Commodity Chains Essay ⋆ Environment Essay Examples ⋆ EssayEmpire

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A commodity chain is the connected path across which raw materials travel to become processed into finished goods, and eventually consumed. For example, coffee may move along a commodity chain from the site in Columbia, where it is grown by a peasant producer, through a buyer in Argentina, to a processing plant in Jacksonville, Florida, to a big box store in Des Moines, Iowa, where a consumer buys it and drinks it in Cedar Rapids. At each point along the chain, the coffee is physically transformed and value is added to the product. With each successive sale, an increasing profit is made; processors generally earn more than growers, retailers more than processors.

Commodity chains encapsulate systems of social and spatial relationships connecting production and consumption. They are comprised of linear “links” representing discrete, but interrelated, activities involved in the design, production, and marketing of a product. Commodity chains emphasize relationships between commodity processes, societal practices and the institutions and environments in which commodities and their meanings are produced and circulate. Two intellectual traditions have dominated: global commodity chains perspectives and systems of provision approaches.

Global Commodity Chains

The global commodity chain literature draws on the world systems theory. Much of the early global commodity chain literature analyzed agricultural and industrial commodities, depicting how commodities were produced in peripheral regions of the world for consumption by a core of countries. This literature has highlighted the organization of chains-and the power of institutional agents such as manufacturers, buyers, and distributors-to influence and maintain flows of materials, peoples and knowledge.

An important aspect of the global commodity chain literature has been the concept of governance, with chains characterized as buyer or producer-driven, depending on the type of firm that coordinates and/or controls relations along the chain. The growth of producer(or supplier-) driven chains is linked to the emergence of a Fordist regime of capital accumulation post World War II, facilitated by the provision of export processing zones and the import substitution policies of both developed and developing nations. Producer chains are typified by vertically integrated transnational corporations that are capitaland/or technology-intensive (such as automobiles, aircraft, and computer firms). In contrast-in buyer-driven chains-retailers, marketing and branded manufacturers govern supply, and/or production of commodities, often through decentralized production networks. Buyer-driven chains have been associated with labor-intensive and consumer goods industries such as apparel, footwear, toys, and consumer electronics. Their rapid growth since the 1960s is a part of a general transformation from “manufacturer shift” to “consumer pull” assisted by a shift in the industrial strategies of developing countries from import substitution to export-oriented growth, and encouraged by neoliberal government policies and International Monetary Fund and World Bank policies. Buyer-driven chains have attracted much controversy because industrial production has frequently occurred in areas of lowcost labor, with minimal environmental standards or working conditions, and poorly unionized workers. In buyer chains, control of flows of information, skills, products, logistics, marketing, and design and branding remains in the core countries.

While the global commodity chain literature has emphasized the political economy of production and consumption links, research on food and agricultural commodity systems, the French Filiere tradition, and “systems of provision” examines the transformations (and trajectories) of the commodities themselves and the systems, social relations, and sites that shape their flows. These approaches accommodate material and symbolic constructions of commodities, highlighting how chains for different commodities are constituted and expressed very differently, a consequence of the composition of the “systems” of production, circulation distribution, and consumption in which they are located.

The distinction between the global commodity chain and systems of provision approaches has become increasingly blurred. Both are useful for understanding how commodities connect people and places at a range of scales and for examining the political, social, and environmental expressions of chain formation in contemporary and historical contexts. Many social and environmental justice movements and organizations draw on the chain metaphor to emphasize connections between producers and consumers, and their practices to evoke consumer activism and to change government policy, and/or corporate practices. A politics of connection is also evident in the establishment of fair-trade commodity chains, and in the sale of commodities which make “ethical” or environmentally sustainable forms of production explicit.

Examinations of chains have been used to establish positions on academic and popular debates about globalization, sustainability, free trade, and the power of transnational corporations. There has also been controversy over the environmental expression of commodity chains. For example, in agro-food commodity chains, European consumers can contribute to land degradation in the form of over-cropping in Africa, and consumer preference for fast food and can be linked to air and water pollution through intensive agriculture. Following a commodity chain beyond purchase also discloses environmental consequences-the disposal of inorganic waste, for example, poses a significant environmental challenge.

The increasing complexity of a globalizing world has challenged the commodity chain as a model for understanding connections between production, consumption and place. Commodity chains have also been criticized for positioning consumption as a consequence of production, yet they remain a powerful metaphor for academic and populist understandings of production and consumption linkages, and the social and environmental contexts in which these occur.

Bibliography:

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William Friedland, “Commodity Systems Analysis: An Approach to the Sociology of Agriculture,” Schwazweller, ed., Research in Rural Sociology of Agriculture (JAI Press, 1984);
Gary Gereffi, “Beyond the Producer-Driven/Buyer-Driven Dichotomy,” IDS Bulletin (v.32, 2001);
Gary Gereffi and Michael Korzeniewicz, , Commodity Chains and Global Capitalism (Green-wood Press, 1994);
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Goodman and E.M. Dupuis, “Knowing Food and Growing Food: Beyond the Production-Consumption Debate in the Sociology of Agriculture,” Sociologia Ruralis (v.42, 2002);
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Silvey, “Sweatshops and the Corporatization of the University,” Gender, Place and Culture (v.9, 2002).