Sustainability Strategies and Contractual Arrangements in the Italian Pasta Supply Chain: An Analysis under the Neo Institutional Economics Lens

Contracts represent key governance mechanisms along the supply chain to pursue collective sustainable strategies in line with new citizen-consumers' preferences for sustainable products. Adopting an embedded multiple case study approach, this paper explores and analyzes 11 cases of contractual relationships between Italian semolina and pasta producers and farmers in order to investigate whether sustainability strategies affect the design of contracts and the related consequences. Findings reveal that different sustainability strategies correspond to different design and combinations of (both monetary and nonmonetary) contractual incentives aimed to centralize property and decision rights. What emerges is that stronger sustainability strategies entail a higher degree of buyers' control over strategic investments (such as land and seeds) as well as wider provision of technical assistance and knowledge and innovation transfer toward farmers. Therefore, mutual gains seem at stake, even if socio-economic implications of the shift in decisional and control rights from farmers toward buyers shall be neglected, to ensure a better coherence with the farm to fork strategy and sustainable development goals.

Automated summary

This paper explores the impact of sustainability strategies on the design of contracts and their consequences through a study of contractual relationships between Italian semolina and pasta producers and farmers. The findings suggest that different sustainability strategies lead to different contract designs and incentives, with buyers having greater control over farmers in terms of decision-making and investments. The study highlights the need to consider the socio-economic implications of this shift in control rights and emphasizes the importance of aligning with the farm to fork strategy and sustainable development goals.