Journal on Policy & Complex Systems Vol. 2, Issue 2, Fall 2015 | Page 26

Assessing Values-based Sourcing Strategies in Regional Food Supply Networks : An Agent-based Approach
Regional food hubs are an example of an emerging type of VBO that can facilitate the fulfillment of this increasing demand for local food . The United States Department of Agriculture ( USDA ) working definition of a food hub is “ a centrally located facility with a business management structure facilitating the aggregation , storage , processing , distribution , and / or marketing of locally / regionally produced food products ” ( Barham , 2010 ). Food hubs act as intermediaries between smallscale food producers ( e . g ., farmers ) and customers , providing connections and infrastructure in support of regional and local food systems . A primary objective for regional food hubs is to support local economies by providing market opportunities for small-scale producers and treating them as valued business partners , rather than interchangeable suppliers ( Barham , Tropp , Enterline , Farbman , Fisk , & Kiraly , 2012 ). However , these producers must also possess attributes that are valued by the food hub ’ s customers ( e . g ., reasonable prices , high quality ). Thus , the food hub ’ s process of determining which producers to work with should carefully balance these requirements . However , in practice , food hubs tend to follow ad hoc sourcing and supplier management methods , which can lead to suboptimal performance and often business failure .
This paper describes an agent-based model ( ABM ) that was developed using empirical data from a regional Iowa food system . The model was used to assess the value of having a food hub manager agent act as a centralized control for the system by exploring the impacts of different management strategies on the food hub ’ s performance . In particular , the Iowa food hub manager would like to know what types of producer selection policies should be employed ( if any ). The manager ’ s current policy is to allow any producer in Iowa who wishes to sell food through the food hub to do so . The manager then relies on consumers to determine whether a producer may continue to participate : if a producer ’ s prices are too high , or if their products are of poor quality , or if there is insufficient demand for their product , they will make few sales . Such producers will typically either try to improve their offerings or they will cancel their membership . Thus , producer selection at the food hub is a decentralized process , in which the overall makeup of food hub ’ s producers at any point in time is an emergent property resulting from competition among the producers .
However , the food hub manager suspects that if he intervenes via appropriate producer selection policies , he may be able to increase his consumers ’ satisfaction by only allowing in those producers that are most likely to meet their needs . The food hub manager may also be able to improve the well-being of his producers by preventing an oversupply of any given type of food , thereby keeping competition among producers reasonable and prices sufficiently high . The question addressed in this paper is : What producer selection policies should the manager implement to best support the food hub ’ s objectives ?
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