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Not all supply chains are created equal: the linkages between soy local trade relations and development outcomes in Brazil

The article highlights how supply chain actors are embedded in unique material and immaterial networks. The authors analyze the different relations that exist among farmers, and between farmers and traders in Brazil’s soy sector. The article reveals the various arrangements that exist and can be promoted for more balanced relations between farmers and traders.

Mairon G. Bastos Lima / Published on 22 December 2023

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Reis, T. N. P., Bastos Lima, M. G., Russo Lopes, G., & Meyfroidt, P. (2024). Not all supply chains are created equal: The linkages between soy local trade relations and development outcomes in Brazil. World Development, 175, 106475.

Combine loads soybean in a truck

A combine harvester loading a truck with soybean grains, Sorriso, Mato Grosso, Brazil.

Photo: Lucas Ninno / Getty Images

Global agricultural trade is a key driver of socioenvironmental transformations in rural areas, including development dynamics. By creating revenue and wealth opportunities, it influences the economic and social relations in a landscape. However, not all landscapes shaped by a given agricultural sector are the same: one variable is how supply chain actors and their embedded networks (including commodity traders, farmers, and input suppliers) develop, maintain, or shift relationship patterns over time.

To explore the connections between development and the nature of such trade relationships, particularly between farmers and commodity traders, the authors take soy as an emblematic example and compare four different municipalities in Brazil. The contrasting cases are Passo Fundo (RS), an old soy-growing area in Brazil’s South, in a consolidated agricultural region with relatively persistent relationships between farmers and commodity traders; Sorriso (MT), in a more recently occupied agricultural region in the country’s Center-West, with relatively low persistence of supply-chain relations; Balsas (MA), a place with persistent supply-chain relations in the so-called Matopiba agricultural expansion frontier; and Bom Jesus (PI), also a frontier municipality but having less persistent relations.

The authors build on quantitative assessments of supply-chain stickiness in those four municipalities, which is understood as the persistence of those commercial relationships in contrast to volatility. Analyzing qualitative data collected through over 30 field interviews with local actors, they show how soy supply-chain relations significantly differ across places. The authors distinguish them particularly in terms of lock-in effects on farmers and level of trust. Crucially, their findings identify supplier cooperatives as key mediating institutions in the supply chain, counterbalancing the power of commodity traders over farmers. Such cooperatives are also associated with more equitable development outcomes. Yet, they require high levels of social trust and distribute wealth primarily within the sector, leaving other farmers excluded.

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SEI author

Mairon G. Bastos Lima
Mairon G. Bastos Lima

Senior Research Fellow

SEI Headquarters

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World Development Open access
Topics and subtopics
Economy : Supply chains
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