Not all supply chains are created equal: The linkages between soy local trade relations and development outcomes in Brazil

Tiago N.P. dos Reis, Mairon G. Bastos Lima, Gabriela Russo Lopes and Patrick Meyfroidt

World Development, 2024, vol. 175, issue C

Abstract: Global agricultural trade is a key driver of socioenvironmental transformations in rural areas, including development dynamics. By creating revenue and wealth opportunities, it influences the economic and social relations in a landscape. However, not all landscapes shaped by a given agricultural sector are the same: one variable is how supply chain actors and their embedded networks (including commodity traders, farmers, and input suppliers) develop, maintain, or shift relationship patterns over time. To explore the connections between development and the nature of such trade relationships, particularly between farmers and commodity traders, we take soy as an emblematic example and compare four different municipalities in Brazil. The contrasting cases are Passo Fundo (RS), an old soy-growing area in Brazil’s South, in a consolidated agricultural region with relatively persistent relationships between farmers and commodity traders; Sorriso (MT), in a more recently occupied agricultural region in the country’s Center-West, with relatively low persistence of supply-chain relations; Balsas (MA), a place with persistent supply-chain relations in the so-called Matopiba agricultural expansion frontier; and Bom Jesus (PI), also a frontier municipality but having less persistent relations. We build on quantitative assessments of supply-chain stickiness in those four municipalities, which is understood as the persistence of those commercial relationships in contrast to volatility. Analyzing qualitative data collected through over 30 field interviews with local actors, we show how soy supply-chain relations significantly differ across places. We distinguish them particularly in terms of lock-in effects on farmers and level of trust. Crucially, our findings identify supplier cooperatives as key mediating institutions in the supply chain, counterbalancing the power of commodity traders over farmers. Such cooperatives are also associated with more equitable development outcomes. Yet, they require high levels of social trust and distribute wealth primarily within the sector, leaving other farmers excluded.

Keywords: Stickiness; Commodity supply chains; Social networks; Soy trade; Rural development; Cooperatives; Latin America (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:175:y:2024:i:c:s0305750x23002930

DOI: 10.1016/j.worlddev.2023.106475

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