- Research Handbooks in Business and Management series
Edited by Paula Kyrö
Chapter 15: Market-driven capabilities and sustainability of alliances by agricultural small and medium-sized enterprises
The role of small agricultural enterprises and their effects on sustainable rural development have been studied both in developing countries (Ruben et al., 2006; Latouche, 2007) and in developed ones (McCullough et al., 2008; Tasch, 2009). Agricultural enterprises in developed countries face problems driving them towards a more intense, and often less sustainable, way of growing crops. Maybe the most relevant problem derives from the fact that modern big food retailers demand a stable and large supply of fresh, raw and processed materials, ensuring year-round availability (Reardon et al., 2008). When small farmers cannot warrant a large and continuous stream of products, they have to sell their crops to raw commodities’ brokers (Dolan and Humphrey, 2002) that further sell them to industrial processors or to distributors (Maloni and Brown, 2006). In fact, farmers are players in a more complex supply chain with a really small negotiation power (King and Phumpiu, 1996). Farmers use alliances and agreements to increase their negotiation power in order to keep a competitive position in the market, but it is not so obvious what are the effects of these strategies on sustainability of agricultural practices. To deepen our understanding of the sustainability of different models of alliances this chapter adopts the bioeconomy model of sustainability (Passet, 1996) to evaluate how the different agricultural alliances follow its hierarchical order of economical, environmental and social dimensions, and what kind of capabilities are needed to create and sustain a competitive advantage in these alliances.
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