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It is an important
aspect of seaplant value chains that they belong to a segment of
global commerce that produces “specialty” crops. Typical specialty
crop value chains involve a high-value, low-volume market profile and
they often involve a high proportion of SME. Besides seaplant value
chains, examples of specialty crop value chains are those producing
fresh and processed forms of plant and animal products including (but
not limited to) meat, eggs and dairy products; fruits, vegetables;
breeding stock, pets and laboratory test animals; horticultural,
silvicultural and landscaping crops; herbs, spices, flavors,
fragrances, dyes, fibers and biopolymers; dietary supplements, plant
stimulants, pharmaceuticals and nutraceuticals. The specialty crop
segment of global commerce includes millions of SME that possess
legitimate ownership and/or proprietary rights to geographic locations
that possess special characteristics. For example, in the case of
seaplant value chains farming must usually be undertaken at sites: |
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close to suitable water sources;
often marine coastal sites. |
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2. |
in close proximity to suitable
human resources. |
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3. |
having oceanographic and
meteorological profiles that permit profitable year-around
farming. |
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4. |
with economically attractive
logistics features. |
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Such sites can be
hard to get. With open-sea sites, for example, many jurisdictions have
no formal concession systems or licensing procedures for sea farming
ventures. The acquisition of usage privileges for the best seaplant
farming sites are generally reserved for bona fide local SME with the
necessary characteristics and "clout". Access to such privileges is a
crucial core resource that these SME bring to strategic alliance
networks. |
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Sustainable production
of specialty crops requires:
special farm sites
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specialized knowledge, skills and talents. |
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“Specialty” crops have
characteristics that differentiate them from the “staple” crops normally
listed on commodity exchanges. Production tends to be limited and
specialty crops or products tend to be graded and priced on the basis of
quality. Many seaplant value chains sell into markets where their products
have a derived demand (e.g. biopolymers) so the development of new
products and markets requires joint innovation among suppliers and
customers. Many seaplant products are blends of several base products that
are sold as “solutions” with a high intellectual property component. Also
many seaplant products such as nutraceuticals, bioactive substances and
foods are subject to stringent regulatory controls and standards.
Markets for seaplant
products are globally dispersed so seaplant value chains tend to involve
transactions across trans-jurisdictional boundaries. The profusion of
legal systems (many poorly developed), the lack of law and order in areas
key to the industry (e.g. seaweed production areas in the southern
Philippines and remote areas of Indonesia) and the wide variety of
linguistic and cultural demarcations results in a situation where legal or
hierarchical governance systems are not a practical option in forming
business organizations. Therefore trust relationships such as strategic
business alliances can be essential to long-term business success. The
formation of trust in such alliances is a function of the person-to-person
relationships known as “relational social capital”.
Trust exists by virtue
of relationships among people within allied enterprises. Building such
relationships can entail the expenditure of a great deal of time, effort
and expense during periods of trial and error. SME tend to be
owner-operated so time and effort are among the most limited and valuable
assets of SME managers. However, although building trust-commitment-based
strategic alliances can be costly and risky and trust must be effectively
managed, it turns out that trust relationships, once formed, become
valuable long-term core resources for SME intent on retaining their
independence as they participate in global value chains. |
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