Power Asymmetry in the Upstream of Agricultural Value Chains (2019-)

This project is designed to explore the power asymmetry in the upstream of agricultural value chains. The relations between various actors – ranging from hired farm workers to corporations who advance agro-inputs – require more nuanced documentation insofar as the power relations between the actors in the upstream have strong implications for the decent work conditions.

The project interconnects the following sub-projects:

Main Research Question:Does the governance of the mango value chain influence the sustainability of agronomic and post-harvest handling practices for improved quality of mango fruits and products in Makueni and Kwale Counties in Kenya?

Project Coordinator: <link mail>Prof. Joseph Matofari

Abstract: The adoption rate of introduced new mango varieties has not been uniform and the adopted practices have not been fully sustained. Surveys and participatory rural appraisals (PRA’s) in major mango production areas and stakeholder fora have identified the lack of knowledge on agronomic practices, disease/insect-pest and post-harvest handling as major constraints to production of good quality mangoes for further processing. A pilot study to investigate the social needs of the mango value chain operators in Kenya was carried out in order to understand how they may affect the mango industry. It was found that the social protection and rights of mango value chain operators in Kenya have received little attention up to now. This could be part of the reasons why there is a low adoption rate of high yielding varieties, as well as the agronomic and post-harvest handling practices that go with them. The major constraints currently hindering the development of the mango value chain in Kenya are categorized into four basic stages in the supply chain: the farm level, the processing stage, marketing stage and the export stage. However, very little information is available on the social capital that goes into making the mango industry a decent work place. Hence, the need to engage in systematic enquiries on the governance issues within the mango industry. A broad baseline investigation along the mango value chain will provide key information on the governance of the mango value chain and how this influences the productivity of the mango industry in Kenya. Therefore, social protection issues affecting the mango value chain in Makueni and Kwale Counties need to be investigated. Additionally, lack of value addition, notably product diversity at the small and medium processing enterprises results in poor products that cannot attract better markets for farmers. The results of such a study and the accompanying policy proposals will lead to the improvement and production of high quality mangoes and their products by the value chain operators in the two Counties.

Project's aim: The aim of this project is to analyze the governance issues affecting the mango value chain and how they influence sustainability of agronomic and post-harvest handling practices for improved quality of mango fruits and products in Makueni and Kwale Counties. The results of such a study and the accompanying policy proposals will be valuable in creating advocacy pathways for mango value chain actors. At production, farmers in Makueni County access to certified planting materials from nurseries ran by various institutions while in Kwale County farmers predominantly produce mangoes from old inherited trees. The cost of seedlings is a setback to the adoption of improved grafted varieties. The lack of fertilizer application on mango crops is a setback to agronomic practices. Farmers fall prey to exploitative cartels in the markets who default in paying the farmers, resulting in high losses. Fruit processing capacities are not fully developed within the Counties as per the pilot study. There are no value addition efforts on mangoes at individual farmer or group levels in both Counties. On socio-economic and decent work issues, farmers are disillusioned with issues on the incomes they receive vis-à-vis the efforts they put in to produce for the market. There is the need for County legislations to protect the interests of the farmers. This will avoid the feelings of exploitative tendencies that cause inefficiencies in the mango industry of the two counties. These Counties are developing strategies to make agriculture a business at County level and the mango value chain is the major enterprise of their choice. By addressing the governance issue at each node of the value chain and adopting technologies in production and product development, it will go a long way to enhance quality production of the mango fruit and value added products to improve income and livelihoods.

Main Research Question:How does the use of power by the stakeholders in the mango value chain affect decent work performance?

Project Coordinators:<link mail>Dr. Mubashir Mehdi
<link mail>Dr. Saira Akhtar

Abstract: Transformation of the agricultural production system from traditional to modern value chains has received prior attention among the policy makers, practitioners as well as academicians/ researchers. Developing countries such as Pakistan have achieved substantial improvements in the traditional production system in some selected crops like the mango value chain. Mango producers along with other traders are earning premium prices by producing premium quality both in the international as well as local or domestic market. However, it has been observed that the value flow system from downstream to upstream of the chain does not work effectively. In other words, the value is not distributed evenly among all the chain players, including farm workers and producers. Consequently, it is inhibiting the implementation of the decent work agenda at the farm level, which cannot ensure the sustainability of a supply chain. The illegitimate use of power, particularly by the downstream players of the chain directing the value flow in their favor, is one of the critical dimensions in this regard. Power in value chains means the negotiating capability of the chain player. This power is mainly constrained at the farm workers as well as growers because of the dominant role of market players such as traders. Therefore, it is important to understand the various factors that create the imbalance of powers along the value chain and to understand how it can be managed effectively. 
Detailed interviews with selected growers and traders will be conducted, particularly with those who are adopting best practices and build a modern value chain. A self-administered survey of the farm laborers will also be organized in order to understand the collecting bargaining power of the work force. Later on, speakers from the relevant field will be invited for an international conference that will be held at UAF in June/July 2019. The speakers will share their scholarly work on the subject which will further guide us to build in-depth insights into power issues in agricultural value chains. At the end, we will be able to find out the impact of power on decent work at the farm level and how it can be managed effectively.

Keywords: Power imbalance, agricultural value chain, decent work, developing countries

Main Research Question:What are the results of production growth and a deeper insertion of the mangoes produced in the Brazilian Northeast in the global value chains with regard to economic and social upgrading?

Project Coordinator: <link mail>Walter Belik

Abtract: The project aims at analyzing the economic and social upgrading/downgrading impacts on agents that act in the mango global value chain produced in the Northeast region of Brazil. Those agents who would be investigated are smallholders, farms/companies and workers. This investigation addresses the economic dynamic of the production, the growth in labor productivity and agricultural yield and the capture of value along the chain. In turn, the social relations specifically focus on the decent work deficit among workers and smallholders. The methodology adopted is based on a qualitative approach using the case study framework. The data collection is concerned to secondary data collected from Brazilian statistics and primary data collected through interviews with stakeholders. The research is expected to identify the decent work deficit in working conditions of rural workers and smallholders. Furthermore, it intends to analyze the pathways to social upgrading, further analyze the evolution of the productivity and the economic upgrading inside the chain as well as the relation between social upgrading and economic upgrading.

Keywords: Global value chains, Economic upgrading, Social upgrading, Decent work deficit.

Main Research Question: How are the Power Asymmetries in the Rice Value Chains in India Shaped by Different Actors?

Project Coordinators: <link mail>Santosh Verma, <link mail>Manish Kumar

Abstract: The production of paddy takes place in non-linear arrangements where various actors (farmers, peasants, agricultural labourers on the one hand and traders, millers, domestic and international companies on the other) are linked in a complex value system. This study largely focuses on the downstream of value chains, analysing how surpluses, rents and profits are generated in the value system of paddy. Farmers of different land-size groups involve in various exchanges with other actors under the conditions of backward and forward linkages. This study will be based on a primary survey to analyse power structures in the rice value chains. It will also examine the livelihood conditions (decent work) of the labourers, peasants and farmers given their position in the power structure. To explore these, it will also be pertinent to understand the role of governance (institutional framework – local, state and central) in various exchanges being made within the chain, i.e. to explore how policy directions affect the power relations in the chain. Given the different end-markets, a comparative picture of rice value chains will emerge.

Keywords: Value Network, Power Structure, Vertical Integration, Paddy

Main Research Questions:Have the needs and governance of the mango value chain operators and how these influence the organizational structures and the performance of the mango industry in Kenya been analyzed?

Project’s aim:

1. To map the pre-investment component (source of planting material, variety, knowledge sharing, cost benefit analysis, and farmer organization and farmer education) of the mango value chain in Makueni and Kwale Counties, Kenya.

2. To characterize the investment options (planting, weeding, crop protection, harvesting- mechanical/manual) available to mango farmers in Kenya.

3. To determine product handling (cleaning, sorting, grading, packaging, labeling and storage) and transformation (primary/secondary) practices by mango value chain actors in Kenya.

4. To analyze the role of marketing/trading (Power dynamics- promotion, transportation, and commodity exchange) and consumer preferences in the mango value chain in Kenya.

5. To understand the relationships between the mango value chain actors in Kenya.

To identify decent work deficits in the mango sector, diagnose the symptoms and causes, and then suggest measures to enhance labor standards in the sector through dialogue and policy advocacy.

Main Research Questions:How do small tea growers (STGs) organise land, capital, labour and work? Are they following similar or diverse pattern? How are the STGs getting organised in order to promote their interest and address the problems? What factors do STGs consider while setting the price and quantity to be supplied and what role does market play? How and in what ways do the STGs add value in the tea production? What are the working conditions of these small tea growers in different spheres of decent work such as social protection and social dialogue?

Project’s aim: Small growers are more vulnerable as compared to large plantation workers. Their vulnerability persists in terms of organizing and bargaining over price setting. The study aims to look at the various issues within the decent work domain especially in terms of social dialogue, access to social protection and other basic work and employment opportunities. Reducing costs of production for small growers would also lead to increase in productivity. Therefore the study aims to establish the linkages between value chain and decent work.
 
What is the role of the state and how can small tea growers influence the state to provide for other cost reducing activities such as social protection, health facilities, sanitation and prevention of disease, better housing etc.?
This research will explore the value chain of tea. There have been some studies that have followed the manufacture of tea in the large sector to the markets abroad. We should stress here that though the price of tea in the national market has been rising (India is also the largest consumer of tea) and the export sector too is expanding, tea plantation workers are the lowest paid not just in the plantation sector (tea, coffee, rubber, cinchona, cardamom) but also in the formal sector in general. Processed tea, manufactured in the plantations or local factories are either sent to the auction centers (Guwahati, Siliguri, and Kolkata for Eastern India). The large tea marketing companies buy from there. It is believed that cartelization of buyers in the auctions do not allow tea prices to rise even though there may be high demand. The cartels comprising a handful of big buyers (most are MNCs) thus buy tea at lower prices and sell at much higher prices after packaging the product. We will have study this process in order to understand why the producers get less for their product.
If larger plantations are victims of cartelization, small growers are even more vulnerable. If Bought Leaf Factories, like the other producers, get low prices, they will buy green leaves from small growers at lower rates. The small grower too will cut down on labor costs in order to cut down costs of production. This will have an impact on the living conditions of small growers and the labor engaged in these plantations. We need to look at these issues within the ambit of decent work, not merely in terms of wages and living conditions but in other spheres as well such as social dialogue for easing their tensions (what is the role of the state and how can small growers influence the state to provide for other cost reducing activities such as social protection, health facilities, sanitation and prevention of disease, better housing etc. These would help in reducing costs of production for small growers and would also lead to increase in productivity. We can thus see that the value chain and decent work are closely linked.

The Açú-Mossoro in Northeast Brazil annually produces 250,000 tons of melons, with approximately 80% of this total is exported to European traders. Production is carried out for about just over 20 producers, who are organized as follows: a cooperative of small producers (COODAP); a cooperative of medium producers (COPYFRUTAS); plus a large company. The private company is considered the largest melons producer in the world, with 20,000 hectares of fruits, employing 6000 workers and contributing for 70% of the region's exports.
The research project: investigates labor relations in melon production of the Açu-Mossoró highlighting the quality of jobs created directly by the company and the family farmers; addresses the value added at each link in the production chain of melon produced in Region, including working information on the cost of labor in the final price of the exported product and the contribution of work in different production models; evaluates the impact of changes in the international conjuncture and the Brazilian  exchange rate in terms of employment, workers' remuneration and its contribution to cost of production.

<link mail>Prof. Dr. Christoph Scherrer