifković, 2014). Other research in the GVC tradition has focused on the spatial organisation of support services, divisions of labour, and the creation, location and capture of value along transnational aquaculture supply chains (e.g. ...
Article
This paper introduces a special issue of Aquaculture that brings together the largest collection of research on aquaculture value chains compiled to date, comprising 19 individual papers and this introductory review. The introduction identifies five themes emerging from research on aquaculture value chains in the special issue, namely: multi-polarity, diversity and scale, dynamics of transformation, performance and equity, and technical and institutional innovation. Contrary to much research to date, the papers addressing these themes show how the expansion of aquaculture has resulted highly diverse configurations of production for consumption in the global South. Collectively, the papers highlight the need for greater attention to neglected value chain segments and categories of actor, modes of production, regulation, and innovation, and patterns of access to benefits. The papers synthesized also affirm the need for more rigorous and diverse future value chain research to illuminate the aquaculture sector's ongoing development, and contribute to the sustainable expansion as an increasingly important component of the global food system.
Article
Using an original dataset from the Vietnamese catfish sector, I analyze the impact of vertical coordination options, namely, contract farming and vertical integration, on farm performance, which is measured in terms of yields and revenue per hectare. The effects of vertical coordination are estimated using a maximum simulated likelihood estimator and a two-stage least square regression with instrumental variables to account for endogenous farm and household characteristics and selection on unobservable characteristics. The results show that vertically integrated farms have substantially higher yields and revenue per hectare than nonintegrated farms. The levels of gains that can be attributed to integration are large and consistent under different estimation procedures, and there is no difference between nonintegrated and contract farms in terms of farm performance.
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Vietnamese pangasius achieved global status as a highly competitive whitefish as exports to Europe, United States, Asian, and Latin American countries have grown at a rapid pace. Accelerated growth rates have met with a number of challenges that can be potentially converted to opportunities to foster further progress and expansion in exports. This study is a review of literature that examines the various economic and market issues facing the industry in the EU market. The review suggests that at the domestic level farmers must be organized alongside vertical integration to improve quality and supply consistency. Vertical integration may help reduce farm operating costs and increase farmer profit. High interest rates, fluctuating exchange rates, access to credit, lack of capital acquisition by small farmers, and product risks are key economic issues confronting the industry, whereas product quality and standards, product image, and rejection pose financial pressure on farmers, processors, and exporters. The fish, pangasius competes well in the white fish market and key product characteristics are well suited to vertical integration and horizontal differentiation in various and diverse EU markets. The industry may employ a combination of vertical and mixed product differentiation for improved product image and market share expansion in the EU white fish market.
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The projected increase in aquaculture production by 2030 will mostly occur in countries of Asia and Africa, including Bangladesh. The pangasius (Pangasianodon hypophthalmus) produced in Bangladesh, the second-largest producer globally, is mainly consumed by low-income domestic consumers and is poorly demanded in international markets. One reason for this is the yellow flesh of fish; consumers generally in mainstream international markets prefer to fish with white flesh. Reviewing secondary evidence and analyzing primary data, this article assesses the underlying reasons for the discolored pangasius flesh in Bangladesh and synthesizes strategies for avoiding discoloration to induce exports. The findings indicate that farming practices with high stocking density, infrequent water exchange, high organic matter in pond water, and the growth of carotenoid-containing cyanobacteria contribute to the discoloration of pangasius flesh. Artificial and natural pigments in feed and poor post-harvest handling of fish are also contributing factors. Furthermore, a positive correlation between water exchange, price, and yield at the farm is found, which indicates that farm-gate price and yield per hectare can increase with more frequent water exchange. The findings of this study provide strong evidence that improved aquaculture practices can solve the problem of discolored pangasius flesh and establish an export-oriented pangasius industry in Bangladesh.
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Global retail companies ("supermarkets") have an increasing influence on developing countries, through foreign investments and/or through the imposition of their private standards. The impact on developing countries and poverty is often assessed as negative. In this paper we show the opposite, based on an analysis of primary data collected to measure the impact of supermarkets on small contract farmers in Madagascar, one of the poorest countries in the world. Almost 10,000 farmers in the Highlands of Madagascar produce vegetables for supermarkets in Europe. In this global supply chain, small farmers' micro-contracts are combined with extensive farm assistance and supervision programs to fulfill complex quality requirements and phyto-sanitary standards of supermarkets. Small farmers that participate in these contracts have higher welfare, more income stability and shorter lean periods. We also find significant effects on improved technology adoption, better resource management and spillovers on the productivity of the staple crop rice. The small but emerging modern retail sector in Madagascar does not (yet) deliver these benefits as they do not (yet) request the same high standards for their supplies.
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The global food system is undergoing rapid processes of transformation and modernisation. This is causing important changes in developing‐country food supply chains, particularly in supermarket‐driven and high‐value export chains, but the welfare implications of these changes are poorly understood. This article analyses and compares the welfare effects in different horticulture export chains in sub‐Saharan Africa, disentangling different types of effects and the channels through which rural households are affected. Its main conclusion is that increased high‐value exports and the modernisation of export supply chains can bring about important positive welfare effects, which can occur in various ways through product‐ or labour‐market effects and through direct and indirect effects.
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Rapid growth in production of the farmed Vietnamese whitefish pangasius and its trade with the European Union has provoked criticism of the fish's environmental, social and safety credentials by actors including WWF and Members of the European Parliament and associated negative media coverage. This paper reviews the range of claims communicated about pangasius (identified as a form of mass mediated risk governance), in light of scientific evidence and analysis of data from the EU's Rapid Alert System for Food and Feeds food safety notification system for imported seafood. This analysis shows pangasius to be generally safe, environmentally benign and beneficial for actors along the international value chains that characterise the trade. The case is made that increasingly politicised debates in Europe around risk and uncertainty are potentially counterproductive for EU seafood security and European aquaculture industry, and that the trade in pangasius can contribute to sustainable seafood consumption in a number of ways. Transparent evidence-based assessment and systems for communicating complex issues of risk for products such as pangasius are required in order to support continuance of fair and mutually beneficial trade.
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This paper presents an analysis of GlobalGAP adoption by small-scale fruit and vegetable farmers in Thailand focusing on GlobalGAP group certification, the costs and perceived benefits of GlobalGAP adoption, and the factors influencing standard adoption. GlobalGAP is the most important private standard for producers in the Thai horticultural sector concerning access to high-value markets, especially to Europe. We find that support by donors, exporters and public-private partnerships is vital to enable small-scale farmers to adopt the standard. GlobalGAP group certification encourages the formation of new institutional arrangements between farmers, exporters and donors. In our sample only participants from a development program were successful in adopting GlobalGAP and within the program farmers were either organized in certification groups where the Quality Management System (QMS) was run by farmers themselves, by an exporter or by a donor. The results of the adoption analysis suggest that household characteristics (age, education, wealth, availability of family labor), farm characteristics (farm size, intensity of irrigation use), the number of agricultural trainings subjects attended, prior involvement in high-value supply chains, as well as exporter and donor support in terms of costs of compliance, technical advice and management of the QMS influence GlobalGAP adoption.
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The growth of intensive export-oriented Pangasius catfish production in Vietnam’s Mekong Delta is unparalleled in terms of rapidity and scale by any other agricultural sector, with production climbing from a low base to more than 1 million tons in a single decade. This paper examines the effects of this remarkable change on the rural class structure in locations where catfish farming has boomed, and analyses the role of local state-society relations in mediating outcomes resulting from the integration of local actors into the global value chain. We conclude that private economic activity is deeply embedded in informal relations with the state bureaucracy in Vietnam, with the result that the expansion of catfish aquaculture has generally acted to reproduce and entrench existing class relations rather leading to a radical reconfiguration of the rural class structure.Highlights► Export-oriented Pangasius catfish production has boomed extremely rapidly in Vietnam. ► Catfish producers are entrepreneurial individuals, not quasi-peasant cultivators. ► The ability to culture Pangasius successfully is mediated by informal access to resources. ► Pangasius culture has mainly resulted in the reproduction of pre-existing class relations.
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Market developments arising from closer vertical linkages in agri-food supply chains have given rise to a variety of issues. This paper outlines key issues and discusses possible responses by producers, their associations, and government. A vision of the future organization of agricultural production serves as a basis for discussion. The continued increase in contracting between producers and processors is accompanied by issues of contract transparency, terms, negotiation, and dispute settlement. Other ramifications include producer access to supply chains and the decline of spot markets. Furthermore, the development of agricultural biotechnology products may force a rethinking of the rationale for public investment in agricultural research and development. Evaluation of market power needs to account for efficiency gains from nonstandard forms of organization to achieve a balanced appraisal of the public interest. Agricultural economists are urged to evaluate new forms of firm and industry structure on the basis of how they work in practice rather than in comparison to an ideal form.
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Challenge 1: Multiple-Comparisons Issue Challenge 2: High-Dimensional Biological Data Challenge 3: Small-n and Large-p Problem Challenge 4: Noisy High-Throughput Biological Data Challenge 5: Integration of Multiple, Heterogeneous Biological Data Information References
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The striped catfish (Pangasianodon hypophthalmus) (Sauvage), also referred to as tra catfish or sutchi catfish, farming sector is an icon of aquaculture development in Vietnam and globally. Over a decade it has developed from a humble backyard operation to one that currently accounts for the production of over one million tonnes, employing over 180 000 rural poor, and generating an export income exceeding US$ 1.4 billion (2010). It accounts for the highest average production, ranging from 200 to 400 t ha−1 crop, ever recorded for the primary production sector. The system is integrated and incorporates seed production, fry to fingerling rearing and grow-out, and is concentrated in a few provinces in the Mekong Delta (8°33′–10°55′N, 104°30′–106°50′E), along two branches of the Mekong River. In essence, perhaps, the initial trade restrictions on catfish exports to the USA provided the impetus and then the associated developments from 2002 to 2005 of the sector to a great extent in seeking new markets. The explosion of tra catfish farming has resulted in many competitive sectors challenging this ‘tra catfish’ invasion into a globalized market. These confrontations still exist with many instances of attempts to discredit the sector and discourage international consumers. However, the Vietnamese catfish sector is resilient and has managed to withstand such pressures and continues to thrive. This paper reviews the development of catfish farming in the Mekong Delta, its current status and what is required to sustain it as a major food source and livelihood provider.
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This article analyzes the multifaceted connections linking consumers and producers in expanding North/South Fair Trade coffee networks. I develop a commodity network framework that builds on the commodity chain tradition, integrating insights from cultural studies, actor–network theory, and conventions approaches. This framework illuminates how material and ideological relations are negotiated across production and consumption arenas. In the case of Fair Trade, progressive ideas and practices related to trust, equality, and global responsibility are intertwined with traditional commercial and industrial conventions. As I demonstrate, the negotiation of these divergent conventions shortens the social distance between Fair Trade coffee consumers and producers. I conclude that by re–linking consumers and producers, commodity network analysis provides a robust entré for academic inquiry and engagement in alternative food politics.
Book
The Theory of Industrial Organization is the first primary text to treat the new industrial organization at the advanced-undergraduate and graduate level. Rigorously analytical and filled with exercises coded to indicate level of difficulty, it provides a unified and modern treatment of the field with accessible models that are simplified to highlight robust economic ideas while working at an intuitive level. To aid students at different levels, each chapter is divided into a main text and supplementary section containing more advanced material. Each chapter opens with elementary models and builds on this base to incorporate current research in a coherent synthesis. Tirole begins with a background discussion of the theory of the firm. In part I he develops the modern theory of monopoly, addressing single product and multi product pricing, static and intertemporal price discrimination, quality choice, reputation, and vertical restraints. In part II, Tirole takes up strategic interaction between firms, starting with a novel treatment of the Bertrand-Cournot interdependent pricing problem. He studies how capacity constraints, repeated interaction, product positioning, advertising, and asymmetric information affect competition or tacit collusion. He then develops topics having to do with long term competition, including barriers to entry, contestability, exit, and research and development. He concludes with a "game theory user's manual" and a section of review exercises.
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This paper employs firm level benefit-cost and supply chain analyses to explore the reasons why a majority of Philippine seafood processing firms discontinued EU HACCP between 2004 and 2005. Results indicate that only 38% of firms remained certified, as they gained significantly from retention of EU markets, gained access to US markets, captured new buyers, and reduced product wastage. However, 62% of the initially certified firms abandoned certification, as they did not realize most of the anticipated benefits from certification and continuing certification was not economically viable. Delisting by some processors led to profit losses among their raw fish and input suppliers amounting to $4-6 million per year, representing approximately 6-9% of the value of Philippine seafood exports to the EU and mainly affecting small aquaculture fish suppliers.
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Summary Global retail companies ("supermarkets") have an increasing influence on developing countries, through foreign investments and/or through the imposition of their private standards. The impact on developing countries and poverty is often assessed as negative. In this paper we show the opposite, based on an analysis of primary data collected to measure the impact of supermarkets on small contract farmers in Madagascar, one of the poorest countries in the world. Almost 10,000 farmers in the Highlands of Madagascar produce vegetables for supermarkets in Europe. In this global supply chain, small farmers' micro-contracts are combined with intensive farm assistance and supervision programs to fulfill complex quality requirements and phyto-sanitary standards of supermarkets. Small farmers that participate in these contracts have higher welfare, more income stability and shorter lean periods. We also find significant effects on improved technology adoption, better resource management and spillovers on the productivity of the staple crop rice. The small but emerging modern retail sector in Madagascar does not (yet) deliver these benefits as they do not (yet) request the same high standards for their supplies.
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This paper investigates the structure, function and wealth distribution within the Pangasius hypophthalmus and Henicorhynchus spp./Labiobarbus spp. value chains in the Mekong Delta of Vietnam. The analysis is driven by key questions relating to the form and function of value chains, their contribution to the livelihoods of farmers and fishers, the effectiveness of government policy and the potential for value chain governance mechanisms, such as contracts and certification, to steer towards sustainable production. The results indicate that actors in the high value Pangasius hypopthalmus export chain have a higher potential income, but face considerably higher economic vulnerability from global markets. Alternatively, Henichorhychus/Labiobarbus spp. fishers are severely constrained in their ability to negotiate higher prices for their fish but appear to be less vulnerable to economic and environmental change. The paper concludes that for value chain governance to improve the livelihoods of fishers and farmers in both high and low value chains, new arrangements are needed that better accommodate customary institutions and informal market relations. KeywordsMekong-Vietnam-Fisheries-Value chains-Governance-Sustainability
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This article explores the motivations behind the decision of small-scale producers to grow nontraditional vegetables under contract for export. Based on a survey of small-scale producers in Zimbabwe, four factors are identified as motivating contracting, namely, market uncertainty, indirect benefits (e.g., knowledge acquisition), income benefits, and intangible benefits. Respondents are clustered according to the relative importance of these factors in their contracting decision. Four clusters are identified and related to the characteristics of these farmers including size of the farm, amount of land devoted to export crops, access to alternative markets, and the proportion of family income derived from export crops. The results suggest that there are systematic differences between farmers in their decisions to contract which needs to be recognized in contract design and management.
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This article discusses a number of issues that are influencing the evolution of food safety regulation in developed and, to a lesser extent, developing countries. Whilst not definitive, it aims to highlight those factors which are considered crucial to an understanding of contemporary food safety controls in both the public and private spheres. These issues include criteria applied to assess the need/justification for food safety regulation, relationships between public and private food safety control systems, alternative forms that public food safety regulation can take, strategic responses to food safety regulation, and the trade implications of national food safety controls. The article serves as an introduction to these issues, which are discussed at greater length in the other papers that make up this special issue of Food Policy.
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This paper examines the rationale, practice, and problems of contract farming in vegetable crops in the agriculturally developed Indian Punjab which has faced the problem of sustainability of growth since the early 1980s. It is found that agribusiness firms deal with relatively large producers and their contracts, which are biased against the farmer, perpetuate the existing problems of the farm sector such as high chemical input intensity, and social differentiation. Contracting has however, led to higher farm incomes and more employment for labor. There seems to be an inherent contradiction in the objectives of the contracting parties and those of the local economy.
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Contract farming (CF) is potentially beneficial to small farmers, providing services not readily available by other means. In reality, growers frequently face serious problems in dealing with firms, indicating the need for intervention by government or by farmers' organizations. However, the hybrid structure and multiple objectives of CF schemes make it difficult to organize farmers or to design effective policy interventions. This article describes some of the most frequent problems, points out trade-offs among competing welfare goals and cautions against the use of CF as a simple model for agricultural development.
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Aquaculture of catfish, Pangasianodon hypophthalmus (Sauvage), locally known as “ca tra”, and commonly referred to as striped catfish, river catfish and sutchi catfish, in Vietnam, having recorded a production of 683,000 tonnes in 2007, valued at about 645 million US$ is one of the largest single species based farming system, restricted to a small geographical area, in the world. The product is almost totally exported to over 100 countries as frozen fillets, as an acceptable alternative to white fish. Catfish is farmed mostly in earthen ponds, up to 4 m deep, in nine provinces in the Mekong Delta in South Vietnam. The results of the grow-out system of catfish farming in the Mekong Delta from a survey of 89 farms are presented. The farm size ranged from 0.2 to 30 ha with a mean of 4.09 ha. The frequency distribution of the yield in tonne/ha/crop and tonne/ML/crop corresponded to a normal distribution curve, where 75% of the farms yielded 300 tonnes/ha/crop or more. It was found that the yield per crop was significantly correlated (p < 0.05) to stocking density, pond depth and volume but not to pond surface area. Yields per crop was significantly different (p < 0.05) between upper and lower provinces of the Mekong Delta and water source (river versus channels), amongst others. It was evident that diseases and/or symptoms were observed to occur mostly in accordance with the onset of rains. In this paper the history of the catfish farming in the Mekong Delta is briefly traced, and current harvesting and marketing procedures as well as pertinent social elements of the farming community are dealt with.
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This paper reports the results of a study of the costs and benefits associated with the implementation and operation of HACCP in the UK dairy processing sector. The results suggest that the major cost of implementing and operating HACCP in dairy processing plants is staff time required to document the system. The costs of capital investment and external technical expertise are less important. The most important benefit is the enhanced ability to retain existing customers. The results have implications for the adoption of HACCP in the UK dairy processing sector as well as the food industry as a whole.
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In the debate on trade and poverty it is argued that standards act as trade barriers and cause marginalization of the poor. This paper quantifies income and poverty effects of high-standards trade and integrates labor market effects, by using company and household survey data from the vegetable export chain in Senegal. We find that exports grew sharply despite increasing standards, contributing importantly to rural incomes and poverty reduction. Tightening standards induced a shift from smallholder contract farming to integrated estate production, altering the mechanism through which poor households benefit: through labor markets instead of product markets.
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The paper examines the main economic and institutional incentives which have driven major OECD food retailers in their use of private voluntary standards and discusses their growing role in shaping the agri-food system. It is based on interviews with quality and safety directors of major OECD retailers and a brief survey of retailers’ actual buyer practices. Though not all retailers are included, these firms account for over 70% of retail food sales in OECD countries. We find that the growing voice of civil society, changing legal and institutional frameworks, increased market concentration and buying power as well as their integration with financial markets has provided the setting for development of private standards. While food safety and quality standards are seen as key to maintaining and improving reputation as well as against legal liabilities, additional standards such as labour, environmental and animal welfare are also gaining ground as strategies for customer loyalty and market shares. The grass-roots retailer move in the harmonization of food safety standards is seen as an initial step towards a global approach to managing the food system, with harmonization of other standards likely in the future. Given their buyer power, these developments can be viewed as a way of governing the food system and will be important for both OECD and non-OECD food and agricultural sector evolution in the coming years.
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This paper provides a brief introduction to the evolution and nature of private food safety and quality standards, highlighting the resultant impacts on the structure and modus operandi of supply chains for agricultural and food products and the challenges posed for processes of agricultural development. It serves as an introduction to a series of papers that provide a comprehensive overview of the current state of knowledge regarding private food safety and quality standards in both an industrialised and developing country context. In so doing, it aims to provide a catalyst for further research on this rapidly evolving field of inquiry.
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Drawing on a political economy of food quality, this paper investigates the main sources of uncertainty over the environmental sustainability of Vietnamese pangasius catfish in European markets and how retailers subsequently respond to these uncertainties. Based on media survey and interviews with supermarket retailers across Europe between 2008 and 2010, the analysis focuses on the claims and counterclaims over the sustainability of pangasius aquaculture, how retailers have dealt with the uncertainty these claims have engendered about the fish, and what effect this uncertainty has had on the potential of marketing ‘sustainable pangasius’ in European supermarkets. The paper concludes that successful claims around new food qualities like sustainability by retailers are dependent on the ability of regulatory networks to overcome any perceived illegitimacy of imported products in the face of continuing uncertainty and the wider politics of market protectionism
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What is the impact of participation in agricultural value chains on the welfare of smallholders? Contract farming, wherein a processing firm delegates its production of agricultural commodities to growers, is often viewed as a means of increasing smallholder welfare in developing countries. Because the problem posed by the nonrandom participation of grower smallholders in contract farming has so far not been dealt with convincingly, however, whether participation in contract farming actually increases smallholder welfare is still up for debate. This paper uses an experimentally derived nonparametric measure of willingness to pay to enter contract farming to control for actual participation in contract farming. Using data from Madagascar, results indicate that participation in contract farming is associated with a 10- to 16-percent increase in income; a 15-percent decrease in income volatility; a two-month decrease in the duration of the hungry season; and a 31-percent increase in the likelihood of receiving a formal loan.
Article
The role of inter-enterprise relationships in European pig meat, beef and cereals chains is analysed. Using survey data from 1,442 farmers, processors and retailers in six countries, the empirical relevance of several factors potentially influencing the choice of contract types and the sustainability of relationships is tested. In particular, the significance of quality orientation and the use of traceability schemes are explored. Market, industry and enterprise-specific characteristics are found to influence contract type choice while dyadic, firm-level factors appear to affect relationship sustainability. The results carry implications for agribusiness management, particularly regarding food safety standards, as well as policy support.