Market and Trade Policy for Staple Foods in Eastern and Southern Africa
Edited by Alexander Sarris and Jamie Morrison
Chapter 4: Governance and Surplus Distribution in Commodity Value Chains in Africa
4. Governance and surplus distribution in commodity value chains in Africa Johan F.M. Swinnen, Anneleen Vandeplas and Miet Maertens1 1 INTRODUCTION Recent policy discussions have emphasized the importance of the staple food crop sector in Sub-Saharan Africa in increasing farm productivity to achieve food security and to alleviate poverty (see, for example, the Summit on Food Security in Africa in Abuja, Nigeria in December 2006). A crucial issue in the debate is how the staple food sector can generate surpluses and how to ensure an equitable distribution of these surpluses. In this chapter, it is argued that the governance of food markets and commodity chains is a crucial element for efficiency and distributional effects, including for growth and food security – and that the chain governance itself is endogenous in an environment of weak contract enforcement and imperfect markets, and importantly depends on the value in the chain (and on other commodity characteristics). Supply chain governance, or the way economic transactions in supply chains are coordinated (Gereffi et al., 2005), is crucial in determining how economic surpluses are generated and distributed along the chain. There is large variation in the way in which food and agricultural commodity chains are governed, with the involvement of the public sector and/or different private agents and varying levels of vertical coordination between those actors. It has been argued, and empirically demonstrated, that the degree of vertical coordination in supply chains indeed influences economic outcomes, in particular efficiency and equity (Swinnen and Maertens, 2007). To show...
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