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The role of institutions on modern agricultural value chains

dc.contributor.advisorvon Cramon-Taubadel, Stephan Prof. Dr.
dc.contributor.authorLin, Jessie
dc.titleThe role of institutions on modern agricultural value chainsde
dc.contributor.refereeSexton, Richard Prof.
dc.description.abstractengThere has been an increase in the integration of global agricultural value chains in recent decades. This trend has created opportunities for smallholder farmers and agrifood industries in developing countries through forms of international exchange. At the same time, demographic changes and rising incomes across the developing world have affected the food security status of citizens in developing countries. Institutions have a prominent role to play in how integrated countries and smallholder farmers are in global value chains. This dissertation seeks to answer these questions first by studying coconut value chains. The first paper does this by first on a macro level by analyzing the role of institutions on the trade of coconut products. Second, I study a case study in Fiji qualitatively to understand the discourses and perceptions of farmers involved in coconut farming. Finally, the third paper takes a theoretical model to assess the effects of a transition of rural smallholder farming to selling or renting landholdings and supplying labor to larger commercial farms on the food security and economic welfare of in-country urban consumers. In line with the two previous papers, it emphasizes the importance of institutions since positive and negative institutional forces within the home country play a part in the persistence of smallholder farming. Chapter 2 presents the first paper, titled “The role of institutional quality on the performance in the export of coconut products.” It aimed to answer three research questions. First, we are interested in how the overall institutional environment in exporting countries affects the bilateral trade of coconut products. Second, we look into whether improvements in the exporters’ individual indicator scores lead to an increase in trade with consideration to the exporters’ and importers’ overall institutional setting. Lastly, we investigate the effects of institutional similarities for coconut trade and its different compositions of value addition. To address these questions, we utilized structural gravity models to measure how institutional quality affects the trade performance of the top 26 coconut producing countries to the top 15 importing economies over the span of 20 years. The results suggest that increased government effectiveness enhances trade of high-value products, whereas better voice and accountability scores decrease the trade of coconut products in both categories of value addition. The second paper, presented in Chapter 3, investigates the coconut value chain in Fiji. It is titled “Fiji’s participation in the global coconut value chain: Opportunities and constraints.” Field research was conducted in the islands of Fiji. I use predominately a qualitative approach to understand the rhetoric and discourses of each stakeholder group involved in the coconut sector and their perceptions of the challenges and opportunities. This chapter then follows the first paper and looks into the effect of institutional indicators on the performance in the export of coconut products from Fiji. The empirical results show that increased scores in the government's effectiveness and voice and accountability indicators enhance coconut exports from Fiji, suggesting that domestic institutions play an important role. Interviews with key actors reveal that communications among each stakeholder group are fragmented. The main institutional actors and the producers have different perceptions of the industry’s challenges, thus resulting in different ideas on how to address the issues. Chapter 4 of this dissertation is titled “Modern agricultural value chains and food security of urban consumers in developing countries.” The work is a collaboration stemmed from my research stay at the University of California Davis. The study builds on previous research (Ma & Sexton, forthcoming) that assessed the future of smallholder farming systems in modern agricultural value chains. Their findings show that smallholders gain higher incomes and larger production outputs when they can supply inputs and labor to large commercial farms compared to working on own small farms across a range of plausible market settings. We address the unanswered question of how this improved productivity effect can affect the welfare and food security of domestic smallholders and urban consumers. We obtain price elasticities of demand for staple food commodities in developing countries from 15 peer-reviewed articles. Based on these figures, we embed a demand-side framework into the Ma-Sexton model to study the impacts of land consolidation and the advent of commercial farming systems on the dietary diversity of home country urban consumers. Some general conclusions and implications can be drawn from the results of these chapters. First, we confirm that institutions matter, but not merely as one entity. Different aspects of institutional quality affect integration differently. When assessing coconut producing countries collectively, the findings of our first paper suggest that government effectiveness matters the most when enhancing trade of coconut products of varying degrees of value edition, while the indicator, voice and accountability, had contrasting effects. However, chapter 3 demonstrates that for Fiji, a small island economy, both government effectiveness and voice and accountability increase Fiji’s export of coconut products. This implies that the heterogeneities of each country play a role and must be taken into consideration for future research. Each country has its specific institutional set-up and enabling environment. The integration of each country will differ albeit to a lesser or greater degree than another. Findings from the last paper suggest that urban consumers, especially the poorer households, can benefit when prices of staple crops increase. Their overall welfare and diet improve as a result. Smallholders also see an improvement in welfare as the utility in consumption and leisure increases. Though governments and international donors have an egalitarian and development in mind when implementing policies and strategies that support smallholder farming, our findings suggest that there is a large welfare gain if policies enable smallholders to supply land and labor to commercial
dc.contributor.coRefereeWollni, Meike Prof. Dr.
dc.subject.engAgricultural value chainsde
dc.subject.engInternational tradede
dc.subject.engGlobal Value Chainsde
dc.affiliation.instituteFakultät für Agrarwissenschaftende
dc.subject.gokfullLand- und Forstwirtschaft (PPN621302791)de

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