Assessing the Dynamics of the Coffee Value Chain in Davao del Sur: An Agent-Based Modeling Approach

TL;DR

This paper uses an agent-based model to analyze the coffee value chain in Davao del Sur, highlighting how trust, risk, and transaction costs influence stakeholder interactions and decision-making.

Contribution

It introduces a novel agent-based modeling approach to simulate and understand the complex dynamics of the coffee value chain in Davao del Sur.

Findings

Producers prefer selling to the market for higher prices.

Trust and risk attitudes significantly influence sales decisions.

Harmonious systems can be achieved with adjustments in demand, pricing, and stakeholder attitudes.

Abstract

The study investigates the coffee value chain dynamics in Davao del Sur using an agent-based model. Three main factors driving interactions among key players were identified: trust, risk, and transaction costs. The model was constructed using NetLogo 6.3.0, and data from a survey questionnaire collected three data points from BACOFA members. Five cases were explored, with each scenario simulated 1000 times. Findings suggest that producers often sell to the market rather than the cooperative due to higher prices. However, producers tend to prioritize trust in buyers and their risk attitude, leading to increased sales to the cooperative. The producer's risk attitude significantly influences their decision-making, affecting performance outcomes such as loans, demand, and price changes. All three factors play a role and exert varying impacts on the value chain. So, the stakeholders' decisions on prioritizing factors in improving relationships depend on their priorities. Nonetheless, simulations show that establishing a harmonious system benefiting all parties is possible. However, achieving this requires adjustments to demand, pricing, trust, and risk attitudes of key players, which may not align with the preferences of some parties in reality.