Coordination as a competitive factor: the Peruvian blueberries agribusiness system case

Abstract

Highly healthy fruits, such as blueberries, have seen increasing demand in both traditional and emerging markets in recent years. Peru, a farmer of high-value fresh fruits and vegetables in the southern hemisphere, began exporting blueberries in 2010, becoming the main exporter of this product. The Peruvian blueberry agribusiness system maintains an effective level of coordination between the different economic actors of the production system. For this reason, the objective of this work was to evaluate the level of coordination between the actors of the blueberry agribusiness system that allowed the competitive positioning of Peru in the international market. The theoretical approach used is the Transaction Cost Economics framework, and the methodology consists of an analysis of transactions through the evaluation of governance structures, attributes of transaction and levels of transaction cost. Primary and secondary sources are used for the collection of study data. The results show a high level of coordination between the actors from the existence of the vertical integration structures in the production-packaging-distribution stages of the agribusiness system. This organizational structure was designed by the large blueberry farmers to optimize coordination, make productive operations effective and minimize transaction costs. Investment in specific assets is high, in relation to assets of the temporal, physical and human type. Therefore, the vertical integration -forward- of the farmers safeguards their investments and reduces uncertainty in terms of sales price and product quality, depending on market demand. On the other hand, there is also an efficient coordination relationship between suppliers of inputs and technology, medium and small farmers, packers, wholesale and retail distributors. The predominant organizational structure among these actors is the formal contract, which allows safeguarding investments from the production stage and reducing uncertainty in terms of product quality during marketing. It is concluded that the high level of coordination is a competitive factor of the blueberry agribusiness system in Peru, since the coordination mechanisms developed by the actors allow reducing exchange costs and market uncertainty. The high level of coordination between the actors has boosted exports and consolidated Peru's position as an important player in the commercialization of fresh blueberries worldwide.