Regional Markets

Regional Markets for Local Development
al. (2005) was a seminal piece that established a set of possible models for structuring
value chains. Several variables were outlined as crucial for determining the path of
development of the value chain: the complexity of transactions taking place between
actors in the chain, the codification of these transactions, and the capabilities of the
actors in the supply base.
When one considers local markets, regional value chains, food commodity crops and
small-scale producers, the expectation is to find relatively simple and well codified
transactions as well as high supply capacity. In other words, a large number of producers
engaged with a large number of traders and processors in a market-based (or spot
market) model of a value chain (see also Chapter 2). This multiplicity of actors was also
observed in the field cases, even though sometimes only a limited number of traders,
processors and/or well-organised farmers groups was involved at the procuring end of
the chains.
However, the theory does not accommodate this variety. Gereffi et al. provide for only
one model of governance where the complexity of transactions is low and the ability for
codification high. They do not provide for a case where the complexity of transactions is
low, but where there is no tendency for codification, as in an agricultural spot market for
food commodities in a local/regional market in Africa. The rest of their argumentation
is based on analysis of situations where there is only one or a few turn-key suppliers of
a certain product, i.e. a (quasi-) monopoly. In such situation one can indeed standardise
(codify) production processes to make transactions less complex (vertical chain coordination).
This reflects their orientation towards industrial production processes.
In agricultural chains in Africa, the conditions are far more diverse. Theoretically, this
is breaking new ground in this area: not only are there many customers who are dealing
with producers at spot markets, but also numerous traders/processors, positioned
at different points along the chain with various degrees of control. We have seen that
there is a systematic difference between the cases that are more narrowly focused on
food commodities and those that are more focused on food cash crop commodities. The
‘governance matrix’ (see Table 1.1) together with the graphs/figures presented in this
chapter after each section describing the different dimensions (gender, food security,
innovation, etc.) form the basis of the discussion we will present here (see Figure 4.10).
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