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Intensive Study Program (ISP):
Challenges and Opportunities for Modern Agribusiness Firms
Bolzano, South Tyrol, Italy.
13 March – 18 March 2016, Academic Year 2015-2016.
General Information
The Intensive Study Programme (ISP) “Challenges and Opportunities for Modern Agribusiness
Firms” (COMAF) will present a thorough overview of the different aspects characterizing the
modern agribusiness sector. The topics (illustrated in detail below) will cover different aspect of
quality in agribusiness, which include communicating and signaling quality to buyers and
consumers, innovation to achieve quality, standards and industrial quality, and different aspects
of the interactions and coordination among actors in agro-food supply chains.
The course activities encompass a mix of lectures, study visits, interactions with private sector
speakers, group work, and in-class discussion and presentations.
The team of instructors is comprised of:
Francesco Bimbo: PhD student in Business Economics at Wageningen University, and Postdoctoral researcher in Agricultural Economics at University of Foggia. His expertise is in applied
industrial organization, economics of food retailing, and of food, health and quality. He teaches
MS level course in Corporate Finance Management.
Chenguang Li: Lecturer of agricultural economics and international food marketing at the
School of Agriculture and Food Science in the University College Dublin (UCD), Ireland. Her
areas of expertise are industrial organization of food markets and retail chain analysis. She
teaches international food and agribusiness marketing.
Luisa Menapace: Professor of Governance in International Agribusiness at TUM. She focuses
on institutional and governance issues in the agro-food sector and internationalization and teaches
“Agribusiness Governance” and “Value Chain Economics” for the agro-food sector.
Cesar Revoredo-Giha: Senior Economist and Team Leader of Food Marketing Research at
Scotland’s Rural College (SRUC) and lectures at the MSc on Food Security at the University of
Edinburgh. His areas of expertise are in industrial organization of food industries, operation of
agro-food supply chains, and agricultural economics.
Carlo Russo: Associate Professor of Agricultural Economics, Department of Economics and
Law of the University of Cassino and Southern Lazio. His main interests concern the industrial
organization of agro-food chain, collective action in agriculture and the regulation of imperfectly
competitive agro-food market.
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Course Learning Objectives
This course is designed for master students who intend to have a more in-depth background in
modern agribusiness firms’ economics and have a high interest in the European agro food supply
chain. It aims to provide a comprehensive overview of trends, issues and challenges, faced by the
stakeholders operating in the agro-food industries. Students will apply economics principles to
understand the mechanisms of coordination of agro food chain stakeholders, and will be
encouraged to examine critically how agro-food policies affect stakeholders’ behavior along the
food supply chain.
Students Learning Outcomes:
At the end of this course students should be able to:
 Explain the EU agro-food system and highlight challenges from the perspective of its
stakeholders (e.g. farmers, retailers, consumers)
 Discuss, using economic theory and principles, challenges of the EU agro-food sector
including (but not limited to) asymmetric information, environmental externality, contracts,
standards, strategic pricing, innovation and evolution in food consumption trends
 Analyze and discuss the role of policies implemented by the EU relevant for the issues
covered in the course and their effects on all stakeholders
 Explain the coordination mechanisms among the stakeholders
 Synthetize the analysis of a complex problem concerning agro-food chains by means of an
oral presentation
Assessment:



Students will be assessed by means of a group presentation and an individual report. The
class presentation is planned on the last day of the ISP (Friday).
Students will be asked to address a specific topic using: concepts and terminology
acquired throughout the week and information collected during the study visit and the
interaction with the speakers from the private sector.
Students will receive a list of 4 topics. Students can order topics in order of preference.
This ranking will be used to create the groups. More details on the expectations regarding
the research report and the presentation are summarized in the attached file on
“assessment”.
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Lessons Schedule, Class Activities and Specific Lesson Objectives
Day 1 - Monday Mach 14
Morning Section – Introduction and Lectures
Introduction to the Intensive Study Programme (ISP)
Lesson 1.1: Communicating food quality under asymmetric information (Luisa Menapace)
Content: Asymmetric information between producers and consumers is known to be an important
problem for the provision of quality in agro-food markets and is a cause of market failure.
Depending upon the nature of the product attributes (search, experience and credence attributes),
different market tools can be used by firms to communicate quality to consumers thereby
alleviating market failures. These include private and collective brands, geographical indications,
quality seals, etc. Geographical indications represent as the main pillar of the EU’s quality policy
on agricultural products.
Topics:
 Product attribute classification
 Market-based solutions to market failures due to asymmetric information
 Geographical indications: relevance in the EU agro-food sector, EU regulation
framework, main features of GI protection in EU and their economic implications
Learning outcomes: after completing the lesson, students will be able to classify product
attributes, explain which market-based tools can be used to prevent market failures due to
asymmetric information. Students will be able to explain the concept of geographical indication
and the main features of the EU system of protection of geographical indication.
References:
***Akerlof, G. 1970. The markets for “lemons”: Quality Uncertainty and the Market
Mechanism, The Quarterly Journal of Economics 84(3).
Cabral, L. The Economics of Trust and Reputation: A Primer. Notes 2005.
***Moschini, G., Menapace L., and D. Pick. 2008. Geographical Indications and the competitive
provision of quality in agricultural markets. American Journal of Agricultural Economics,
90(3):794-812.
Menapace, L., and G. Moschini. 2012. Quality certification by Geographical Indications,
trademarks and firm reputation. European Review of Agricultural Economics, 39(4):539-566.
*** Identifies references that students are invited to read before the ISP
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Afternoon Section - Lectures and Group work
Lesson 1.2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Content: The production, processing, distribution, retail, packaging and labelling of foodstuffs are
governed by a mass of laws, regulations, codes of practice and guidance. This mass of coded
information regulates all transactions between buyers and sellers along the entire food supply
chain and is created to obviate to market imperfections mainly generated by asymmetric
information and externalities. The purpose of this lecture is to provide an overview of quality
regulations, standards as well as private protocols in the EU food and drink industry.
Topics:
 Product quality, information asymmetries and quality standards
 Public and private standards
 Standards and compliance costs
 Examples of the use of standards in the food and drink chain
Learning outcomes: after attending this lesson, students will be able to explain the reasons for the
need of regulations and standards, the economic incentives to implement them, how they are
implemented in EU system as well as their costs. Students will be able to distinguish public and
private standards and understand how standards interact with each other’s.
References:
Alvarez, G. (2010). Fair trade and beyond: Voluntary standards and sustainable supply chains.
Delivering performance in food supply chains. Woodhead Publishing Limited, Cambridge, the
United Kingdom of Great Britain and Northern Ireland, 478-510.
Caswell, J. A., Bredahl, M. E., and Hooker, N. H. (1998). How quality management metasystems
are affecting the food industry. Review of Agricultural Economics, 20(2), 547-557.
Fulponi, L. (2006). Private voluntary standards in the food system: The perspective of major food
retailers in OECD countries. Food policy, 31(1), 1-13.
Henson, S. (2008). The role of public and private standards in regulating international food
markets. Journal of International Agricultural Trade and Development, 4(1), 63-81.
Malorgio, G., and Solaroli, L. (2012). Policies and regulations in the Mediterranean:
complementarity and coherence. MediTERRA 2012, Chapter 21. Available online:
https://www.academia.edu/5397538/chapter_21._
policies_and_regulations_in_the_mediterranean_complementarity_and_coherence
Smith, G. (2009), Interaction of Public and Private Standards in the Food Chain, OECD Food,
Agriculture and Fisheries Papers, No. 15, OECD Publishing. Available online at:
http://dx.doi.org/10.1787/221282527214
Young, L. M., and Hobbs, J. E. (2002). Vertical linkages in agri-food supply chains: changing
roles for producers, commodity groups, and government policy. Review of Agricultural
Economics, 24(2), 428-441.
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Lesson 1.3: Food quality: a firm perspective (Francesco Bimbo)
Content: Innovation is widely viewed as a major competitive parameter in the agri-food sector
and it is mainly targeted to increase the quality of products and/or the efficiency of the processes
by creating new ones or modifying existing ones. The minimum requirement for an innovation is
that the “innovative” improvement must be new to the firm. Innovation process involves multiple
actors whose joint efforts are aimed to increase the market performances of the firm. Sectorial
and regional expects also influence innovation outcomes.
Topics:
 Economics of Innovation
 Innovation Process Models
 Innovation in the EU agro-food sector
Learning outcomes: after completing the lesson, students will be able to define innovation and
explain the difference with related terms, understand and recognize the main types of
innovations. Further, students will be able to identify the drivers of the innovations in the EU
food sector; how innovations are developed and how sectorial and regional factors affect
innovative outcomes.
References:
OECD, 2005. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd
Edition.
***Muscio, A., Nardone, G., and Dottore, A. (2010).Understanding demand for innovation in the
food industry. Measuring Business Excellence. 14(4) 35-48.
Capitanio F., Coppola A., Pascucci S. (2009). Indications for drivers of innovation in the food
sector. British Food Journal 111 (8), 820-838
Baregheh, A., Rowley, J., Sambrook, S., & Davies, D. (2012). Innovation in food sector SMEs.
Journal of Small Business and Enterprise Development, 19(2), 300-321.
Sarkar, S., & Costa, A. I. (2008). Dynamics of open innovation in the food industry. Trends in
Food Science & Technology, 19(11), 574-580.
Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd Edition OECD
Case Studies:
Boland, M., Cooper, B., & White, J. M. (2015). Making Sustainability Tangible: Land O'Lakes
and the Dairy Supply Chain. American Journal of Agricultural Economics, aav062.
Yeager, E. A., Downey, W. S., & Widmar, D. A. (2015). Syngenta: Changing a Global
Company. International Food and Agribusiness Management Review, 18(2), 173. Open
Innovation: Pringles Print. https://www.ideaconnection.com/open-innovation-success/OpenInnovation-Pringles-Print-00037.html
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Group Work Session 1 – Background
Topic 1: Quality communication to buyers (Luisa Menapace)
Contents: Students will explore the structure of apple and wine supply chains and identify key
asymmetric information problems and potential tools to communicate quality.
Learning outcomes: Students will be able to explain the problem related to the presence of
asymmetric information and to identify tools used by firm to address such problems.
Topic 2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Contents: Students will explore the food quality management systems that are in place in the
visited firms to help them ensure that they meet the regulations related to their products and the
traceability of goods, from the packaging back to the producer.
Learning outcomes: Students will be able to identify regulation and standards related to food
safety and quality.
Topic 3: Innovation in the agri-food system (Francesco Bimbo)
Contents: Students will explore the structure of apple, wine and agricultural input supply chains
and identify the key processes affecting the needs of innovations in each chain.
Learning outcomes: Students will be able to explain the structure and functioning of apple, wine
and agricultural input supply chains and individuate their business innovation needs.
Topic 4: Coordination and Quality (Carlo Russo)
Contents: Students will explore the structure of the apple supply chain, identify key transactions
and will define agents’ incentives.
Learning outcomes: Students are able to explain the structure and functioning of the apple supply
chain.
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Day 2 - Tuesday Mach 15
Morning Section - Lectures
Lesson 2.1: Coordination, contracts and incentives (Carlo Russo)
Content: Quality in the agro-food supply chains is a complex achievement, often requiring the
joint effort of several independent firms and individuals. Coordination is required to produce
complex food products, meeting industry standards and consumers’ expectations. Yet, bringing
together heterogeneous agents for a common goal is a non-trivial task because each individual
has specific and potentially incompatible objectives. Producing quality implies that all agents
comply with a stated (or implicit) production plan regardless of private incentives. The design of
a coordination mechanism such that all agents can agree on a production plan based on individual
profit (or utility) maximization is a complex task. Economists refer to this issue as the incentive
alignment problem (cfr. Salanié).
Topics:
 The coordination continuum: vertical integration, spot market, contracts, other hybrids
 Basic notions of contract theory
 Setting incentives and using contracts as coordination devices
Learning outcomes: students will be able understand and explain the multiple ways to organize
transactions as well as indicate the optimal choice according objectives and specific conditions.
Further, students will be able to explain the incentives that may influence the outcome of the
transaction as well as the role of a contract to set and manipulate incentives.
References:
Stiglitz (1974): Incentives and Risk Sharing in Sharecropping. The Review of Economic Studies,
Vol. 41, No. 2 (Apr., 1974), pp. 219-255 [Advanced]
*** Bogetoft, P., & Olesen, H. B. (2002). Ten rules of thumb in contract design: lessons from
Danish agriculture. European Review of Agricultural Economics, 29(2), 185-204. [Basic]
Lesson 2.2: Food quality: a consumer perspective (Carlo Russo – sub. For Chenguang Li)
Content: Quality is a key competitive advantage in the agri-food system. By providing quality,
agri-food firms can meet the new trends in consumer demand, expand market shares and – most
importantly – increase profits. The strategic management of quality requires the understanding of
key economic principles. This lecture covers the foundations of economic theory of consumer
demand for quality and discusses the implication for competition. The emphasis of the lecture is
on the market mechanisms linking food quality and firm profits.
Topics
Topic a: Consumer demand for quality
 Products as bundle of attributes
 The consumer problem when quality matters
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 Product positioning
 Horizontal and Vertical quality
Topic b: Quality as a competitive advantage
 A simple model of vertical quality
 Optimal quality level (determinants)
 Insights into horizontal quality
Learning outcomes: Students will understand the definition of quality. Students will understand
implications of product differentiation for consumer choice and will be able to evaluate the
marketing position of a product or a brand. Student will understand the role of competition in
defining the optimal level of quality.
References:
Lancaster, K. J. (1966). A new approach to consumer theory. The journal of political economy,
132-157. [Advanced]
*** Gwin, C. F., & Gwin, C. R. (2003). Product attributes model: A tool for evaluating brand
positioning. Journal of Marketing theory and Practice, 11(2), 30-42. [Basic]
Gabszewicz, J. J., & Thisse, J. F. (1979). Price competition, quality and income disparities.
Journal of economic theory, 20(3), 340-359. [Advanced]
Mussa, M., & Rosen, S. (1978). Monopoly and product quality. Journal of Economic theory,
18(2), 301-317. [Advanced]
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Afternoon Section – Group work and industry visit
Group Work Session 2 Theory
Topic 1: Quality communication to buyers (Luisa Menapace)
Contents: Students clarify the theoretical background of quality communication. Students prepare
for firm visits. Students apply theory from lectures to analyze the problem and propose solutions.
Learning outcomes: Students are able to apply economic reasoning to solve asymmetric information
problems.
Topic 2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Contents: Instructor clarifies theory and presents cases related to commercial/industrial quality
and standards in the food and drink industry. Students prepare for firm visits. Students apply
theory from lectures to analyze the problem and propose solutions.
Learning outcomes: Students are able to apply economic reasoning to solve problems related to
food safety and quality preservation.
Topic 3: Innovation in the agri-food system (Francesco Bimbo)
Contents: Instructor presents students examples/case studies on how innovations support the
competitiveness of agro-food manufacturers in the market. Students prepare for firm visits.
Learning outcomes: Students will be able to apply content proposed in class to understand the
demand of innovation expressed by each firm.
Topic 4: Coordination and Quality (Carlo Russo)
Contents: Instructor presents students examples/case studies of coordination problems. Students
apply theory from lectures to analyze the problem and propose solutions. Students prepare for
firm visits.
Learning outcomes: Students are able to apply economic reasoning to solve basic incentive
problems.
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Day 3 - Wednesday Mach 16
Morning Section – Industry visit
Study visit 3.1: Melinda, Cles.
Firm description: Melinda is a consortium of producers whose vital structure is made up of
member farmers, namely of around 4.000 families of fruit-farmers who live and grow apple trees
in the Noce Valleys. The scopes of activities that are undertaken by Melinda include: harvesting,
storage, packaging, marketing and communications, and sales of fruit. The consortium owns bins
for harvest of over 360 000 tons of fruit, refrigerators with the total capacity of 340 000 tons of
fruit, and scientific, computerized selection and packaging systems. In total Melinda has 6
processing centers, which operate in compliance with strict international certification
requirements (Haccp, ISO 9001, BRC, IFS), and it has a turnover for around 300€ mil.. The
given technology makes it possible to package up to 1500 tons of fruit per day, six days a week.
In total there are three main business sections: apples, berries and apple based snacks.
Afternoon Section – Industry visit
Study Visit Session 3.2: Rotary, Mezzocorona
Firm description: Mezzacorona S.c.a is founded in 1904 and is one of the first cooperatives of
winemakers born in Italy. It has 2600 hectare vineyard located in Trentino Alto Adige and 900
hectares in Sicily. Mezzacorona S.c.a has over than 300 employees and, with a turnover of 174,7
mil. €, is one of the firms lead in the production of sparkling wine using the Metodo classico by
using sustainable practices. In fact, Mezzocorona’s wines follow production processes that pay
great attention to preserving the natural environment lowering chemicals inputs in the soil and
carbon dioxide emissions in the air. To reach these goals, firm uses biological systems of
combatting harmful insects in the vineyards, uses locally produced materials as well as uses
renewable sources of energy. Further, All structures built by Mezzacorona S.c.a group are
perfectly in synthesis with its surrounding natural environment.
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Group Work Session 3 Debriefing
Topic 1: Quality communication to buyers (Luisa Menapace)
Contents: Students discuss asymmetric information and quality communication in the Melinda,
Rotari and BayWa cases. Students identify key problems and firms reactions.
Learning outcomes: Students are able to identify asymmetric information and quality signaling
problems in practice. Students are able to identify and evaluate how firms solve these issues and
at what cost.
Topic 2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Contents: Students discuss with instructor about food safety and quality issues in the Melinda,
Rotari and BayWa cases. Students identify key problems and firms reactions.
Learning outcomes: Students are able to identify potential food safety and quality problems in
practice. Students are able to identify and evaluate how firms solve these issues and at what cost.
Topic 3: Innovation in the agri-food system (Francesco Bimbo)
Contents: Students discuss with instructor about innovation issues in the Melinda, Rotari and
BayWa cases. Students identify key problems and firms reactions.
Learning outcomes: students will be able to identify how firms handle in practice with innovation
issue as well as the actors involved in the innovation process. Students will be able to identify
and evaluate how firms solve to problems.
Topic 4: Coordination and Quality (Carlo Russo)
Contents: Students discuss with instructor about coordination issues in the Melinda, Rotari and
BayWa cases. Students identify key problems and firms reactions.
Learning outcomes: Students are able to identify coordination problems in practice. Students are
able to identify and evaluate how firms react to problems.
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Day 4 - Thursday Mach 17
Morning Section – Industry visit
Study Visit Session 4.1: VI.P Coop. Soc. Agricola, Latsch.
Firm description: Venosta Fruit Growers’ Cooperatives (VI.P) is a producers organization
established in early ‘90 in South Tyrol, the area in north-east of Italy that borders with Austria
and Switzerland. This area represents the biggest single area (19000 ha) producing apple in
Europe and it supplies up to 50% of the national Italian apple market, 15% of the European and
2% of the global apple market. VI.P has 700 employees and is composed by 7 cooperatives with
a total of 1730 members and 5110 ha. It sells 361,330 tons of apples per year with a turnover of
225€ mil. VI.P’s activities include: harvesting, storing, packaging, marketing, and sales of apples.
Vinschgau/Val Venosta's brand is available in 48 markets including Germany, Sweden, Finland,
Spain, Italy, North Africa and Middle East.
Afternoon Section – Industry visit
Study Visit Session 4.2: Beikircher Grünland Srl, Merano/Bolzano
Firm description: Beikircher Grünland Srl is founded in 1926 in Brunico. It is a small and
medium enterprise with less than 100 employees with turnover of 44 mil. €. Beikircher Grünland
Srl produces and trade agricultural products, such as: grains, fertilizers, seeds, pesticides, fuels,
wood pellets, and other related products. However, Beikircher’s core business activity is the
production and trade of high-quality animal feeds by jointly offering high-quality products at a
fair price, good professional advices and customized services. The objective of the company is to
provide a healthy diet for animals and humans by clearly traceable production steps and
permanent quality checks of its animal feeds. This means that customers can always feel secure
about the high standards of the products and they can trust the company and the quality of its
feeds.
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Group Work Session 4 Building alternatives
Topic 1: Quality communication to buyers (Luisa Menapace)
Contents: Students will compare the different cases contrasting how quality communication
occurs in practice and propose innovative alternative solutions.
Learning outcomes: Students will be able to compare alternative solutions for food quality
signaling and propose alterative solutions.
Topic 2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Contents: Students will compare the different cases contrasting how regulations and standards are
put in practice as regards the different aspects of production and marketing of products.
Learning outcomes: Students will be able to compare alternative solutions to food safety and
preservation of quality.
Topic 3: Innovation in the agri-food system (Francesco Bimbo)
Contents: Students compare innovation issues identified in section 3 with VI.P. Venosta case.
Learning outcomes: Students will be able to identify the needs of innovation expressed by each
firm and to evidence similarities and differences about how each firm approaches innovation.
Topic 4: Coordination and Quality (Carlo Russo)
Contents: Students will compare coordination issues identified in section 3 with the VI.P.
Venosta case. Students will compare and contrast problems and reactions among firms.
Learning outcomes: Students are able to identify coordination problem. Students are able to
compare alternative solutions.
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Day 5 – Friday Mach 18 – Presentation finalization, Assessment and Course Wrap-up
Morning Section – Group work
Group Work Session 5 Finalizing presentations
Topic 1: Quality communication to buyers (Luisa Menapace)
Contents: students finalize the presentation.
Learning outcomes: Students will be able to summarize in a presentation the economic analysis of
innovation as well as the innovation process from a business perspective.
Topic 2: Standards and Industrial Quality (Cesar Revoredo-Giha)
Contents: Students will compile the presentation.
Learning outcomes: Students are able to summarize in a presentation economic analysis as
regards food safety regulation, quality standards and traceability.
Topic 3: Innovation in the agri-food system (Francesco Bimbo)
Contents: students finalize the presentation.
Learning outcomes: Students will be able to summarize in a presentation the economic analysis of
innovation as well as the innovation process from a business perspective.
Topic 4: Coordination and Quality (Carlo Russo)
Contents: Students will compile the presentation.
Learning outcomes: Students are able to summarize in a presentation economic analysis of
coordination problems.
Afternoon Section – Presentation, assessment and class evaluation
Lunch Seminar / Students presentations
Wrap up and Students’ Course Evaluations
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ISP Schedule
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Abbreviations
Francesco Bimbo
(FB)
Chenguang Li
(CL)
Luisa Menapace
(LM)
Cesar Revoredo-Giha (CRG)
Carlo Russo
(CR)
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