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Managing the value of new‐trait varieties in the canola supply chain in Canada

Peter W.B. Phillips (Professor in the Department of Agricultural Economics, University of Saskatchewan, Saskatoon, Canada)
Stuart Smyth (PhD Candidate, in the Department of Agricultural Economics, University of Saskatchewan, Saskatoon, Canada)

Supply Chain Management

ISSN: 1359-8546

Article publication date: 1 September 2004

Abstract

Identifies the drivers, classifies the structures, examines the governance systems and estimates the relative economic costs and benefits of various identity‐preserved production and marketing (IPPM) systems that have evolved in the Canadian canola industry. The systems vary significantly, depending on whether they are managing input‐ or output‐based, traditionally bred or biotechnology‐based traits. Combines transaction costs and principal‐agent theory in a synthesized transaction cost‐agency model that allows for predictions regarding the organizational form of vertical integration based on the degree of asset specificity, task programmability and non‐separability. Transactions for new, proprietary, novel‐trait canola varieties require a more extensive set of institutions than traditional varieties. Identity‐preserved production and marketing systems appear technically feasible for smaller units of production, but it is unclear whether they are economically viable for long‐term or larger‐scale operations. IPPM systems can provide an effective and proven method of controlling risks and liabilities.

Keywords

Citation

Phillips, P.W.B. and Smyth, S. (2004), "Managing the value of new‐trait varieties in the canola supply chain in Canada", Supply Chain Management, Vol. 9 No. 4, pp. 313-322. https://doi.org/10.1108/13598540410550064

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited