Agriculture, food and global value chains: issues, methods and challenges

Global value chains (GVCs) have changed the nature of production and specialisation around the world, including in agriculture and food sectors. This study takes an in-depth look at the landscape of agro-food GVCs and explores the factors that influence GVC participation by making use of a newly developed database on trade in value added for 20 agro-food sectors derived from the Global Trade Analysis Project (GTAP) database. The study also explores the benefits of GVC participation, viewed through the lens of domestic value added creation and employment, with a focus on the policy factors that influence these benefits. The study points to considerable variation in GVC participation across agro-food sectors, driven not only by product characteristics but also by policy factors related to trade and investment, the agricultural enabling environment and policies influencing service markets. The study shows that for agro-food sectors, trade barriers act as a tax on exports, reducing the domestic value added created from participation in agro-food GVCs.

Recent decades have witnessed an increasing integration of developing countries into global value chains (GVCs). This growing participation in global production sharing has raised hopes for economic upgrading within such value chains. However, globalization has intensified international competition, and achieving economic upgrading is not an easy task. Moreover, the social consequences of participating in GVCs are not always positive; however, they have received considerably less attention in the literature. This paper suggests a simple and parsimonious approach to measuring economic and social upgrading (and downgrading) in GVCs. Applying this parsimonious methodology and using quantitative secondary data, we analyze how widespread upgrading has been in four selected manufacturing GVCs: apparel, wood furniture, automotive, and mobile phones. We also investigate to what extent downgrading is part of the reality and undertake a comparative analysis across GVCs, regions and country groups (developing vs. developed countries). We find that the promise of industrial upgrading through participation in GVCs does not materialize for everyone. Indeed, economic upgrading has taken place in just over a quarter of the countries in our sample, among them mainly developing countries. Finally, we examine the relationship between economic performance and social performance in the different GVCs to investigate whether or not economic upgrading is typically associated with social upgrading. While patterns differ across GVCs, we find that economic upgrading is more likely to occur simultaneously with social upgrading than without, and vice versa. Our analysis, thus, suggests that economic upgrading is conducive to, but not sufficient for, social upgrading to occur.

Global value chain (GVC) analysis and supply chain management (SCM) research have been following parallel paths of development. However, they share the same premises: the fragmented and global nature of production chains and the importance of interaction across actors for innovation and competitiveness. While GVC analysis follows a more holistic and global approach, SCM provides a more nuanced view on company strategies and the processes that ultimately shape governance and upgrading in GVCs. Consequently, this chapter first establishes the common ground between the two disciplines and then presents how selected concepts from these different branches of literature can be combined, with a special focus on how to better understand the concept of upgrading. The chapter ends with a discussion of potential areas of joint investigation for SCM and GVC scholars, including the impact of new technologies and platforms, the dynamics of reshoring and relocation, and the evaluation of risks in complex and multi-country supply chains.

Global value chain (GVC) analysis has been developed to understand the changing nature of global production and distribution processes, but it has not been widely adopted by sociologists to understand the implications of globalization for work, employment and the levers for upgrading labour conditions. To understand the extent to which insertion in GVCs creates opportunities for the upgrading of labour and skills, it is necessary to consider the influence of national institutions, alongside internationally dispersed relationships between companies in different parts of the value chain. By examining the production of farmed salmon in Chile, the article explores the interactions between national institutions for innovation and skills development and locally based producers’ insertion in the global value chain.

Countering Overseas Power in Global Value Chains: Information Asymmetries and Subcontracting in the Plastics Industry

Global Value Chains - 2[-]Table of Contents - 6[-]Part I Theoretical Contributions - 8[-] 1 Global Value Chains An Overview of the Issues and Concepts - 10[-] 2 The Bottom of the Pyramid (BOP) and the Private Sector A Value Chain Research Approach - 32[-] 3 Value Chains in Developing Countries A Framework for Analysis - 44[-]Part II Local Agricultural Value Chains - 70[-] 4 Beer multinationals Supporting Africa's Development? How Partnerships Include Smallholders into Sorghum-beer Supply Chains - 72[-] 5 Bush-to-energy Value Chains in Namibia Institutional Challenges for Pro-poor Rural Development - 90[-]Part III International Agricultural Value Chains - 118[-] 6 Localizing Global Standards Illustrative Examples from Kenya's Horticulture Sector - 120[-] 7 Using a Partnership to Achieve Sustainable Development of the Palm Oil Value Chain in Malaysia - 138[-]Part IV Value Chains in the Industrial and Services Sector - 164[-] 8 Global Competition in the Semiconductor Industry A Comparative Study of Malaysian and Chinese Semiconductor Value Chains - 166[-] 9 Business-community Partnerships The Link for Sustainable Local Development? - 202[-]Part V Conclusions: Upgrading Value Chains in Developing Countries - 236[-] 10 Upgrading of Value Chains in Developing Countries - 238[-] 11 A Learning Case of a Local Value Chain The Banana Subsector in Arusha Municipality and Arumeru District: Producing Banana Beverages - 252[-]About the Authors - 274[-]Index - 278

Superior Bargaining Power and the Global Food Value Chain: The Wuthering Heights of Holistic Competition Law?

Purpose This article unveils the governance dynamics of a frontier region for global value chains (GVCs). For this purpose, we developed a replicable methodology to analyze the interaction between public policies and the governance of GVCs to better assess sustainability impacts and business responses. We apply this methodology to understand the governance dynamics in the beef cattle GVC in the Brazilian Amazon. In Brazil, cattle ranching increasingly concentrates in the Amazon region, notably in the state of Pará, becoming the major driver of deforestation as public policies and law enforcement are ineffective. Using our methodology, we were able to identify the main weaknesses in governance pertaining to sustainability in the beef GVC. Design/methodology/approach The methodology employed a case study approach and utilized GVC mapping and analysis using primary (semi-structured interviews and site visits) and secondary data sources. The governance structures along the GVC were characterized. Finally, the sustainability and upgrading within and beyond the GVC were analyzed. Findings Based on our methodology, emerging beef GVCs, such as those in Santarém, Pará State, primarily supply the domestic market without external pressures to improve sustainability. This fact coupled with a lack of local capacity to implement public policies presents challenges for sustainable governance. Efforts to enhance the performance of the value chain predominantly stem from private sector capacity-building initiatives targeting ranchers. Originality/value Through the development of our method, the governance of the Brazilian beef GVC in the Amazon is mapped and analyzed. This study introduces a novel sustainability-focused GVC mapping methodology aimed at establishing a standardized framework to enhance the comparability of research. As a result, this study offers useful theoretical and empirical contributions to the literature on the sustainability of GVCs in frontier regions where public governance capacity is low.

Economic and Social Upgrading Dynamics in Global Manufacturing Value Chains: A Comparative Analysis

This paper lays out the main features of the global automotive industry and identifies several important trends. A boom in developing country sales and production has not yet overshadowed the importance of existing markets in developed regions. Regional integration is very strong at an operational level, yet the industry has recently developed a set of global-scale value chain linkages, and retains national and local elements as well. The paper highlights how global, regional, national and local value chains are nested to create a pattern of global integration that is distinctive to the industry. We use global value chain analysis to help explain the limits of build-to-order in the industry, the role of regional and global suppliers, the shifting geography of production and how the characteristics of value chain linkages in the industry favour tight integration and regional production. We describe how industry concentration focuses power in the hands of a few large lead firms and discuss the implications of this for value chain governance and the geography of production.

Effective integration into global value chains (GVCs) has enabled China’s technological progress and economic growth. Studying how China has built interactions with other countries within these GVCs and how it has transformed its GVCs in the electronics and IT equipment industries is of high scientific and practical significance. Using the TiVA 2023 value-added database published by the OECD, this article aims to examine the transformation of China’s GVCs in the development of IT production and exports from 1995 to 2022 and then to characterize the current situation and prospects. The study calculates indices of China’s upward and downward participation in electronics and IT equipment GVCs, as well as the role of this industry in the creation of final demand in other countries. The results of the study reveal the sustainability of the export potential China has created through its participation in GVCs, primarily in the consumer electronics and telecom equipment segments. China has been able to make significant inroads into GVCs, replacing essential products and technologies from Western countries while simultaneously increasing the dependence of their GVCs and final consumption on its IT industry. Under conditions of technological decoupling, the participation of both China and other countries in GVCs will gradually decline and/or develop toward regionalization. For China, this does not pose a threat of losing its leading position in the global market for most IT products, with the exception of semiconductors

Global value chains (GVCs) in agriculture and food sectors have the potential to influence trading relationships and the gains from trade for different sectors along the value chain. This report explores the way in which value from trade and GVC participation is created for the agriculture sector. It examines differences in returns to the sector from participation in GVCs and trade either directly in contrast to participation that relies on downstream domestic processing. The study makes use of a database on trade in value added for 22 agro-food sectors derived from the Global Trade Analysis Project (GTAP) database. The evidence presented in this paper suggests that aggregate value to the agriculture and to the economy overall from direct participation in trade and GVCs generates at least as much value as participation that relies on domestic downstream processing. Similar overall gains from primary exports are associated with greater volumes and the value created from ‘value addition’ to these exports – the embodied service and other inputs. Indeed, countries that specialise in primary exports have higher shares of service value added in these exports, with this also being a determinant of value growth for middle-income countries.

The article is devoted to the generalization and systematization of the main theoretical approaches and practical methods of measuring the participation of countries or industries in global value chains (GVC). The work provides the definition and main content of global value chains. It has been noted that the growing role of global value chains and their importance not only changes the approach to the ways of generating income and ensuring economic growth, but also gives an awareness that the most important driver of economic growth of an industry or country is direct participation in global value chains. Significant arguments have been presented in favor of the participation of countries in global value chains. Summarizing the existing methods of calculating the degree of a country’s participation in global value chains, the authors have singled out four index based methods: Index of Vertical Specialization, Export complexity index, GVC participation index and GVC position index. Index of Vertical Specialization assumes using data on the country’s expenditure-output for the distribution of the value of imported foreign goods contained in export products of a certain industry in this country, on the total export value of the industry. Export complexity index based on export volume and income of a country that participates in global value chains, as well as the export of goods of a specific country and the industry index of goods to measure the national product index. GVC participation index is measured in terms of the value of goods and services added as a result of trade. GVC position index shows the “status” of a certain industry in a country: the higher the value, the higher the “status” of a certain industry in the country’s global value chain, and vice versa. The main formulas for calculating indices, advantages and disadvantages of their use have been presented. Thus, it has been proven that the GVC participation index, which is based on the Index of Vertical Specialization, reflects the dynamics of the integration of countries in the GVC and allows for inter-country and inter-industry comparative analysis, but does not provide an opportunity to assess the benefits received from participation in the GVC. The use of the GVC Status Index allows to solve this task both at the country and at the sectoral level. It has been proposed to use GVC participation index and GVC position index as a basis for analyzing Ukraine’s participation in global value chains. This will allow not only to reveal the degree of Ukraine’s participation in the modern international division of labor but also, based on the conclusions of such an analysis, to develop recommendations for improving the place of Ukraine in the GVC and change the position of Ukraine from a raw material supplier country to a raw material processing country.

How do global value chains respond to climate change? A case study of Chinese manufacturing firms

The goal of this paper is twofold: to comparatively analyze the social performance of global and local berry supply chains and to explore the ways in which the social dimension is embedded in the overall performance of food supply chains. To achieve this goal, the social performance of five global and local food supply chains in two countries are analyzed: wild blueberry supply chains in Latvia and cultivated raspberry supply chains in Serbia. The study addresses two research questions: (1) What is the social performance of the local and global supply chains? (2) How can references to context help improve understanding of the social dimension and social performance of food supply chains? To answer these questions, two interlinked thematic sets of indicators (attributes) are used—one describing labor relations and the other describing power relations. These lists are then contextualized by examining the micro-stories of the actors involved in these supply chains. An analysis of the chosen attributes reveals that global chains perform better than local chains. However, a context-sensitive analysis from the perspective of embedded markets and communities suggests that the social performance of food chains is highly context-dependent, relational, and affected by actors’ abilities to negotiate values, norms, and the rules embedded within these chains, both global and local. The results illustrate that the empowerment of the chains’ weakest actors can lead to a redefining of the meanings that performance assessments rely on.