How do governance mechanisms between farmer and traders advance sustainability goals and enhance the resilience of agricultural value chains?

Abstract

Despite the importance of traders in Agricultural Value Chains (AVCs), empirical evidence about the interaction and networking between them and farmers in producing countries is scant. The role of traders in general, and exporters in particular, in championing sustainability goals and enhancing the resilience of AVCs is rarely addressed in the literature, as they are usually depicted as unproductive and predatory brokers that increase price gaps between farmers and consumers. This paper focuses on the case of the coffee sector in Colombia and the governance mechanisms in the segment Farmers − Export Companies (ECs) for the adoption of Voluntary Sustainability Standards (VSSs) oriented to spur environmental, economic, and social sustainability practices in AVCs. By conducting semi-structured interviews and Process Net-Maps, an innovative method for analyzing governance challenges in agriculture, four governance schemes between farmers and ECs were identified, entailing different degrees of centralization and support provided by the EC. Each scheme was the result of the type of supplier available in coffee growing zones (individual farmers, informal groups of farmers, coffee grower associations, or a mix of these suppliers known as ‘baskets’) and the level of trust among actors. The paper hypothesizes that hybrid forms of coordination in the segment ranging from markets to vertical integration, the combination of different procurement strategies, a phenomenon known as plural forms, and complex incentive structures to adopt sustainability practices enhance both the implementation of sustainability approaches and resilience.