The Economics of Vertical Coordination in the Organic Wheat Supply Chain

1
The Economics of Vertical Coordination in the
Organic Wheat Supply Chain

• Shon Ferguson
• Thesis Defense
• University of Saskatchewan
• Sept 29, 2004

2
The Beginning

• Idea
• Compare the profitability of different governance
  structures in the organic grain supply chain
• Started with brainstorming by Simon Weseen and
  Richard Gray

3
Why I Chose the Topic

• Interested in questions of organization
• Interested in empirical studies
• Research potential for organic food supply chains
• In their infancy
• Issues of information asymmetry

4
Challenges

• Developing a method of comparison
• Developing the organic producer survey
• Conducting the survey

5
Novel Traits

• Empirical Comparison of governance structures
• Analysis of price dispersion
• Quantification of transaction costs

6
Interesting Results

• The POF performed well for producers
• Price dispersion for the POF was not lower
• Possible further research
• Direct transactions performed poorly

7
Research Opportunities

• Incorporate quantity into analysis
• Important when marketer data is available
• Effect of risk
• Risk premium
• Efficient risk-sharing
• Residual analysis
• More rigorous
• Determinants of marketing choice for organic
  wheat producers