Improving mill value chain by coupling sugarcane supply management and payment system models

Research in the sugar industry value chain has been mainly focused on logistical opportunities and primarily on the upstream of the milling sector. Recent research has begun to address opportunities in information transparency, collective participation, value sharing and payment incentives. Because of co-product developments, some millers tend to modify both supply management and payment system. In practice, implementing such modifications requires technical solutions, economic assessments and collective participation of millers and growers. This paper presents a decision support system, called COMPA, to assess economic impacts on the sugarcane value chain of new supply planning and new cane payment systems. The COMPA software is the result of coupling two existing tools: MAGI®, assessing the impact of new supply chain management on global value production, and PEMPA®, assessing the impact of new cane payment systems on growers' revenue and on revenue sharing between stakeholders. COMPA scenarios outputs are compared on the basis of the total production, the individual revenue and the value sharing including sugar and co-products. The results can be used to support and facilitate negotiation between millers and farmers. The COMPA software has been used on Reunion Island to compare two different supply chain scenarios and payment systems. Simulations highlighted opportunities for improving sugar industry efficiency while facilitating the negotiation process between millers and farmers.