Whether an Effective Innovation System is Inevitable for Sectoral Value Chain Development? Evidence from Coconut Sector in Kerala^§

The study has integrated the concept of sectoral system of innovation and value chain theory to find the regional dynamics of an evolving commodity chain. It has captured the reflections of tender coconut sector from the comprehensive study conducted in the Kasaragod district of Kerala. The coconut innovation system in India lacks strategic collaboration among various stakeholders and therefore is characterized by an array of actors/agencies operating at various levels without channelizing their efforts for the enhancement of the sector. The characteristics of this weak sectoral system are apparently reflected in tender coconut sector. The tender coconut value chain of Kerala has been found middleman-driven, which offers only a meager value share to the producer/farmer. For upgradation of position in the chain, the producers should proactively function in a group mode and should integrate the domestic value chain. According to the study, for ensuring a bargaining position for the producer, the chain should be restructured from the middleman-driven one to producer-driven. The study has argued that the support of an effective sectoral system of innovation is inevitable for the development of the sub-sectoral commodity chains.