Value Chains and Technology Transfer to Agriculture in Developing and Emerging Economies

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Value chains in the agrifood sector are undergoing a rapid process of modernization, characterized by the emergence of private standards and different systems of vertical value chain governance. In this article, we investigate the technological implications of these developments at the farm level. We model the conditions under which technology transfer and adoption will occur in a value chain setting and review the corresponding evidence on these issues. We find that technology transfer within a value chain can occur in an environment with imperfect credit and technology markets but depends on the surplus generated by the technology and the holdup opportunities within the value chain. We also discuss how these holdup opportunities affect bargaining power and the division of surplus and how the nature of the technology affects technology transfer and the implications for value chain governance.

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