Primary Industry Chains and Networks: Analysis for Public and Private Interests

Abstract

Modern primary industry makes obsolete the conventional analysis of private and social performance. This is due to the dominance of chain failure as opposed to the more familiar market failure. This paper makes the case that value addition dominates aspirations for primary industries, and vertical coordination and shifts in commercial power balances feature in the sharing of benefits within value chains. Moreover, complexity in chain relationships and some particular features of primary industry bring challenges to forward planning and concerted effort. Value addition in New Zealand's forestry and wood products' industry presents several such challenges, and these are examined with a qualitative system dynamics model. Potential policy responses that eliminate chain failure are discussed in association with the Australian beef industry research model. The paper advocates joint industry‐university‐government action in terms of research and skills development. Copyright © 2016 John Wiley & Sons, Ltd.

The promotion of amaranth value chains for livelihood enhancement in East Africa: A systems modelling approach

“…In contrast, changes in demand for amaranth resulted in a substantial, sustainable increase in land allocation for amaranth production as producers gained more income from producing amaranth. This quantitative conclusion supports previous conceptual work that advocates a supply chain orientation of primary industry policy (Baker et al 2017). It also contributes a quantitative example to the emerging field of chain failure, wherein conventional internalisation of market failure is refined to refer to actors that lie within, or beyond, the value chain in question (Griffith et al 2015).…”

“…Kaplinsky & Morris 2001) that focuses primarily on mapping a given value chain at a point in time, rather than specifying the mechanisms by which value chains evolve over time in response to shocks or interventions. We use a value chain approach, augmented by the specification of dynamic relationships amongst variables so as to more completely represent the timing and interconnected complexity of change in the chain (Baker et al 2017). We used the system dynamics (SD) modelling and analytical paradigm developed at the Massachusetts Institute of Technology in the mid-1950s.…”

“…Chain failure is an adapted form of externality (sub-optimal performance of the chain because of the presence of system externalities) occurring within the supply or value chain. Primarily applied to agricultural value chains that do not lend themselves to conventionally defined market interventions (Griffith et al 2015;Baker et al 2017), chain failures have been shown to be best addressed by an industry or supply-chain approach (Baker et al 2017).…”

Upgrading the smallholder dairy value chain: a system dynamics ex-ante impact assessment in Tanzania's Kilosa district

“…We employed a dynamic value chain framework, using a system dynamics modeling approach, that measures the projected changes in, and performance of, smallholder dairy value chains within a network of market actors over time (Rich et al ., 2011). Such primary industry networks have been depicted as systems (Xu, 2013), for the purposes both of management (Olson and Swenseth, 2014) and policy (Baker et al ., 2017). A ‘system’ is defined as ‘a collection of parts that interact with one another to function as a whole’ (Maani and Cavana, 2007).…”