The Economic Institutions of the Agri-Food Sector
Track Coordinators: Liesbeth Dries and Stefano Pascucci (Wageningen University), Kostas Karantininis (University of Copenhagen and the Swedish University of Agricultural Sciences), Annie Royer (Laval University)
In recent years the agri-food sector has been challenged by a dramatic increase in risk and uncertainty. Reasons for this can be found in high price volatility, policy reforms, food safety concerns, and social and economic turbulence. As a response to these challenges agri-food players are re-orienting their core business activities and re-conceptualizing their relationships within supply chains and rural communities. As a result, a new set of institutions, organizations and governance structures is emerging. As these institutional innovations in the agri-food sector are still under-researched, there is a need for more in-depth theoretical investigations as well as for innovative research methodologies.
A first topic that can be covered in this track is related to institutional changes in many European agricultural sectors . For example, in the dairy sector, as a direct result of recent crises, the EU commission has published proposals to stabilize dairy markets. These proposals include the encouragement of formal contracts in the sector, the stimulation of producer organizations to improve farmers’ bargaining power and the set-up of inter-branch organizations that involve players from different supply chain segments to improve information flows and research efforts and promote best practices (EC, 2010). While contracts and producer organizations are not novel in the dairy sector, the degree to which member states make these institutions compulsory may have important repercussions for the dynamics of relationships in the sector. A similar institutional framework has been discussed also for other sectors including the pork and fruit and vegetable sector.
A second topic that can be covered in the special issue refers to the analysis of emerging organizations and governance structures in the agri-food sector. As pointed out by Williamson, O. E. (2003, p.23) and Masten (2000) the agricultural and food sectors are traditionally providing extraordinary examples of “puzzling phenomena” that often can challenge mainstream theories. Therefore a deeper and broader analysis of emerging governance structures within agri-food transactions can lead to new relevant theoretical achievements as well as “provide a rich and largely unexplored area for application and refinement of transaction-cost theory” (Masten, 2000; p.190).
Examples in this sense are the increasing number of consumer-producer networks and cooperatives (i.e. Farmers Markets and Community Supported Agriculture) that are re-organizing short supply chains mainly at local level and that heavily rely on issues such as trust, fairness and social capital in general (Toler et al., 2009; Pascucci, 2010). Also at a global level new forms of vertical coordination, partnerships and alliances are emerging between different and heterogeneous stakeholders. These partnerships increasingly involve agri-food companies (at different levels of the supply chain), NGOs, universities, government agencies, international organizations, competitors and/or investors - to share information and specific assets and to realize common investments (Dentoni and Peterson, 2011).
Therefore the focus of this track is to further develop the theory of new institutional economics through empirical applications that are relevant for food supply chains and rural areas.
The institutional dynamics in both developed and developing economies are considered as well as rural activities. The track will primarily focus on contributions that will adopt a new institutional economics perspective and (out of a vast literature) will highlight some of the most important branches of this literature, such as transaction cost economics, agency theory, property rights, relational contracting and networks.
Proposed ERAE special issue
A selection of the contributed and invited papers will be proposed for publication in a special issue of a scientific journal after an external double blind review process. The European Review of Agricultural Economics (ERAE) has been approached as the first option.
Dentoni, D., Peterson, H.C., 2011. Multi-Stakeholder Sustainability Alliances: A Signalling Theory Approach. International Food and Agribusiness Management Review (In Press).
Masten, S. E. (2000). Transaction-Cost Economics and the Organization of Agricultural Transactions. In M. R. Baye (ed.), Advances in Applied Microeconomics - Industrial Organization.
Pascucci, S., 2010. Governance Structure, Perception and Innovation in Credence Food Transactions: The Role of Food Community Networks. International Journal on Food System Dynamics, 1 (3), 224 – 236.
Toler, S.,B. C. Briggeman, J. L. Lusk, and D. C. Adams. 2009. Fairness, Farmers Markets, and Local Production. American Journalof Agricultural Economics 91(5): 1272–1278.
Williamson, O. E. (2003). Transaction cost economics and agriculture - An excursion. In G. V. Huylenbroeck and G. Durant (eds.), Multifunctionality Agriculture : A New Paradigm for European Agriculture and Rural Development. Ashgate Pub Ltd.
Deadline for Full Paper Submission: February 20th, 2012.