E-COMMERCE IN AGRICULTURE: DEVELOPMENT, STRATEGY, AND MARKET IMPLICATIONS

Marketing,

The Digitalisation of African Agriculture Report 2018-2019

An inclusive, digitally-enabled agricultural transformation could help achieve meaningful livelihood improvements for Africa’s smallholder farmers and pastoralists. It could drive greater engagement in agriculture from women and youth and create employment opportunities along the value chain. At CTA we staked a claim on this power of digitalisation to more systematically transform agriculture early on. Digitalisation, focusing on not individual ICTs but the application of these technologies to entire value chains, is a theme that cuts across all of our work. In youth entrepreneurship, we are fostering a new breed of young ICT ‘agripreneurs’. In climate-smart agriculture multiple projects provide information that can help towards building resilience for smallholder farmers. And in women empowerment we are supporting digital platforms to drive greater inclusion for women entrepreneurs in agricultural value chains

Option contracts in fresh produce supply chain with circulation loss

Purpose: The purpose of this paper is to investigate management decisions via option contracts in a two-stage supply chain in which a fresh produce supplier sells to a retailer, considering the circulation loss of the fresh produce. Design/methodology/approach: Authors propose a Stackelberg model to analyze the supply chain members’ decisions in the decentralized supply chain compared with the integrated one under the newsvendor framework. Findings: The results illustrate that there exists a unique optimal option order quantity for the retailer and a unique optimal option order price for the supplier giving certain conditions; furthermore, option contracts cannot coordinate the fresh produce supply chain when the retailer only orders options. Originality/value: Agricultural products especially fresh produce’s characteristics such as circulation loss and high risk are considered. Option contracts and game theory are combined to manage the fresh produce supply chain’s risk. The proposed tool and models are hoped to shed light to the future works in the field of supply chain risk managementPeer Reviewe

Impact of Information Technology on Agricultural Commodity Auctions in India

Empirical research on the value of information technology investments in the information systems literature has primarily focused on the use of IT by businesses and multinational firms. The impact of IT on the global agricultural supply chain has largely been ignored in the IS literature. Auctions to buy and sell large volumes of agricultural commodities are widely prevalent in diverse regions of the world and are an important part of the agricultural supply chain. In an effort to increase efficiency, commodity auctions have been experimenting with online formats in recent years. Such online auctions have generated significant interest in the trade press because of their potential to generate higher commodity prices for producers, reduce unfair trading practices by middlemen, and bridge the digital divide. We analyze transaction data from a recently set up online auction in India that trades in various grades of coffee. We model the impact of lower transaction costs, daily operations, less collusive behavior among buyers, and learning curve effects on the selling price of coffee in the online auction. We estimate the parameters of the model by comparing the prices in the electronic auction with those of the same grade of coffee at physical auctions held weekly. We find that electronic auction prices are 4 percent higher and the difference is statistically significant. Further, we find that the price differential is higher for coffee grades that have higher price volatility and that are traded less frequently in the physical exchange. We also find that the price differential increases over time as buyers become more familiar with the benefits of the electronic trading format

How Africa trades

Trade is an essential driver of economic transformation, growth, and prosperity. At a time of global uncertainty and policy fluidity, this comprehensive volume demystifies African trade and trade policy to provide a deeper understanding of how trade impacts the lives of all Africans and the continent’s development aspirations. Featuring a wealth of data-driven evaluations of trade negotiations and policy choices, How Africa Trades is an invaluable open access resource for making sense of the continent’s major trade challenges, including commodity dependence, competitiveness, and how African countries engage with often unconducive international trade rules that distort global markets. In-depth analysis focuses on intra-African trade initiatives, including the African Continental Free Trade Area (AfCFTA), trade between African countries and their major trading partners, and how the short-term shocks of Covid-19 restrictions brought about longer-term changes in informal and formal trade patterns, and sped-up shifts in digital trade. Edited by Professor David Luke, and featuring vital contributions on trade economics, international law and sustainable development, How Africa Trades draws on the research expertise of LSE’s Firoz Lalji Institute for Africa. This volume provides information, expertise and tools for policymakers, stakeholders and scholars with an interest in understanding the dynamics of trade and in making effective policy decisions that centre development and inclusivity for Africa and its people

Disrupted Market Relations in Agriculture in North Macedonia: the COVID-19 Crisis

The Covid19 crisis has stressed the importance of, and need for, a stable and functional food system, able to provide consumers with a continous supply of quality food at affordable prices. The pandemic has also highlightened the role of agricultural producers in the food supply chain, with small farmers being the most vulnerable category. This global crisis has actually deepened the problems faced by farmers, especially those on the verge of sustainability. The purpose of this analysis was to provide an overview of the disrupted links in agriculture, as a result of the Covid19 crisis. A survey was carried out with 91 farmers and in-depth interviews were conducted with selected traders and processors. Farmers assessed that  the crisis negatively affected their economic operations. The critical parts of the supply chain derive from the disrupted link between farmers and traders/processors, lack of field technical support resulting from mobility restrictions, uncertainty in cooperation, lower production quantities, and varying quality of the agricultural products. Availibilty and cost of seasonal workforce was also pronounced as an issue. The dominant family fams small-scale structure and lack of  aggregation in the sector challenged the resilience and effective response to the crisis. From buyers'/processors' perspective, the crisis effect was marked through the disrupted communication with farmers, low awareness of the need for change, and drastic decline in the HORECA channel sales. The agricultural and rural policy is designed to address measures adjusted to the needs of the key actors in the sector. The priority set of measures should support the food supply chain, enhancing farmers' networking and aggregation, and on-farm and off-farm diversification, improved communication, information systems and digitalisation. Improving productivity and competitiveness is still an effective strategy for sustainable operations, greater resilience and risk adaptation in crise

The Creation of a Ubiquitous Business Community for an Agribusiness Cluster

Ubiquitous Business Communities (UBC) are information processing systems that offer people the possibility to connect to networks, any time independently from location and computing platforms, which are sensitive to the users´ contexts. UBC allow participants to exchange information and enhance business transactions. These systems may act as market organizers and may affect millions of producers and clients in developing countries. Our research-in-progress paper presents the creation of a UBC to enhance business transactions in an agribusiness cluster. We highlight some characteristics of the UBC under development, considering the main factors that influence the competitiveness of the cluster. We also describe aspects of the development process of the UBC and of the structuration process of the community (organization of a member and product catalog and of product quality standards). Finally we present expectations to be verified in the implementation process of the UBC

Pathways to Just, Equitable and Sustainable Trade and Investment Regimes

In this report we discuss what a Fair, Just and Equitable approach to the global, liberalized and hyper-competitive system of global trade and investments should be. The global market for goods and capital affect the life of producers and workers, stimulates the run towards cheaper products and puts farmers and workers against each other. The current vision of trade and investments is based on the silencing of gendered and reproductive labour and is responsible for the increase in inequality and relative poverty. Furthermore, it stimulates the extraction of commodities and contributes to the degradation of the planet, it has a significant impact on greenhouse gas emissions (GHG) due to transportation representing above 7% of the world total GHG, and it is closely linked with the appropriation of nature through patenting and the shift towards capital-intensive forms of production.In light of this, our report claims that the Fair Trade Movement shall not play ‘outside the market’ nor accept that the existing narrative and mechanisms will provide a solution that addresses the root causes of the problem. If the Fair Trade Movement was to play outside the market, it would create islands of fairness in a sea of degradation and violence, which sooner or later would also swallow those few bubbles (unless they can be reproduced thanks to the support of an elite interested in fair and sustainable products). This is because the global market is characterized by an inherent expansionist tendency and needs to stretch its frontiers, compete for resources and ensure a larger shares of consumers. If the approach was that of tweaking with current mechanisms and narratives, it would accept the historical violence and inequality of colonialism and uneven development that are at the basis of the global system of trade, it would dismiss the role that global trade has in piercing the planetary boundaries, and it would accept that contemporary social problems shall be addressed by making the pie larger rather than adequately redistributing what is already available.Given that the aim is that of implementing justice, equity and sustainability, we thus suggest ten principles/recommendations to be utilized by the Fair Trade movement when thinking about its approach to trade, its campaigns and where does it stand vis-à-vis concrete issues. The adoption of an intersectional and systemic approach to justice, equity and sustainability has concrete implications on the approach that the Fair Trade movement should adopt with regards to a set of trade and investments issues that are prominent in the contemporary international and regional debate. In the last part of this report we engage with five of these topics and present the main elements of a renew policy approach that follows the indications contained in our analysis

Resurgence of Bundling Mechanisms in Digital Services Trade

The expansion of trade through centuries was pushed through a great extent by the unbundling of commodities from various factors that prevent them from being traded globally. The use of the steam engine in shipping, for example, ushered in the rapid expansion of 19th-century trade as transport cost was drastically reduced and countries realized interspatial cost differences across the Atlantic. The previous untradability of services, on the other hand, was broken by various dimensions of globalization that separated the simultaneous production and consumption of services. This unbundling rapidly boosted global trade in recent decades. However, growing developments and innovations in ICT are creating new bundling mechanisms. The essay will identify how these new bundling mechanisms have emerged and their implications on services trade and other dimensions of human development