Agri-Supply Chain Management To Stimulate Cross-Border Trade in Developing Countries and Emerging Economies

November 25, 2006 |

Agri-Supply Chain Management To Stimulate Cross-Border Trade in Developing Countries and Emerging Economies

Jan van Roekel, Sabine Willems, and Dave M. Boselie

Summary

Market liberalization and increasing consumer demand in OECD countries offer attractive opportunities for agricultural exporters from developing countries. Trade in fishery products, exotics, pre-cut products, organic products and off-season fresh fruits and vegetables extend altogether new options for businesses. Yet, global market standards are stringent. Consumers in these countries and in urban areas in developing and transition economies demand safe and nutritional food, excellent quality and just-in-time delivery. This presents major challenges to producers and countries that lack state-of-the-art technologies and infrastructure. Particularly for producers in these countries, collaboration between trade partners has become increasingly important for the success of cross-border trade in the competitive market.

Supply chain management is a powerful tool to achieve this collaboration. Through supply chains, producers in developing countries and emerging economies can access market information and knowledge to hone their value-added activities. Developing cross-border supply chains is complex, however, and requires information and expertise about how to build chains, as well as communication and commitment from all the chain partners. The advantages of supply chain management are numerous, like the reduction of product losses, increase in sales, reduction of transaction costs, a better control of product quality and safety and the dissemination of technology, capital and knowledge among the chain partners. Supply chain management tools have been developed and implemented throughout the chain to guarantee optimal chain performance.

Supply chain development not only benefits the private sector but also creates spin-offs that stimulate social, economical and environmental sustainable development in the region (employment generation, added value, decreases of product losses, etc.). Public support (e.g. development of the institutional infrastructure) plays an important role to create an enabling environment for private sector development. Public support might take the form of a public private partnership in a supply chain to share experiences, risks and bottlenecks. In developing countries and emerging economies, however, supply chain development is often hampered due to lack of governmental support. International organizations can assist these governments to upgrade cross-border trade and to link national and international partners to jointly tackle crossborder trade obstacles. Institution building, raising awareness, pilot chain projects and the development of a toolkit are important activities to foster supply chain development.

This paper reviews issues of the development of supply chains with special emphasis on challenges for developing countries. Three cases of cross-border supply chain pilot projects are described in this paper. These cases show factors for success and risks for supply chain development. Trust, commitment and transparency among the chain partners are important success factors for supply chain collaboration. Social and cultural differences between the chain partners, as well as hidden agendas, can lead to slow down of chain performances. The cases also indicate that certain aspects of chain development (e.g. food safety and social accountability) touch upon the responsibility and mandates of both public and private agents. Public-private partnerships are therefore indispensable in these areas.

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