Turning Global Value Chains upside down? Governing agricultural production through the supplier-driven fertilizer GVC

Authors: Gideon Hartmann*, University of Cologne, Daniel Wilson Ndyetabula, Sokoine University of Agriculture, Peter Dannenberg, University of Cologne
Topics: Economic Geography, Food Systems, Africa
Keywords: GVC, agriculture, Tanzania, Africa
Session Type: Virtual Paper
Day: 4/7/2021
Start / End Time: 1:30 PM / 2:45 PM
Room: Virtual 42
Presentation File: No File Uploaded

The global value chain (GVC) literature revolts around buyer-driven governance to explain how lead firms control disaggregated production processes. This holds especially true for agro-industrial GVCs. Despite having thereby explained with what outcomes buying lead firms externalize and govern agricultural production through GVCs, the predominant notion of governance from downstream end (global buyers) towards upstream end (farmers) fails to account for the rising role of global input suppliers.
Unprecedented and rapid mergers and acquisitions in the agrarian inputs industry have fueled growing potentials of governing agricultural production also from the upstream. The rise of supplier-driven governance repositions farmers in GVCs from sole producer function towards constituting also crucial customer bases. In this sense, the ongoing consolidation of supplier lead firms turns GVCs upside down as governance is no longer solely exerted from the downstream end.

We ask therefore what happens when GVCs are “turned upside down”. Drawing from insights into the North-South GVC for synthetic fertilizer, we show how the Norwegian lead firm YARA International assembles its GVC to reach Tanzanian farmers. Extensive intra- and extra chain practices serve Yara to forge favorable dyadic and collective actor constellations. Ultimately, these constellations allow Yara to exert direct and diffuse power over and even beyond the production process as farmers align their agricultural practices with Yara’s need to sell fertilizer.

Turning GVCs upside down contributes to scrutinize the rise of supplier-driven governance in agro-industrial GVCs. This helps to understand for whom GVC integration “works” without essentializing the role of down-stream lead firms.

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