Constraints and Challenges in Constraints and Challenges in Governance and Channel Choice Governance and Channel Choice

in Tropical in Tropical Agri-FoodAgri-Food Chains: Chains: the the Case of Pineapple Supply Chains Case of Pineapple Supply Chains

in Beninin Benin

Arinloyé A.A.D; Hagelaar, G.; Arinloyé A.A.D; Hagelaar, G.; Linnemann, A.R.; Linnemann, A.R.; Coulibaly, O. and Royer, A.Coulibaly, O. and Royer, A.

WECARD Cotonou, 24 - 27 May 2010WECARD Cotonou, 24 - 27 May 2010

Outline

Problem statement and objectives Background on pineapple chains Theoretical framework Methodology Results and conclusion

Important issues in the pineapple supply chain:

High transaction costs: cheating, opportunism behavior, corruption, weak logistic facilities, etc.

Limited collective action: lack of organized governance structure

Irregular and scattered supply by smallholders Thin assembly markets Poor and variable product quality

Understanding chains’ coordination and organization is needed for a co-innovative quality performance of Beninese pineapple supply chains

Problem statement

Analyze the organization and structure of pineapple supply chains in Benin with a focus on chain governance and channel choice for quality improvement

Research objective

Key Questions Answering the following questions leads to reach the research objective :

Which actors are directly and indirectly involved in pineapple activities?

What kind of linkages and flows exist in the cooperative networks and how do they affect pineapple quality and chain performance?

What are the pineapple quality issues that are hampering actors’ access to more profitable markets?

Which conflicts or synergies occur between chain actors and who are involved in managing and resolving these conflicts ?

In 2007 government selected pineapple (among others) as a spearhead to counterbalance dependence on cotton

Pineapple production zones With 90% from Atlantique

department

GuineoCongolian Zone

Background

figure 1: Pineapple production and yieldSource: INSAE, 2005 and FAOSTAT, 2010

020000400006000080000

100000120000140000160000

0

10

20

30

40

50

60

70

Production(kg) Yield (kg/ha)

Tonne Tonne/ha

Background In one decade,

pineapple production increased threefold from 44,836 tonnes in 1998 to 136,123 tonnes in 2008

Market choice

Chain Governance

Institutional environment

Firm characteristics

Performance

Quality management

Theoretical framework

Case study approach most indicated in responding to:• which ?• what ?• How to understand ?

Information gathering• literature review, questionnaires • interviews and focus group discussions

Sampling • Input suppliers (2)• Producers (20)• Traders (12)• Processors (5)• Exporter (2)• Research institutes , extension and quality control services (12)

Research methodology

Design tests and employed tacticsTable1. Design tests and tactics employed during the case study

Design test Theoretical explanation of the construct

Case study tactics

Construct validity

Construct validity is to ensure that correct operational measures have been established for the concepts that are being studied

- Multiple sources of evidence Chain - Interview respondents - Reviewing draft of case study report

Internal validity

Internal validity is to make sure that a causal relationship - i.e., certain conditions lead to other conditions - has been established.

- Pattern matching - Explanation building

External validity

External validity is to prove that the domain to which a case study’s findings belong can be generalized.

- Specification of the population of interest - Replication logic in multiple with different chain actors in different areas - Interview protocol

Reliability Reliability involves demonstrating that the findings from a case study can be repeated if the case study procedures are followed.

- Clearly conceptualized constructs - Multiple indicators - Execution of pilot tests - Case study data base and records

Pineapple chains are characterized by large and heterogeneous group of producers;

Differences in farm size, scale of production, technical and financial capacities, access to input, land and labour

Current debate for international market: MRL <= 0.5ppm (mg/kg) instead of 2ppm

Firm Characteristics

Mismatch between producers requirements and observed interventions

Low public sectors intervention and supports along the chains

High transaction cost (police/gendarme harassment & rural roads conditions)

Subsidized fertilizers sold on the black market

Inappropriate existing credits/loan (2M fcfa for 1ha)

Loans from IMF (36 and 47% APR) Loans from informal sectors (as high as 20% a day) Personal savings and relationship based financial supports Pre-financing in cash or in kind from pineapple trader or exporters

Institutional Environment

Choice of a specific chain is affected by:

Price attribute (fixed vs varying) Temporary specificity Socio-cultural condition Product attributes (size) competition with other fruits

5 main chains targetedBut no quantitative data available

Channel choice

Regional Fresh Export, 40%

Fresh Export to EU, 2%Local process

to Juice, 15%

Local Fresh consumption,

35%

Dried pineapple Export, 8%

Pineapple chains map

Governance structures mainly consist of: spot market relations relational contracts collective action combination of contracts and collective action

Outgrowing schemes Relying on exporter to get advice and inputs

support Benefit for both involved parties Formalizing the trading with Nigeria

Chain governance mechanisms

ILO; HACCP; EurepGAP; ISO, etc. Stringent norms and quality standards

Reduction of export possibilities (2%) Consumer’s quality requirements on local and

border markets are generally low Quality affected by :

Less qualified labour and qualified competences with adapted equipments

Farming systems Access to inputs (planting & fertilizers) Need of tractability system (accreditation and

certification)

Quality Management and control

Constraints and Challenges in Constraints and Challenges in Governance and Channel Choice Governance and Channel Choice

in Tropical in Tropical Agri-FoodAgri-Food Chains: Chains: the the Case of Pineapple Supply Chains Case of Pineapple Supply Chains

in Beninin Benin

Arinloyé A.A.D; Hagelaar, G.; Arinloyé A.A.D; Hagelaar, G.; Linnemann, A.R.; Linnemann, A.R.; Coulibaly, O. and Royer, A.Coulibaly, O. and Royer, A.

WECARD Cotonou, 24 - 27 May 2010WECARD Cotonou, 24 - 27 May 2010