The European Commission has recently emphasized the importance of following sustainable and innovative strategies to assure, at the same time, food security and protection of natural resources (EC, 2012). Bio-economy-based food production could give useful basis to achieve, simultaneously, these aims. It assumes the production of renewable biological resources and their conversion (including by-products) into value added products such as food, feed, bio-based products and bioenergy (European Commission, 2012). Several studies have specifically investigated the use of agricultural residues as a secondary source of energy or raw material (Mirabella et al., 2014) and, most of them, have discussed farmers participation in bio-energy supply-chain (Altman et al, 2013, Cembalo et al, 2014b). Supply chains are grounded on agreements between two or more actors. In the case of by-product supply-chains, vertical integration and coordination between producers (buying companies) and farmers-food processing companies (suppliers) must be complemented with reciprocal cooperation and trust. Specific contracts can be activated in order to manage integration, coordination and cooperation. In this way, suppliers are more likely to participate to the supply chain (Abebe et al., 2013; Cembalo et al., 2014b). Integration through cooperation has been widely discussed in studies concerning the sustainable use of natural resources within bioenergy supply chains (Scarlat and Dallemand, 2011). Nevertheless, finding the best combination of contract aspects between buying companies and providers is still challenging (Meinzen-Dick et al., 2004; Cembalo et al., 2014b). The role of cooperation and contract design is then strategic for all the stakeholders. Thereby, in this paper we focused our attention on a ”contract” approach able to support both the development and management of a by-product supply chain. This approach assumes that a group of stakeholders (producers and transformers of by-products) assesses and chooses the possibility to participate in different ways to a development of a new supply chain. In particular, this paper empirically investigates the oil olive producers (millers) propensity to join a by-product supply chain for the valuable use of the residual olive cake after oil extraction and their preferences towards different contracts attributes. Indeed, the residual olive cake is generally drained on agricultural soil or dumped to landfill. However, to date several valuable options for their re-use are technologically feasible and include animal feedstuffs as well as bio-energy and biomass exploitation (Vega-Glvez et al., 2010). An ad hoc questionnaire was designed and submitted to a sample of 201 Sicilian (Italy) olive oil producers. Choice experiment approach was implemented to achieve the optimal design of contracts, identifying and valuing the preferences of oil olive producers in relation to the attributes of contracts implemented for enhancing their participation in the by product supply chain (Cembalo et al., 2014b). Around the 71% of the oil producers was interested in joining the proposed by-product supply-chain. The econometric model indicated that the oil producers preferred short contractual terms, the presence of a guaranteed minimum price, and possibility of future renegotiation.

Governance mechanisms to manage by-product supply chain

Pecorino Biagio;Chinnici Gaetano;D'Amico Mario
2017-01-01

Abstract

The European Commission has recently emphasized the importance of following sustainable and innovative strategies to assure, at the same time, food security and protection of natural resources (EC, 2012). Bio-economy-based food production could give useful basis to achieve, simultaneously, these aims. It assumes the production of renewable biological resources and their conversion (including by-products) into value added products such as food, feed, bio-based products and bioenergy (European Commission, 2012). Several studies have specifically investigated the use of agricultural residues as a secondary source of energy or raw material (Mirabella et al., 2014) and, most of them, have discussed farmers participation in bio-energy supply-chain (Altman et al, 2013, Cembalo et al, 2014b). Supply chains are grounded on agreements between two or more actors. In the case of by-product supply-chains, vertical integration and coordination between producers (buying companies) and farmers-food processing companies (suppliers) must be complemented with reciprocal cooperation and trust. Specific contracts can be activated in order to manage integration, coordination and cooperation. In this way, suppliers are more likely to participate to the supply chain (Abebe et al., 2013; Cembalo et al., 2014b). Integration through cooperation has been widely discussed in studies concerning the sustainable use of natural resources within bioenergy supply chains (Scarlat and Dallemand, 2011). Nevertheless, finding the best combination of contract aspects between buying companies and providers is still challenging (Meinzen-Dick et al., 2004; Cembalo et al., 2014b). The role of cooperation and contract design is then strategic for all the stakeholders. Thereby, in this paper we focused our attention on a ”contract” approach able to support both the development and management of a by-product supply chain. This approach assumes that a group of stakeholders (producers and transformers of by-products) assesses and chooses the possibility to participate in different ways to a development of a new supply chain. In particular, this paper empirically investigates the oil olive producers (millers) propensity to join a by-product supply chain for the valuable use of the residual olive cake after oil extraction and their preferences towards different contracts attributes. Indeed, the residual olive cake is generally drained on agricultural soil or dumped to landfill. However, to date several valuable options for their re-use are technologically feasible and include animal feedstuffs as well as bio-energy and biomass exploitation (Vega-Glvez et al., 2010). An ad hoc questionnaire was designed and submitted to a sample of 201 Sicilian (Italy) olive oil producers. Choice experiment approach was implemented to achieve the optimal design of contracts, identifying and valuing the preferences of oil olive producers in relation to the attributes of contracts implemented for enhancing their participation in the by product supply chain (Cembalo et al., 2014b). Around the 71% of the oil producers was interested in joining the proposed by-product supply-chain. The econometric model indicated that the oil producers preferred short contractual terms, the presence of a guaranteed minimum price, and possibility of future renegotiation.
2017
value creation, bio-economy strategy, contract attributes.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/20.500.11769/381518
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