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Food Value Chain Coordination in Practice: European and Australian Case Studies of the Creation of Chain Good Innovations

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  • Fleming, Euan
  • Griffith, Garry
  • Mounter, Stuart
  • Hartmann, Monika
  • Simons, Johannes

Abstract

Food value chain businesses form alliances with horizontal and/or vertical partners to take collective action to either overcome or ameliorate chain failure, or to take advantage of new opportunities available due to innovations in products or processes. The desired outcomes from the collective action would not be possible to achieve if these businesses acted independently. While such alliances and collaborations may take many forms, depending on the degree of commitment, the kind of governance and infrastructure linkages, they can often be thought of as “clubs” for the purpose of economic analysis. Several different types of clubs can be identified, thus the path to collective action chosen by clubs may vary according to existing capabilities and the scope for collaboration, particularly in relation to the potential for value-creating innovation. The result of the collective action is the provision of a chain good or service, which usually leads to greater and more valuable chain coordination. By collectively identifying, funding and acting to capture positive externalities associated with innovation, businesses in many parts of a food value chain can widen opportunities to increase whole-of-chain surplus as well as private profits. In this paper five mini-case studies are presented to demonstrate the breadth of past collective actions undertaken by businesses in food value chains, two in Europe and three in Australia. These are the Euro Pool System, and Global Standards certification in Europe and globally, as well as Meat Standards Australia, an Australian beef organic producer alliance (OBE Organic®), and the supply of food to households during Covid-19 lockdown in Australia. Each case study yields insights into the rationale of how businesses in different food value chains in different countries have acted as a club to use their joint resources to internalise positive innovation and coordination externalities.

Suggested Citation

  • Fleming, Euan & Griffith, Garry & Mounter, Stuart & Hartmann, Monika & Simons, Johannes, 2021. "Food Value Chain Coordination in Practice: European and Australian Case Studies of the Creation of Chain Good Innovations," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 12(03), September.
    • Handle: RePEc:ags:ijofsd:346657
    DOI: 10.22004/ag.econ.346657
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    References listed on IDEAS

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    1. Fleming, Euan & Griffith, Garry & Mounter, Stuart & Baker, Derek, 2018. "Consciously Pursued Joint Action: Agricultural and Food Value Chains as Clubs," 2018 International European Forum (163rd EAAE Seminar), February 5-9, 2018, Innsbruck-Igls, Austria 276879, International European Forum on System Dynamics and Innovation in Food Networks.
    2. Todd Sandler & John Tschirhart, 1997. "Club theory: Thirty years later," Public Choice, Springer, vol. 93(3), pages 335-355, December.
    3. Griffith, Garry R. & Rodgers, Heidi & Thompson, John M. & Dart, Cameron, 2009. "The aggregate economic benefits to 2007/08 from the adoption of meat standards Australia," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 17, pages 1-22.
    4. Griffith, Garry & Baker, Derek & Fleming, Euan & Mounter, Stuart & Malcolm, Bill & Umberger, Wendy, 2017. "146 Chain Failure and Chain Goods: Re-thinking Value Chain Upgrading and Promotion in Developing Countries," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 8(2), March.
    5. David Pannell & Anna Roberts, 2015. "Public goods and externalities: Agri-environmental Policy Measures in Australia," OECD Food, Agriculture and Fisheries Papers 80, OECD Publishing.
    6. Malcolm, Bill & Griffith, Garry & Mounter, Stuart & Fleming, Euan, 2017. "Chain Failure Theory as a Framework for Evaluating Horizontal and Vertical Strategic Alliances among Food Value Chain Participants: A Red Meat Industry Perspective," AFBM Journal, Australasian Farm Business Management Network, vol. 14, December.
    7. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
    8. Griffith, Garry R. & Thompson, John M., 2012. "The aggregate economic benefits to the Australian beef industry from the adoption of meat standards Australia: updated to 2010/11," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 20, pages 1-28.
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