Restructuring toward a modernized agro-food value chain through vertical integration and contract farming: the swine-to-pork industry in Vietnam

Abstract

PurposeRestructuring swine and pork value chain plays important role in agriculture reformation of Vietnam, the top global pork-lover and swine producer worldwide. This study aims at investigating the modernization of its entire swine-to-pork value chain.Design/methodology/approachThis study combines the secondary data and primary data. The secondary data included the publications, procurements, databases from both worldwide and in Vietnam. Primary data comprised the results from field-trips in March 2018 and February 2019 that used in-depth interviews with representative key persons of involving stake-holders.FindingsThe prevalence of contract farming, vertical expansion and conglomerate mergers mainly boost vertical coordination in the industry, which creates three hierarchy paradigms of governance named the full- and semi-vertically integrated model, and the formal coordinating relation institution. Consequently, consolidation has occurred and lead the swine and pork value chain toward modernization.Research limitations/implicationsThis study generalizes its first trends of the modernization of the swine-to-pork industry instead of provides its concreted impacts to the involved stakeholders.Social implicationsSwine and pork industries retain historical and socio-political issues in Vietnam. Social problems are going to raise if number of traditional swine producers are failed in the competition from the equipped large-scale producers leading by the giant vertically-integrated contractors.Originality/valueThis study provides the empirical synthesis of the vertical coordination in entitle swine and pork value chain of Vietnam through combining the view of the strategic alliance of the firm and global value chain governance.