Exploring a New Form of Horizontal Coordination to Improve Economic Sustainability of the Soft Wheat Chain in the Northwest of Italy

Abstract

The Italian legal framework for the agricultural sector has recently introduced a new form of contract, the “network contract”. The aim of this study is to verify if the use of this new contract would be appropriate to facilitate the adoption and diffusion of sustainable innovation of an Italian agri-food chain and to strengthen the agricultural role with dealing food processing companies. We focus on Piedmont, an Italian region where a soft wheat supply chain is in continuing evolution but is still very fragmented; indeed the two Producers Organization and one Consortium specialized in grain storage and trade only work around 30% of the grain produced annually. Following the framework of transaction cost we carried out a survey using semi-structured interviews as a qualitative analysis tool to gather the opinions of the primary operators in the Piedmont soft wheat supply chain. Initial results suggest that there is still an unsatisfactory horizontal coordination in the supply chain and that the network contract still seems to be little known and appreciated. However operators of the production stage of the chain consider the goals of improving the quality of the wheat and the economic and environmental sustainability very important but they think it would be difficult to achieve them simultaneously.