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Quality and Inclusion of Producers in Value Chains: A Theoretical Note

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  • Thijs Vandemoortele
  • Scott Rozelle
  • Johan F.M. Swinnen
  • Tao Xiang

Abstract

This paper develops a formal theory of the endogenous process of the introduction of high quality products in developing countries. Initial differences in income and capital and transaction costs are shown to affect the emergence of and the size of the high quality economy. Initial differences in the production structure and the nature of transaction costs "C as well as the possibility of contracting between producers and processors "C are shown to determine which producers are included in the high quality economy, and which not.

Suggested Citation

  • Thijs Vandemoortele & Scott Rozelle & Johan F.M. Swinnen & Tao Xiang, 2009. "Quality and Inclusion of Producers in Value Chains: A Theoretical Note," LICOS Discussion Papers 24609, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:24609
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp246.pdf
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    2. repec:oup:revage:v:30:y:2008:i:3:p:460-468. is not listed on IDEAS
    3. Philippe Marcoul & Luc Veyssiere, 2010. "A Financial Contracting Approach to the Role of Supermarkets in Farmers' Credit Access," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1051-1064.
    4. Elizabeth M. M. Q. Farina & Thomas Reardon, 2000. "Agrifood Grades and Standards in the Extended Mercosur: Their Role in the Changing Agrifood System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1170-1176.
    5. Eswaran, Mukesh & Kotwal, Ashok, 1985. "A Theory of Two-Tier Labor Markets in Agrarian Economies," American Economic Review, American Economic Association, vol. 75(1), pages 162-177, March.
    6. Unnevehr, Laurian J., 2000. "Food safety issues and fresh food product exports from LDCs," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 23(3), September.
    7. Maertens, Miet & Swinnen, Johan F.M., 2009. "Trade, Standards, and Poverty: Evidence from Senegal," World Development, Elsevier, vol. 37(1), pages 161-178, January.
    8. Johan F.M. Swinnen & Thijs Vandemoortele, 2008. "The Political Economy of Nutrition and Health Standards in Food Markets ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 460-468.
    9. Miet Maertens & Liesbeth Colen & Johan F. M. Swinnen, 2011. "Globalisation and poverty in Senegal: a worst case scenario?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(1), pages 31-54, March.
    10. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
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    Cited by:

    1. Maertens, Miet & Swinnen, Johan, 2015. "Agricultural trade and development: A value chain perspective," WTO Staff Working Papers ERSD-2015-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Schuster, Monica & Maertens, Miet, 2013. "Do private standards create exclusive supply chains? New evidence from the Peruvian asparagus export sector," Food Policy, Elsevier, vol. 43(C), pages 291-305.
    3. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    4. Vandeplas, Anneleen, 2011. "Multinationals or Cooperatives: Does it Matter to Farmers? - A Study of the Dairy Sector in Punjab (India)," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115545, European Association of Agricultural Economists.
    5. Anneleen Vandeplas & Bart Minten, 2015. "Food quality in domestic markets of developing economies: a comparative study of two countries," Agricultural Economics, International Association of Agricultural Economists, vol. 46(5), pages 617-628, September.
    6. Johan Swinnen, 2014. "Global Agricultural Value Chains, Standards, and Development," RSCAS Working Papers 2014/30, European University Institute.

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