Publication: The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Centra Asia
Loading...
Published
2005
ISSN
Date
2012-06-08
Author(s)
Editor(s)
Abstract
A major problem in the Europe and Central Asia (ECA) agricultural sector and rural areas during the transition was the breakdown of the relationships of farms with input suppliers and output markets. The simultaneous privatization and restructuring of the farms and of the up- and downstream companies in the agrifood chain have caused major disruptions. The result is that many farms and rural households face serious constraints in accessing essential inputs (feed, fertilizer, seeds, capital, etc.) and in selling their products. This report presents several case studies and survey reports implemented across countries and subsectors of the agrifood supply chains in ECA. The case studies provide detailed information and analysis and are a rich source of insights in the processes of vertical coordination that are taking place in the ECA region and their effects. In addition, the case studies include interviews with managers of international companies who have invested in this region. The objective of the study was to analyze vertical coordination (VC) in agrifood supply chains in ECA and to identify options for improved policies, institutions, and investments which Governments could make, and which the World Bank could support, in order to improve links in the agricultural marketing and processing chain and increase access of farmers to input and output markets. This is especially important in those countries where contractual arrangements are slow to develop.
Link to Data Set
Citation
“Swinnen, Johan F.M.. 2005. The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Centra Asia. ECSSD Case studies working paper;no. 41. © World Bank. http://hdl.handle.net/10986/7518 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia(Washington, DC, 2011)A major problem in the transition countries of Europe and Central Asia (ECA) during the transition was the breakdown of the relationships of farms with input suppliers and output markets. The simultaneous privatization and restructuring of the farms and of the up- and downstream companies in the agrifood chain has caused major disruptions. The result is that many farms and rural households face serious constraints in accessing essential inputs (feed, fertilizer, seeds, capital, etc.) and in selling their products. The problems are worsened by the lack of public institutions necessary to support market-based transactions, such as for enforcing property rights and contractual agreements. The objective of the study is to analyze Vertical Coordination (VC) in agrifood supply chains in ECA and to identify options for improved policies, institutions, and investments which Governments could make, and which the World Bank could support, in order to improve links in the agricultural marketing and processing chain and increase access of farmers to input and output markets. This is especially important in those countries where contractual arrangements are slow to develop. It is also important if farmers are to be lifted out of subsistence farming and into a modern agrifood economy.Publication The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia : Implications for Policy and World Bank Operations(Washington, DC, 2005-06)A major problem in the transition countries of Europe and Central Asia (ECA) during the transition was the breakdown of the relationships of farms with input suppliers and output markets. The simultaneous privatization and restructuring of the farms and of the up- and downstream companies in the agrifood chain has caused major disruptions. The result is that many farms and rural households face serious constraints in accessing essential inputs (feed, fertilizer, seeds, capital, etc.) and in selling their products. The problems are worsened by the lack of public institutions necessary to support market-based transactions, such as for enforcing property rights and contractual agreements. In the absence of appropriate public institutions, private contractual initiatives, often from large food and agribusiness companies, are emerging to overcome these obstacles. Large traders, agribusinesses, and food processing companies, often as part of their own restructuring or following foreign investment, start contracting with the farms and rural households and provide basic inputs in return for guaranteed and quality supplies. This process of interlinked contracting, called vertical coordination, is growing rapidly in ECA agriculture and rural areas. This report pinpoints unresolved issues related to efficiency, equity, and government policy. As a part of its analysis, the report identifies options for improved policies, institutions, and investments which Governments could make, and which the World Bank could support, in order to improve links in agricultural marketing and processing chains and increase access of farmers to input and output markets.Publication Albania : Strategic Policies for a More Competitive Agriculture Sector(Washington, DC, 2007-10)Recent trends in Albania suggest that it has the potential for a modern and competitive agricultural sector, provided there is sufficient private investment and the right policy environment. This chapter looks at the role of agriculture in the economy and the current status of the sector, and outlines the implications of modernization and transformation of agriculture for rural areas. It also identifies trends and sources of growth for agriculture, and concludes by presenting the key policy challenges for the sector. The rest of this report analyzes the challenges facing the agricultural sector and recommends policies for addressing them. These challenges are analyzed in greater detail, and more specific policy recommendations are given in the following chapters, which focus on strengthening supply chains, improving food safety, and ensuring that reforms are carried out in compliance with EU legislation. The final chapter looks at how well public expenditures in agriculture are managed in order to achieve these policy objectives.Publication Distortions to Agricultural Incentives in Eastern Europe and Central Asia(World Bank, Washington, DC, 2009-03)In a recent survey of European economic growth since 1950, Crafts and Toniolo (2008) conclude that incentive structures are a crucial explanator of comparative growth rates of the economies of east and west Europe. Pre-empting that, a 2006 report on trade performance and policies in Eastern Europe and Central Asia included as one of its key recommendations the need to reduce the mean and variance of the tariff equivalents of trade barriers, and in particular to reduce unilaterally the policy regimes' anti-export bias, especially in countries exporting primary products (Broadman 2006). To progress such reform in Europe's transition economies efficiently and effectively, and to see how recent policies line up with those of the European Union (EU), requires better information on the extent of reform during the past two decades and of current policy influences on incentives within and between sectors. Immediately prior to their transition to market economies, policies in the region greatly distorted producer and consumer incentives, especially for agricultural products. Those distortions have been reduced substantially in several countries, but large variations remain across the region and distortions appear to be growing again in some countries. Now is thus an opportune time to examine how policies affecting agriculture are evolving in this region, including as part of the adjustment to EU accession for ten of the transition economies in the region.Publication The Kyrgyz Republic : Farm Mechanization and Agricultural Productivity(World Bank, Washington, DC and FAO, Rome, 2009-12)This policy note reviewed the status of farm machinery in the Kyrgyz Republic. Agricultural productivity, particularly in terms of grain yields, is low because of underinvestment. This note finds that a significant deficit in agricultural machinery is hindering sector productivity. The Kyrgyz Republic has fewer tractors per hectare than any comparable country, with a deficit estimated at 40 percent. The deficit of combine harvesters, estimated at 45 percent, is even more critical. When the age of agricultural machinery is taken into account, the underinvestment becomes even more acute. The reduced domestic production of wheat exacerbates food security concerns. Inadequate access to credit and small farm size are the main factors that constrain farm mechanization. The policy note presents three sets of short- to medium-term policy options to: i) promote the demand for farm machinery, by developing credit lines for agricultural productive assets, leasing, facilitating access to secondhand equipment, and testing/demonstrating the efficiency of farm machinery for small-scale farming; ii) increase the supply of farm machinery, by facilitating the development of mechanical services contracting and improving access to farm machinery import markets, including for second-hand equipment; and iii) remove obstacles to private investment, by avoiding distributions of farm machinery or inputs in-kind, the setting of production targets for specific crops, and ensuring that the private sector is free to fulfill its role.
Users also downloaded
Showing related downloaded files
Publication Governance in Sub-Saharan Africa in the 21st Century(Washington, DC: World Bank, 2024-03-04)What can be learned from the governance trajectory of African countries since the beginning of the 21st century What is the quality of governance on the African continent and how does it shape development The first decade of the millennium saw promising growth and poverty reduction in much of the continent. Yet, Sub-Saharan Africa has also been the stage of a stream of governance reform failures and policy reversals, and many countries continue to suffer from the consequences of poor governance. This paper explores the dynamics of governance reform on the continent over the past two decades and points to four key trends. First, effective state institutions, capable of maintaining peace, fostering growth, and delivering services, have developed unevenly. Second, progress has been made on enhancing the inclusiveness and accountability of institutions, but it remains constrained by the weakness of checks and balances and the persistence of patterns of centralized and exclusive power arrangements. Third, civic capacity has risen considerably, but the inability of institutions to respond to social expectations and political mobilization threatens to turn liberal civic engagement into distrust, populism, and radicalization. Fourth, the combination of these three trends contributes to the rise of political instability, which constitutes a major threat for the continent.Publication Evolution of the World Bank’s Thinking on Governance(World Bank, Washington, DC, 2016-01)The preparation work for the 2017 World Development Report on Governance and the Law in 2016 will coincide with the 25th anniversary of the World Bank’s decision to broaden its ongoing work on public sector management to embrace key issues of governance in the Bank’s borrowing countries. This paper provides a broad overview of the major Bank reports on governance that went through a review process at a sufficiently high level in the institution that they can reasonably be described as reflecting the Bank’s considered views at the time on the subject. The objective is to review the evolution of the Bank’s thinking on governance and assess the relevance and effectiveness of the work and its implications for the forthcoming World Development Report. Section two of this paper begins with a brief account of how the Bank came to focus on issues of governance, reviewing the major upheaval of governance in many of the Bank’s borrowing countries in the 1980s, the legal constraints the Articles of Agreement impose on the Bank’s work on governance, and a brief overview of the Bank’s initial policy statement on governance issued to the Bank’s Board in June 1991. Section three reviews major Bank work on governance as reflected in successive World Development Reports and examines the Bank’s analysis of the issue of corruption, reviewing how the Bank’s thinking on this symptom of poor governance has evolved. Section four steps back to assess what the Bank got right and some of the issues it missed or failed to address adequately. Section five draws attention to the dramatic changes experienced by the developing world in these past 25 years, and points to the need to better understand the implications of these changes for the governance context facing developing countries.Publication Economic Governance Improvements and Sovereign Financing Costs in Developing Countries(World Bank, Washington, DC, 2021-05)Low- and middle-income country governments are increasingly tapping the global debt capital markets. This is increasing the amount of finance available for development, but at a considerably higher cost than traditional external borrowing on concessional terms. Using a novel methodology based on estimating sovereign credit ratings using the Moody’s scorecard, and examining the associations between these ratings and the World Bank’s Country Policy and Institutional Assessment scores, this paper examines how making improvements in the quality of economic policies and institutions can help lower governments’ financing costs. This method aims to overcome the small-sample problem due to the number of rated developing country sovereigns still being relatively limited (although growing). Better economic governance Country Policy and Institutional Assessment scores are associated with better estimated ratings and materially lower financing costs; on average, improvements that are sufficient to increase the Country Policy and Institutional Assessment economic governance indicator score by one point are associated with interest costs that are lower by about 40 basis points, even setting aside the direct impact on ratings of better governance indicators. There are many reasons why improving governance is a good thing. Among them is the potential payoff to the public purse — savings of $40 million or more on a standard $1 billion, 10-year bond.Publication Statistical Performance Indicators and Index(World Bank, Washington, DC, 2021-03)The World Bank’s Statistical Capacity Index has been widely employed to measure country statistical capacity since its inception two decades ago. This paper builds on the existing advantages of the Statistical Capacity Index, conceptually and empirically, to offer new statistical performance indicators and the Statistical Performance Index, which can better measure a country’s statistical performance. The new index has clearer conceptual motivations, employs a stronger mathematical foundation, and significantly expands the number of indicators and countries covered. The paper further provides empirical evidence that illustrates the strong correlation of the new index with other commonly used development indicators of human capital, governance, poverty, and inequality. The framework can accommodate future directions to improve the index as the global data landscape evolvesPublication Data Transparency and Growth in Developing Economies during and after the Global Financial Crisis(World Bank, Washington, DC, 2020-12)The study explores the effects of data transparency on economic growth for developing economies over a unique time period—at the onset of the 2007–2009 global financial crisis and thereafter. Data transparency is defined as the timely production of credible statistics as measured by the Statistical Capacity Indicator. The paper finds that data transparency has a positive effect on real gross domestic product per capita during a period of considerable uncertainty. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.