Agri-Food Commodity Chains and Globalising Networks

Richard Le Heron, Christina Stringer

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138252158
• eBook ISBN:
  9781317183518
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

Within the international agri-food community at least four theoretical targets are attracting increasing attention. They are: (1) the established notions of networks and commodity chains that are being revisited by way of critical engagement informed by the insights of in-depth empirical work, (2) the metrics of calculation and institutional embedding that underpin the rise and functionality of governance technologies, (3) the place of regional networking in creating conditions that make possible agri-food producer participation in local provisioning and supply, and (4) the geo-historical dimensions of interconnection and interdependency in the agri-food sphere. This volume brings together an interdisciplinary team of anthropologists, economists, business and management academics and geographers to examine a wide range of case studies illustrating various agri-food commodity chains and networks around the world and to discuss how they link globally.

Chapter 1
Introduction: Mapping the Concept of Globalising Networks

Christina Stringer and Richard Le Heron

Although we often hear a great deal about globalising networks in the current economic geography and agri-food literatures, the intellectual work of globalising agri-food networks seems to have somehow slipped below the horizon. This book explores the globalising connectivities implied in the notion of globalising networks with a view to drawing out some of the complexities and contradictions evident when the conception is harnessed with that of commodity chain. By opening up space to engage with the constitutive processes that produce networks that might be labelled globalising the collection prioritises an examination of what it has meant to produce food and fibre in emerging capitalist societies. Instead of considering globalising networks as an exclusively contemporary phenomenon, the collection illustrates from research into both the past and present agri-food commodity chains some intriguingly similar dimensions in the constitution of responses to the challenges of securing value circulation and exchange across great and short distances.

We approach the idea of globalising networks first by briefly outlining a genealogy of commodity chains and networking. By the early 1980s there was much debate internationally about uneven development and uneven exchange, a great deal springing from the structural positioning work of the world systems writers who divided the world into a capitalist core and periphery, with ambiguous cases assigned to the semi-periphery. Despite the inadequacies of the functionalist imaginary that underpinned this schema, it does highlight a key world-level insight, that conditions of production and consumption are uneven. In this literature the paucity of diagrams summarising capital circulation perhaps constrained the imagination of researchers. Whatever the reason the notion of focusing on commodity circuits had little appeal and was for the most part only dimly perceived. In this context it is hardly surprising that a conceptual and methodological strategy – the depiction of the chain of links in commodity circulation – should be enunciated. Importantly it involved a metaphor that was visual and which readily revealed connectivity. Whether the genesis of the idea emerged from the Marxist political economy of agriculture or the world systems communities the intention was, as Wallerstein (2000, 221) remarks, ‘to underlie a basic process of capitalism: that is it involved linked (emphasis added) production processes that had always crossed multiple frontiers and that had always contained within them multiple modes of controlling labour’. It was not until the mid-nineties, however, that agri-food commodity chain analyses had been mainstreamed.

The other trajectory of interest is that of the network. This idea, surfacing prominently in the 1990s in industrial and broader economic geography, had appeal to those revisiting the grounds for competitiveness, regionally, nationally and internationally. The apparent successes of new industrial districts in California and North Italy for example attracted scholarly scrutiny in the late 1980s, with the place of networks, a concept soon to be positioned with ideas such as social capital, trust, cooperation and so on, deriving much of its attraction from initial attachment to proximity rather than connection. Again, the infusion of networks and networking concepts into agri-food circles proceeded slowly.

A new generation of researchers had begun to take seriously some of the challenges presented by post-structural, feminist and sociology of science writers. Agri-food research practice began to unpack the very categories upon which both the commodity chain and network ideas rested. The first conceptual point we make is that a succession of important steps of a theoretical kind began to emerge. These steps include: a widening of the scope of networks and networking through visioning both additional horizontal and vertical dimensions of networks; the variety of theoretical approaches that could be brought to bear upon understandings of commodity chains and networks and networking was added to; attempts were made to integrate alternative approaches in order to better comprehend the contours of use and exchange value production and value circulation; different value propositions were used as the point of entry into analyses and investigation; and, the spatiality of investigation was extended with increasingly sophisticated studies of geographic scaling and politics.

In the foregoing discussion we deliberately chose not to problematise the notion of commodity chain. Here, as our second conceptual intervention, we recognise the plurality of conceptualisations available. In the academic literature the earlier concept, commodity chain, has been matched by an astonishing rollout of two parallel concepts, one very instrumental in character and which is probably very widely understood, that of supply chain, and the other, value chain, which may seem to promise a lot, but is in fact under used and poorly understood outside purely business circles. The commonality of scope, in so far as each is an attempt from different starting positions to explore different though often overlapping dimensions and concerns (from usually sharply divergent political and ethical positions) has led to much confusion over what is being discussed, and worse, frequent conflation of the terms when using only one. A Google concept search shows that the commodity chain idea per se has little traction, it is an academic notion favoured by a small community of scholars. Next and considerably more widely used is the value chain notion, which while integral to business models, is clearly because of its infancy still limited in application to within the business community. By far the most extensively developed framework is that of the supply chain; anchored in physical flows, responsive to logistical effort, amenable to governance on sophisticated levels using a variety of at-a-distance systems, it has become a distinctive unit for organising competition especially in the international arena. We distinguish amongst the three positions because although the contributors overwhelmingly adopt some sort of commodity chain approach, several set their research in the realm of the value chain and supply chain literatures.

The overarching emphasis of commodity chain analysis, as derived from the traditions mentioned, is to enquire into the conditions under which value is created, realised and reinvested in an increasingly interconnected world, with the intention of revealing the implications for labour and bio-physical processes in different contexts. This is in effect a social or political economy view, concerned mainly with establishing how actors are involved in a commodity’s complex movements, evaluations and valuations, with regard to intersecting ecologies. In contrast, the central proposition of the value chain school of thought is centred more on the performance of individual actors. The interest is in finding ways to generate and appropriate, for the actor, value that is circulating in the commodity and cultural circuits. The rise of supply chain management as a specific area of business research, usually without explicit consideration of power relations amongst business entities, indicates the utility of the concept for business and for interrelated businesses. It is around points such as these that divergence with commodity chain thinking begins.

The third dimension to our conceptual mapping is the manner in which this book and the authors deploy globalising networks in research on agri-food commodity chains. They do this in four distinctive ways and thus Agri-Food Commodity Chains and Globalising Networks contributes to contemporary frontiers in agri-food research. First, the authors throughout the book acknowledge the contributions of Australasian agri-food researchers to the study of the circulation of value and highlight the networks of production and consumption, trade and finance and their interrelations and interactions. This reflects the strong tradition of new political economy within agri-food research. But it is also a methodological statement, in that to name globalising networks in this manner is potentially constitutive of understandings that shed light on capitalist accumulation processes. Second, the authors invoke an organisational focus in order to explore the development of the metrics of calculation and institutional embedding that underpin the rise and functionality of governance technologies directed at assisting value circulation. This leads into dimensions of competition under new rules of economic and cultural standardisation in production and consumption. Third, while the place of regional networking in creating conditions for possible agri-food actor participation in local provisioning or far distant supply had received attention, empirical evidence about such developments is still sparse, undoubtedly affected by the limited pool of researchers and funding. Fourth, the inexplicable bias against historically grounded research in agri-food research, and in economic geography more generally, has led to only a handful of studies informed by theoretical developments on commodity and cultural circuits and still fewer taking up the challenge of understanding the changes in networks and practices of networking. That this prevents meaningful dialogue over the emergence of long run trajectories around agri-food activities is an understatement. Agri-Food Commodity Chains and Globalising Networks makes specific contributions to these four contemporary frontiers, drawing on new understandings that have come from a number of longstanding and major research programmes undertaken in a range of different countries. The authors’ contributions reflect their distinct regional perspective as they explore new initiatives and responses to developments, whether internally or externally driven, within agri-food chains and globalising networks. The book is organised into four sections:

Section 1: Globalising Networks and Agri-Food Chains

This section consists of three chapters that provide lens upon the formation of value through globalising networks. In particular, the authors examine ways in which the case study actors are responding to globalisation pressures and what this might mean for actors in developing countries seeking to participate more fully in globalising networks.

In Chapter 2, Charles Mather contends that the global value chain concept of ‘upgrading’ has particular relevance for developing countries. He argues that the ability to upgrade arguably determines whether firms, regions and countries are successfully inserted into the globalising economy. The chapter focuses on South Africa’s squid industry, which has since the late 1980s established itself as a reliable supplier of high value fish products to Spanish and Italian markets. The chapter describes the process of upgrading squid production from the late 1980s and concludes that in contrast to early upgrading initiatives more recent initiatives have not lead to significant real benefits.

From a very different starting point, Andreas Stamm explores the way the Millennium Summit of 2000 commits the international community to a strategy of accelerated poverty reduction. One of the promising sectors within a strategy of pro-poor growth is agribusiness as it allows developing countries to capitalise on their natural production advantages and through its backward linkages directly affects the lives of the rural poor. Based on empirical research in Sri Lanka and taking the value chain approach as conceptual framework the chapter examines, under which conditions agribusiness based growth actually leads to an accelerated reduction of poverty. While the evidence assembled in the chapter is still quite general, the importance of originating networking and related power asymmetries for farmers in Sri Lanka remains clear.

The shift to fewer and larger upstream suppliers has been a prominent theme in many recent analyses of value chain restructuring, especially in agri-food sectors. In developing countries, these tendencies are usually played out in the context of smallholder exclusion, with a corresponding shift of production to larger enterprises. However, in some instances powerful counter-currents can be observed. In the South Indian tea plantation sector, larger plantation enterprises have faced crisis due to low world prices, rigid management structures and high costs of production. In this environment, small tea growers appear to hold a substantial competitive advantage vis-à-vis larger estates, resulting in a new phase of restructuring based around innovative alignments between centralised processing units and smallholders. The chapter addresses ongoing debates on the relative efficiencies of localised modes of agricultural production within a changing global regulatory framework. Reviewing these issues in their broader terms, Neilson and Pritchard contend that the South Indian experience emphasises the importance of thinking about value chain issues in terms of the institutional histories of how particular production complexes have evolved in specific regional economies. It highlights the role of geography in creating mosaics of difference in the ways production systems are structured.

Section 2: Governance and Globalising Networks

The chapters that make up the second section of the book examine developments within globalising agri-food networks from a governance perspective. The authors examine different regulatory and governance structures ranging from the emergence of calculative practices to forms of industry led self-regulation and development.

In Chapter 5, Christopher Rosin approaches the yerba mate (Ilex paraguariensis) commodity chain in Brazil and Paraguay within the MERCOSUR customs union from a convention theory perspective. Undertaking a series of interviews with farmers, he assesses the role of producers and their capacity to influence the emerging conventions of exchange. Factors such as relative economic and social power and existing market conditions are limitations on producer influence. Despite such constraints, producers are shown to affect the development of conventions through their willingness to produce yerba mate or to adopt alternative crops. The analysis demonstrates the insights of convention theory to the emergent nature of commodity chains.

Chapter 6 examines the emergence of audit systems certifying ‘good agricultural practice’ within the global agri-food system. These audits ensure consumers of food produced in a sustainable (environmentally and socially) manner without reference to organic practices. Using data from 36 New Zealand kiwifruit orchards, Christopher Rosin, Hugh Campbell and Lesley Hunt provide a detailed examination of the impact of the Eurep-GAP audit on farm management. As much as good practice, orchardists associate the audit with increased paperwork – an irritation affecting relations with other commodity chain participants. They conclude that, while Eurep-GAP can promote improved sustainability, it also impacts the power relations of New Zealand’s agriculture.

An example of industry led self-regulation is illustrated in Chapter 7. Paula Blackett and Richard Le Heron discuss the formulation and implementation of an industry regulated Accord in 2003. The Accord was designed to facilitate improved management of the environmental externalities of farming practices on New Zealand dairy farms. The key rationale behind the Clean Streams Accord was to afford the ‘clean green’ image of New Zealand dairy farming and food production some protection in the market place. The authors explore some of the key drivers behind the Accord and comment on the current institutional arrangements and challenges around managing environmental impacts of dairy farming practices and in particular dairy shed effluent discharges to waterways.

Eugene Rees, in Chapter 8, explores how New Zealand seafood enterprises have evolved as they simultaneously negotiate local regulations that constrain resource extraction as well as the globalising world economy. Conventional arguments for the institution of quota management and transferable quota propose that re-regulation leads to efficiency, and by implication, profitability gains. While this literature is replete with discussions concerning the nature of the efficiency gains, there is little discussion concerning the form that fishing enterprises will take or how they will go about instituting efficiencies and profitability gains. Moreover, changes in fisheries and aqua-commodity production which have been made possible by a quota management system have passed largely unheralded. The discussion moves beyond equity debates to examine how firms have gone about securing growth when operating in the New Zealand fishing sector by reconfiguring their activities throughout an increasingly global commodity chain.

In Chapter 9, Nicolas Lewis uses the case of the wine industry in New Zealand to examine the properties of ‘industry’ as an economic space of governance – a space that has meaning as an identity, a spatial imaginary, and a subject as well as an object of calculation and governance. He links arguments about the significance of industry scale governance to notions of industry as identity and neo-liberal rationalities of governing at a distance. Furthermore, he challenges economic geographers to recognise industry as more than an essential economic category, and to recognise ‘spaces of government’ such as industry as an alternative language to ‘scale’ for identifying meaningful social collectivities for analysing contemporary political economy.

Section 3: New Agri-Food Configurations from Networking in Regional Contexts

This section brings together researchers who examine levels of embeddedness between local and regional networks. They examine ways in which growers and farmers can, for example, overcome challenges through the establishment of learning networks and clusters in order to facilitate innovation and differentiation.

Despite continued interest in global commodity chains, the globalisation of agro-food systems is uneven and mediated by local relationships. In Chapter 10, Brian Ilbery and Damian Maye examine the development of ‘local’ foods in the ‘lagging’ region of the Scottish-English borders. Using institutional food maps, an important boundary effect is identified, with different sets of institutional processes operating either side of this international border. However, such a boundary effect is not apparent among specialist food businesses. The empirical findings thus suggest that there is a mismatch between the activities of food-related institutions in the Scottish-English borders and other key players in the local food economy.

In Chapter 11, the regional focus shifts to the Pyrzyce (West-Poland) and Elbe-Elster (Eastern Germany) rural districts. In this chapter, Elmar Kulke illustrates that both regions posses a regional agrarian cluster which reaches beyond the local scale and substantially affects the regional economy. The clusters are based on material connections and immaterial co-operations and information transfer. Remarkably, in these immaterial flows, local forums are of great importance. The results illustrate that the proximity of the actors alone is not the determining factor for immaterial networks and that supra-regional linkages play a key role. It is evident that not every farm which has material connections in a region also possesses immaterial networks. The cluster analysis shows that not only large traditional corporations but also younger individual enterprises with considerable immaterial linkages can achieve competitiveness and good power positions. Ideally the best practice for farms is therefore to be embedded in local and regional, as well as in supra-regional immaterial networks, which are based on equality and reciprocity.

In Chapter 12, Mairi Jay examines how dairy farmers in New Zealand are responding to competing pressures around agricultural sustainability and what type of new configuration might emerge. Farmers in New Zealand face pressure to maximise low-cost forms of production in the face of global ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• List of Contributors
• 1 Introduction: Mapping the Concept of Globalising Networks
• 2 Upgrading in South Africa’s Squid Value Chain
• 3 Agribusiness and Poverty Reduction: What Can be Learned from the Value Chain Approach?
• 4 Big is Not Always Better: Global Value Chain Restructuring and the Crisis in South Indian Tea Estates
• 5 Contesting the Rules of Exchange: Changing Conventions of Procurement in the MERCOSUR Yerba Mate Commodity Chain
• 6 Audit Me This! Kiwifruit Producer Uptake of the EurepGAP Audit System in New Zealand
• 7 Maintaining the ‘Clean Green’ Image: Governance of On-Farm Environmental Practices in the New Zealand Dairy Industry
• 8 A Sustainable Fisheries Oasis? Strategy and Performance in the New Zealand Seafood Sector
• 9 Constructing Economic Objects of Governance: The New Zealand Wine Industry
• 10 Placing Local Food in a Cross-Border Setting
• 11 Agrarian Clusters and Chains in Rural Areas of Germany and Poland
• 12 Farmer Innovations in Environmental Management: New Approaches to Agricultural Sustainability?
• 13 The Region as Organisation: Differentiation and Collectivity in Bordeaux, Napa, and Chianti Classico
• 14 Creating Trust Through Branding: The Case of Northwest Ohio’s Greenhouse Cluster
• 15 Growing a Global Resource-Based Company from New Zealand: The Case of Dairy Giant Fonterra
• 16 The Commodity Chain at the Periphery: The Spar Trade of Northern New Zealand in the Early 19th Century
• 17 Akaroa Cocksfoot: Examining the Supply Chain of a Defunct New Zealand Agricultural Export
• 18 Biotic Exchange in an Imperial World: Developments in the Grass Seed Trade
• Index