Supply Chain Management and New Zealand Essay

Journal of Economic Geography 1 (2001) pp. 439±456

Global supply chains and networking:
A critical perspective on learning challenges in the New Zealand dairy and sheepmeat commodity chains
Richard Le Heron*, Guy Penny*, Mark Paine**, Gavin Sheath***,
Justine Pedersen***, and Neels Botha***

Abstract
Vertical and horizontal networks in food chains and rural areas interact on rural development through a potentially global reach. This paper adopts a knowledge systems framework incorporating networking dimensions to explore problems of supply chain reorganisation. In New Zealand this framework is being applied in agri-industries through the input of research institutes, partly in response to buyer-driven pressures for supply chain realignment and production to more precise specification. The paper reports on networking interventions by AgResearch in the farmer-processor relation in two New Zealand export food chains (dairy and meat). Findings from the Learning Challenges Project where focus groups are used to conceptualise and define aspects of the chains and to ascertain knowledge networking dimensions point to the potential of networking methodologies as policy tools.
Keywords: knowledge systems; learning processes; networking; food supply chains.
JEL classi®cations: Q130, L220, O320

1. Introduction
Recent conceptual and theoretical reviews on the nature and signi®cance of agri-food and rural networking (Busch, 2000; Marsden, 2000; Morgan and Murdoch, 2000;
Murdoch, 2000; Le Heron, 2001) suggest two contrasting genres in the international literature, namely those exploring vertical and horizontal networking. Work on networking in vertically organised commodity chains points to a reinforcement of many existing sets of power relations between food companies and farmers. Analyses of regional innovation and learning, in contrast, stress the importance of horizontal networking in creating and strengthening supportive economic institutions and conventions and in developing local productive capacities. In each genre, networks are increasingly interpreted as geographically situated social processes, involving multiple agents, interacting in ways that produce structural outcomes (Coe and Yeung,
2001). Indeed, Murdoch (2000) argues for a recasting of rural development policy to explicitly recognise networking as a distinctive organising methodology. He believes
* Department of Geography, University of Auckland, Private Bag 92019, Auckland, New Zealand. email 5r.leheron@auckland.ac.nz4
** Department of Land and Food, University of Melbourne, Melbourne, Victoria, Australia.
*** AgResearch, Hamilton, New Zealand.
& Oxford University Press 2001

440 x Le Heron et al. this would allow greater understanding of external and internal in¯uences on food chains and rural areas by looking at how vertical and horizontal networks interact on rural development through a potentially global reach. This would assist appreciation of the way that development outcomes in such contexts result from `the imposition of new economic forms on pre-existing conditions' (Murdoch, 2000, p. 417).
We contend that despite the promise of networking studies some major challenges lie ahead for researchers applying networking methodologies in food economy policy settings. We see at least four reasons for such challenges. First, much academic work on food economy networking remains detached from the economic and political processes it attempts to examine. This is hardly surprising. The interest of an increasing number of studies, the systematic investigation of global dimensions of food chains, is still gathering momentum. Insight about networking is thus largely descriptive, passive, and removed from policy frameworks rather than immediate, active, and directly policy oriented. As
Murdoch (2000, p. 417) also notes, `it is not the networks themselves that are important but the objects and relations that ¯ow through

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