Lecture 14: Trade and Foreign Value Chains

Question 1

Global Value Chains (GVC)

Answer 1

sequence of inter-related value-adding activities, centered around a particular commodity or product, which traces this product from ‘cradle’ to ‘grave’

Question 2

Global Value Chain Analysis

Answer 2

Studies the governance structure and power relations across ‘nodes’ in the chain (inspired by centre-periphery / dependency theory)

–> who is included, who coordinates, how are profits distributed?

Question 3

dedicated suppliers

Answer 3

Increased complexity of food products stimulates downstream actors (supermarkets) to pick one or a few “dedicated suppliers” in upstream country rather than deal with many smallholders

Question 4

why dedicated suppliers?

Answer 4

lower transaction costs

lower risk: easier to monitar a few large farms

Question 5

Single-origin products

Answer 5

exclusive sourcing from particular site

Question 6

Collective organization of farmers into cooperatives (or producer companies)

Answer 6

• economies of scale
• lower transaction costs

Question 7

cooperatives in the GVC

Answer 7

Cooperatives as interface between (smallholder) farmer and global market –> more bargaining power vis-à-vis lead actors (supermarkets)