Governance in Agricultural Value Chains in Tamaulipas, Mexico: The Cases of Soybean, Sorghum, Sugar Cane and Rice.

The agricultural value chains in Mexico from a governance perspective, constitutes a type of value chain not widely studied. The objective of this paper is to identify the typology of governance in four of the most important agricultural value chains in northeast Mexico, and compare them by determining how the value is distributed along the chain, and the nature of their business processes, in each chain and as a whole. 

The agriculture products have few links in the regional chains due to the condition of producing and selling their production without further industrial elaboration. Other products such as the sugar cane and rice, despite they have a less contribution to the national production, maintain processes of value aggregation in the region, and therefore more complex value chains with more links to industrial transformation.

The research was conducted base of Gereffi’s works (1994; 2005) with a conceptual section for global commodity chains, that allows to define governance by the identification of the agents that carry out functional integration and the coordination of disperse activities, specifying and monitoring the configuration of the inter relations between actors, and at the time, acting over the competitive performance of local agents by eventual stimulus or restrictions which are placed by those who maintain control over global chains.

The obtained results allowed to identify that sugar cane and rice value chains are buyer-driven. In these two cases, the industrialist is the only buyer of raw material in the chain, on a type of monopsony market. The consequences of this type of market explain the influence of the industrialist over the prices and value distribution along the chain.

From a perspective of governance, the sugar cane and rice value chains are hierarchical. The link industry is controlled by a sole company, integrated vertically that maintains control relations over the rest of the companies that participate in the chain. The control of the link (company/industry) is executed through different mechanisms. One of them is indebtedness, due to the role of supply provider to the producers. Therefore, the rule over the chain is retained by the industrialist that allows to appropriate of a major proportion of the value generated in the same chain.

Lastly, in the analyzed chains base on its governance, it is possible to conclude that those chains which have a type of hierarchical and controlled by links from the outside, as the soybean and sorghum chains, it is not promoted the creation of productive structurers integrated to global value chains. Evidence shows that producers have not been capable to develop these “superior capabilities” that bring to be incorporated into a global chain, meaning that while they can be progressively develop improvements (upgrading) in terms of technological integration (productivity, yields, quality) depending of a sort of “productive fix”, this does not occur or stimulate effects of value aggregation or value distribution, in order to encourage investment in the first and second transformation, and as a consequence for the development of products and its trading.