Vertical integration in Italian pasta supply chain: A farm level analysis

Abstract

This paper aims at identifying what features are relevant in characterizing the vertical coordinated farms in Italian durum wheat sector. Vertical coordination of food supply chains is deemed as a necessary strategy to optimize the production system, helping processors to face the global competition and allowing farms to get more distant markets accessible. However, in Italy a form of vertical coordination in the pasta supply chain is diffusing, and despite the potential advantages of this relationship, the majority of durum wheat is sold through spot contracts typically underwritten with commercial intermediaries. Using data from the Agricultural census, the empirical analysis suggests that the integrated farms are more sized and professional and have a greatest focus on product quality.