Explaining the stickiness of supply chain relations in the Brazilian soybean trade.
Tiago N.P. dos Reis, Vivian Ribeiro, Rachael D.Garrett, Tobias Kuemmerle, Philippe Rufin, Vinicius Guidotti, Pedro C. Amaral, Patrick Meyfroidt.
Summary:
Supply chain stickiness refers to the stability of trade relationships, affecting land use, deforestation and rural development outcomes. Here we found the main factors determining local stickiness in Brazil’s soy supply chain. They include soy processing infrastructure, export-orientation of production, farm-gate price volatility and other context-specific factors that can explain the occurrence of stickiness as a supply chain phenomenon with relevant consequences for social and environmental conditions in producer regions.
Abstract:
The global trade of agricultural commodities has profound social-ecological impacts, from potentially increasing food availability and agricultural efficiency, to displacing local communities, and to incentivizing environmental destruction. Supply chain stickiness, understood as the stability in trading relationships between supply chain actors, moderates the impacts of agricultural commodity production and the possibilities for supply-chain interventions. However, what factors determine stickiness, that is, how and why farmers, traders, food processors, and consumer countries, develop and maintain trading relationships with specific producing regions, remains unclear. Here, we use data on the Brazilian soy supply chain, a mixed methods approach based on extensive actor-based ieldwork, and an explanatory regression model, to identify and explore the factors that influence stickiness between places of production and supply chain actors. We find four groups of factors to be important: economic incentives, institutional enablers and constraints, social and power dimensions, and biophysical and technological conditions. Among the factors we explore, surplus capacity in soy processing infrastructure, (i.e., crushing and storage facilities) is important in increasing stickiness, as is export-oriented production. Conversely, volatility in market demand expressed by farm-gate soy prices and lower land-tenure security are key factors reducing stickiness. Importantly, we uncover heterogeneity and context-specificity in the factors determining stickiness, suggesting tailored supply-chain interventions are beneficial. Understanding supply chain stickiness does not, in itself, provide silver-bullet solutions to stopping deforestation, but it is a crucial prerequisite to understanding the relationships between supply chain actors and producing regions, identifying entry points for supply chain sustainability interventions, assessing the effectiveness of such interventions, forecasting the restructuring of trade flows, and considering sourcing patterns of supply chain actors in territorial planning.
Link to the manuscript: https://doi.org/10.1016/j.gloenvcha.2022.102633
Citation: Tiago N.P. dos Reis, Vivian Ribeiro, Rachael D. Garrett, Tobias Kuemmerle, Philippe Rufin, Vinicius Guidotti, Pedro C. Amaral, Patrick Meyfroidt, Explaining the stickiness of supply chain relations in the Brazilian soybean trade, Global Environmental Change, Volume 78, 2023, 102633, ISSN 0959-3780