Recursive failure cycles in emerging agricultural innovation systems: evidence from Thai cocoa value chain

Systemic failure theory explains why innovation systems underperform, yet knowledge, network, institutional and infrastructure failures are often treated as separable constraints. This research develops a recursive account of systemic failure in emerging agricultural innovation systems, showing how failures become mutually reinforcing across value-chain nodes when intermediary architecture is thin. Drawing on thirty semi-structured interviews with growers, processors and distributors across eleven community enterprises in Chiang Mai and Chiang Rai and a two-stage yield-gap benchmark, the study examines the Thai cocoa value chain through an integrated systemic failure and innovation-functions framework. The findings show that yield and quality shortfalls are empirical traces of blocked innovation functions. Weak agronomic and post-harvest knowledge diffusion, thin grower-processor learning relationships, inaccessible certification and traceability pathways and sub-scale fermentation and drying infrastructure interact to reproduce underperformance. These interactions move downstream through heterogeneous supply and co-fermentation, and upstream through undifferentiated commodity prices that dampen upgrading incentives. The research contributes to innovation systems theory by conceptualising recursive failure as a value-chain mechanism through which structural failures suppress innovation functions over time, while explaining why local craft cocoa experimentation in Northern Thailand has not yet generated system-wide upgrading in the Thai cocoa value chain.