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Contracting arrangements in agribusiness procurement practices in South Africa
- Source :
- Agrekon. 47:198-221
- Publication Year :
- 2008
- Publisher :
- Informa UK Limited, 2008.
-
Abstract
- This paper presents an overview of contracting arrangements in agribusiness procurement practices in South Africa. The objective of this paper is to contribute to a better understanding of the structures and issues of raw commodity procurement in South African agribusiness supply chains. The results suggest that a wide range of institutions are employed to procure raw commodities for the South African agroprocessing sector and that companies are increasingly moving away from the open market as a source of supply for raw commodities, and are utilising contractual arrangements instead. According to the main findings, 78.5% of the total volume of fruit and vegetables procured by agribusiness companies for processing is based on some form of contracting arrangement. The balance is procured through a combination of the open market, own estates, agents and imports. It is only in the case of potatoes, onions, beans and peanuts that a stronger reliance on the spot market is evident. South African retailers source 70% to 100% of their fresh produce directly from farmers (usually through growing programmes). The procurement of meat, poultry and eggs appears to favour vertical integration (and in some cases own production), medium- to long-term contracts and long-term ‛informal’ supply arrangements with selected groups of farmers.
- Subjects :
- Economics and Econometrics
Supply chain
Geography, Planning and Development
Commodity
Spot market
Procurement, contracting, agro-processing
Vertical integration
Agricultural economics
Commerce
Procurement
Open market operation
Economics
Production (economics)
Agronomy and Crop Science
Agribusiness
Subjects
Details
- ISSN :
- 20780400 and 03031853
- Volume :
- 47
- Database :
- OpenAIRE
- Journal :
- Agrekon
- Accession number :
- edsair.doi.dedup.....28c6208ecb78cc849f31aee1c91faca0