The AERU Value Chain Compass

Incentives

Contracts

Preparing commercial contracts is a highly specialised skill that goes well beyond the scope of this guide. The main point of this segment is to comment on the difficulties any written contract has on anticipating all the challenges that can occur in an enterprise based on producing premium food and fibre products for discerning consumers.

A finding from the research programme was that value chains with clearly articulated values were able to solve unanticipated problems through collaboration based on mutual respect for their collective values.

Questions for developing a value chain

• What type of contract best serves each partnership in the value chain, ranging from a simple agreement for sale and purchase transactions to a complex agreement with detailed specifications and processes to be followed after adverse events?

• Do the proposed contracts align incentives for each partner to promote the vision of the value chain?

• How will the value chain solve unanticipated problems that may emerge from time to time?