The role of agricultural commodity exchanges in promoting agricultural sustainability

a systematic review of evidence, indicators, and challenges

Resumen

The sustainability of the agriculture sector is one of the key pillars for economic development and food security and involves efficient, transparent, and coherent market systems. The agricultural commodity exchanges, as a new institution in the agricultural product market, has a critical role to play in defining price transparency, or reducing transaction costs, improving product quality and standardization, and reducing market risk. The article explores the agricultural commodity exchange contribution to sustainable agriculture sector activity with a systematic review methodology. In doing so, the three dimensions of agriculture sustainability, economic, social and environmental are reviewed and analyzed in terms of the complementary mechanisms in which the interacts with each dimension based on Australian and international studies. The findings indicate that agricultural commodity exchanges can provide a basis for increasing farmers' income, increasing added value, augmenting exports and reducing price volatility through transparent information infrastructure and engendered competition. Nonetheless, obstacles such as a deficient technical institution, resistance of traditional structures and inadequate operator awareness restrict the full potential of this market. Suggestions will be made to facilitate a strengthened role for the agricultural commodities exchange on the trajectory of agriculture sector sustainability.