VALUE CHAINS IN THE AUSTRALIAN SUGAR INDUSTRY: AN ASSESSMENT AND INITIAL STUDY

This paper defines the concept of a value chain and looks at its applicability in the sugar industry. A value chain achieves vertical integration of businesses through joint strategic planning, transparency, trust and respect. Value chains have a number of benefits: they reduce transaction costs and allow businesses access to new resources. These have application in the sugar industry. Interviews were conducted with millers, growers and harvesters in a small number of mill areas, and with marketers and logistics providers to assess the current state of the sugar industry value chains. It was found that, compared with other Australian agribusinesses, the sugar industry scored lowly in the areas of awareness, trust, efficiency, transparency and rewards. Priorities for industry action are suggested if the benefits of value chains are to be realised.