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Ownership versus management: the role of farming networks in Argentina

In: International Food and Agribusiness Management Review
Authors:
Sebastián I. Senesi Director, Department of Institutions, Organizations and Strategy, Food and Agribusiness Program, Agronomy School, University of Buenos Aires, Av. San Martín 4453, Ciudad Autónoma de Buenos Aires (C1417DSE), Argentina

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Marcos F. Daziano Researcher/Consultant, Department of Institutions, Organizations and Strategy, Food and Agribusiness Program, Agronomy School, University of Buenos Aires, Av. San Martín 4453, Ciudad Autónoma de Buenos Aires (C1417DSE), Argentina

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Fabio R. Chaddad Associate Professor, University of Missouri and INSPER, 125 Mumford Hall, Columbia, MO 65211-6200 USA

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Hernán Palau Researcher, Department of Institutions, Organizations and Strategy, Food and Agribusiness Program, Agronomy School, University of Buenos Aires, Av. San Martín 4453, Ciudad Autónoma de Buenos Aires (C1417DSE), Argentina

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Online Publication Date:
08 Mar 2017
Open Access

Agroholdings are ‘horizontally and vertically integrated agricultural and agribusiness enterprises, which often have an explicit holding structure consisting on quite a number of legal entities’. This might be true in the countries the authors evaluated, but it certainly is not the case in Argentina, where horizontal and vertical coordination (rather than integration) is the norm. During the last 25 years the institutional environment impacted the way farming is organized in Argentina, mainly by using contracts between different players and service providers. The agricultural production sector increasingly shifted from a low to medium and to a large-scale business model, and production units expanded horizontally by means of land leases (coordination) and purchases (integration) in order to increase the scale of production and dilute fixed costs in an attempt to generate higher margins. In that sense this paper arises four questions: (1) why is it that in Argentina large-scale farming is predominantly done via contracts instead of vertical and horizontal integration?; (2) why have large-scale farming networks recently stalled or even declined in terms of area growth?; (3) how and why do these networks vary their scale of production, locations and strategies?; and (4) what can we expect in terms of evolution of different types of large-scale farming? It is observed that in Argentina there were different institutional contexts, sometimes with clearer and more stable conditions and low levels of uncertainty, sometimes with higher intervention policies and transaction costs. The paper discusses how new organizations emerged during different periods and scenarios, in a context of increased international demand for agricultural commodities. The most relevant conclusions drawn from this analysis are that, in Argentina’s agriculture, there is a continuous shift from ownership to management, although consolidation towards larger scale entities has slowed down due to the existence of institutional and policy restrictions.

Title:
Ownership versus management: the role of farming networks in Argentina
Article Type:
Review Article
DOI:
https://doi.org/10.22434/IFAMR2016.0030
Language:
English
Pages:
221–238
Keywords:
hybrid forms; agroholdings; innovation; institutions; adaptation
In:
International Food and Agribusiness Management Review
In:
Volume 20: Issue 2
Received:
18 Feb 2016
Accepted:
17 Dec 2016
Publisher:
Wageningen Academic
E-ISSN:
1559-2448
Subjects:
General, Life Sciences, Agribusiness & Rural Studies, Food & Health

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