Evaluating alternate strategic options for agricultural value chains

Abstract

Making strategic innovations to agricultural value chains can be difficult. Complex biophysical and logistical interactions make a priori estimates of chain-wide impacts difficult. This paper gives the results of applying an agent-based, value chain modelling framework, developed and applied in participation with stakeholders in three sugar mill case studies, which evaluated the viability of maximising the co-generation of electricity by harvesting the whole crop (i.e. cane leaves as well as stalk). The existing practice of harvesting predominantly cane stalk (as in the 2003 production year) was the base case for comparing a scenario where electricity co-generation (from crop residues) was an added revenue stream. Increased revenues were compared to costs within sectors as per changes in biophysical flows for the grower, harvesting, transport and milling segments in the chain. In general, predicted impacts on the farming and milling sectors were greater than anticipated by stakeholders, while the impacts on the harvesting and transport sectors were less than anticipated because of increased logistical efficiency possible in the sectors. A virtual experience of their supply chain facilitated more complete knowledge transfer about possible impacts of whole-crop harvesting to managers across the chain and thus increased their capacity to evaluate innovative business models involving the co-generation of electricity.