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Primary Uncertainty in the Seafood Industry: An Exploratory Study of How Processing Firms Cope (Perspectives) (Report)

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eBook details

  • Title: Primary Uncertainty in the Seafood Industry: An Exploratory Study of How Processing Firms Cope (Perspectives) (Report)
  • Author : Marine Resource Economics
  • Release Date : January 01, 2003
  • Genre: Life Sciences,Books,Science & Nature,
  • Pages : * pages
  • Size : 194 KB

Description

Introduction This paper focuses on how processing firms close to harvest cope with the high degree of uncertainty regarding raw material supply. This is a highly relevant concern because uncertainties of this nature may lead to inefficiencies in production and cause problems in satisfying the needs and wants of downstream customers by, for instance, limiting the product range of the firm, affecting the quality of the products offered, or disturbing the ability to deliver on schedule. Supply uncertainty is regarded as the greatest source of instability in the processing sector (Prochaska 1984). Yet, most research addressing supply uncertainty has been conducted from the viewpoint of the policymaker with the goal of optimal stock management (Bockstael 1984). Little research has focused on how processing firms near harvesting cope with a high degree of variation in raw material supply (for a notable exception, see Dreyer and Gronhaug 2003). Thus, the main question underlying this research is, "How do processing firms cope with supply uncertainty to compete effectively in their output markets?" To examine this question, we conducted an exploratory study of processing firms operating in the whitefish branch of the Norwegian seafood industry. Here, changes in fishing effort due to factors such as fish stock variations, poor weather conditions, and government regulation contribute to a high degree of uncertainty regarding supplies. In particular, processing firms close to harvest are more directly exposed to uncertain supply than actors further downstream in the value system because supply uncertainty will, to some extent, have been absorbed by upstream actors.


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