Governance and upgrading in South–South value chains: evidence from the cashew industries in India and Ivory Coast

Abstract

India, the world's largest processor of cashew kernels, depends heavily on imports of raw cashew nuts (RCNs), primarily sourced from Ivory Coast. While the Ivorian processing industry is still in its infancy, in the last decade domestic cashew factories have rapidly increased their capacity. This study is an exploration of how the cashew value chain is organized and what this implies for upgrading prospects in the Ivorian cashew sector. Its findings suggest that the cashew value chain is characterized by a bipolar governance structure comprising a trader‐driven segment between Ivorian farms and Indian processors, and a buyer‐driven segment that links processors to Northern end markets. The results are consistent with studies that describe South–South value chains as being less tightly controlled, with a decreased significance of quality related standards and lower entry barriers than those chains feeding into Northern end markets. Inter‐firm linkages in the Indo–Ivorian RCN channel provide few opportunities for product and functional upgrading of RCN suppliers. Considerable institutional support is needed to overcome the barriers to Ivorian firms' direct participation in the North–South value chain for processed kernels.

Global value chains and the rise of the Global South: unpacking twenty‐first century polycentric trade

“…Building on previous work on bipolarity (Fold 2002), they suggest a spectrum from unipolar to multipolar (explicitly shaped by various powerful actors) to characterize a whole chain. In a recent example, Tessmann (2017), focusing on the trade in cashew nuts, highlights the contrast between the lower, trader-driven South-South tier of undifferentiated raw material trade between Indian processors and exporters from the Ivory Coast and the buyer-driven linkage involving quality products between India and the Northern end market. Multi-polar governance is helpful in pointing to different forms of governance between different nodes in a chain, and towards increased complexity and variation.…”

The long-term performance of 35 tree species of sudanian West Africa in pure and mixed plantings

“…Indeed, the Guinean forests located further south are highly degraded and are no longer sufficient to supply domestic markets (Sulaiman et al, 2017). At present, these secondary vegetations are also subject to conversion to Cashewnuts plantations (Temudo and Abrantes, 2014;Tessmann, 2017).…”

Global value chains and policy practice: The making of linkages in the Ivorian cashew industry

“…This is why many commodity traders are registered in Asian financial hubs where they benefit from preferential access to credit. This allows them to occupy a powerful position in the ‘trader-driven’ RCN value chain between African producers and Asian processors (Tessmann, 2018). In the Ivory Coast, for example, the Singapore-based commodity trader OLAM accounts for up to 25% of RCN purchases.…”