Commodity Chains

The Commodity Chain Framework

The concept of commodity chains first emerged in Immanuel Wallerstein’s world systems theory, defined as a network of labor and production processes whose end result is a finished commodity. However, as an analytical tool, the framework was initially elaborated by the sociologist Gary Gereffi for the study of industrial products. It enabled researchers to focus on the interlinking of products and services in a sequence of value-added activities; the spatial configuration of enterprises constituting production and marketing networks; and the power relations that determine how resources are allocated along the commodity chain. The framework illuminated the sets of interorganizational networks clustered around one commodity or product, linking households, enterprises, and states to one another within the world economy. Over time, the commodity chain framework was increasingly applied to agrifood products, and a rich and varied scholarly literature has emerged on the topic. There are four central elements to the analysis of commodity chains: (1) the input– output structure, (2) geography, (3) institutions, and (4) governance structures.

The global commodity chain framework, emerging at a time of rapid global economic integration, highlights the importance of coordination across firm boundaries in addition to the growing importance of new global buyers (e.g., retailers like Walmart and brand marketers) as the key drivers in the formation and maintenance of globally dispersed and fragmented production and distribution networks.

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