Rich consumers and poor producers: Quality and rent distribution in global value chains
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International Food Policy Research Institute
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In recent years, quality standards have become crucial for developing countries’ agricultural production systems in gaining access to high-value markets abroad or at home. High-value supply chains offer opportunities for high profits, but in order to comply with the required standards, suppliers in developing countries often need extensive support from agrifood companies. We use a theoretical model to investigate under which conditions such synergies between suppliers and agrifood companies are sustainable, and how created rents are distributed, in a context of factor market imperfections and weak contract enforcement. We also derive the implications of development.
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contract farming, enforcement, development, high-value agricultural products, globalization, markets