Farmers’ Bargaining Power and Input Prices: What Can We Learn from Self-Reported Assessments?1

Malak-Rawlikowska, Agata; Milczarek‐Andrzejewska, Dominika; Fałkowski, Jan

doi:10.3390/socsci8020063

Cited by 11 publications

(11 citation statements)

References 28 publications

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“…The core of entrepreneurship is taking responsibility for and making decisions that affect the location, form, and use of the goods and resources of a business [56]. These decisions result among others in the bargaining position of farmers versus their contractors, which depend not only on the classical factors such as resources, quality attributes, and scales of operation or location, but also on qualitative determinants as relationships, both vertically within the chain, as well horizontally with other farmers [57,58]. The issue of farmers' power in the agri-food chain is widely discussed [59][60][61].…”

Section: Literature Reviewmentioning

confidence: 99%

Developing a Methodology for Aggregated Assessment of the Economic Sustainability of Pig Farms

et al. 2021

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The economic sustainability of agricultural production is a crucial concern for most farmers, especially for pig producers who face dynamic changes in the market. Approaches for economic sustainability assessment found in the literature are mainly focused on the short-term economic viability of the farm and rarely take a long-term perspective. In this paper, we propose and test a new, innovative assessment and aggregation method, which brings about a broader view on more long-term aspects of economic sustainability. This wider view on economic sustainability, in addition to classical concepts such as technical efficiency, labor productivity, and farm profitability, incorporates the assessment of the levels of entrepreneurship, risk management, and the resilience of the invested resources. All indicators were scaled and aggregated using scaling and weighting procedures proposed by experts into subthemes and themes. The methodology was tested on a sample of 131 pig farms located in 6 EU countries: Germany, Italy, the Netherlands, Poland, Finland, and Austria. We hypothesized that closed-cycle farms might be economically more sustainable than those farms that are specialized in pig breeding or finishing. The results showed that closed-cycle farms do indeed have advantages in terms of raising healthy animals and having slightly better overall resilience of resources, however specialized breeding and finishing farms appeared to be more sustainable in the areas of profitability, risk management, and reproductive efficiency. Our approach supports evidence-based economic sustainability assessments of pig farms and provides a tool that can be used for economic sustainability improvement strategies for farms.

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Section: Literature Reviewmentioning

confidence: 99%

Developing a Methodology for Aggregated Assessment of the Economic Sustainability of Pig Farms

et al. 2021

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“…Other studies emphasize the behaviour of intermediaries when they have market power: for instance, Merel et al (2009) argue that high transportation costs can be an important factor that increases the market power of middlemen. Xhoxhi et al (2014), Fałkowski et al (2017, Bonanno et al (2018), andMalak-Rawlikowska et al (2019) also address the question of market power and bargaining in agrifood markets. In the case of Vietnam, Thanh (2017Thanh ( , 2018 constructs an industrial organisation model for developing countries, analysing the market power of middlemen and their behaviour in the traditional food distribution system.…”

Section: Literature Reviewmentioning

confidence: 99%

An industrial organisation model for the Vietnamese food retail market

Thanh

2021

EKON ANAL

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Using the case of Vietnam, this paper proposes an industrial organisation model of the food distribution system in developing countries. Since most work in this field has adopted an empirical approach, this paper will instead focus on a theoretical model based on the theory of imperfect competition applied in agricultural economics. We introduce two distribution channels of product differentiation linked vertically by demand, and study the quantity flow from small producers to consumers by means of a Nash equilibrium. We show that there is a Nash equilibrium of the food distribution system and market power, with effects on both farmers and consumers. The paper discusses the implications of these results and proposes policies to intervene in the market and mitigate its power to improve the wealth of both farmers and consumers. The competitive market model of the food distribution system presented in this paper is also important in analysing the policy implications of a food market with imperfect competition in developing countries.

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“…One of the unique results dealing with the vertical linkages of the farmers in the supply chain, and the role of self-reported bargaining power, was presented in research by Malak-Rawlikowska et al 2018;Malak-Rawlikowska and Milczarek-Andrzejewska 2016;Milczarek-Andrzejewska, Malak-Rawlikowska and Fałkowski 2015). Examining the vertical relations in the dairy chain from the point of view of milk producers, the authors noted that the level of integration differed significantly depending on forward or backward relationships.…”

Section: Hold-ups and The Degree Of Vertical Integrationmentioning

confidence: 99%

“…A Polish dairy-sector study (for more see Malak-Rawlikowska and Milczarek-Andrzejewska 2016;Malak-Rawlikowska, Milczarek-Andrzejewska and Fałkowski 2018) showed that the farmers source feed from two main channels: direct purchase from a feed-producing company and purchase from an intermediary in the animal feed sector (e.g. local feed shops).…”

Section: Hold-up Range and Durability Of Relations -An Empirical Examplementioning

confidence: 99%

Are Farmers Trapped in Hold-Up Relationships with their Contractors in the Supply Chain? The Case of Dairy Farmers and Feed Suppliers

Malak-Rawlikowska

2018

wir

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Agricultural production is widely discussed in the context of imbalances in bargaining power in the food chain and farmers’ difficult position relative to their contractors. The paper attempts to explain the nature and reasons of the bargaining power imbalances that may lead to hold-up relationships in the farming sector in the light of the Transaction Costs Theory (TCT). In order to provide a certain focus, the theoretical discussion is illustrated by an empirical example of backward vertical relations between farmers and input (feed) suppliers. The article investigates the reasons for long-term and stable relationships between farmers and feed suppliers and whether these may be partly explained by an imbalance in bargaining power, trapping farmers in the specific monopolistic (hold-up) relations with their contractors.Overall, the picture that emerges from the analysis does not support the assumptions that farmers are experiencing a large imbalance in bargaining power with regard to their input contractors, and are trapped in a specific monopolistic (hold-up) relationship with them. Despite that there is no written contract between the farmers and their suppliers, relations are based on unwritten, privately enforced terms. The parties tend to respect the mutually agreed relationship rather than breaching it ex-post in order extract the holdup quasi-rents. In this case a binding written supply commitment may increase transaction costs, limit the freedom to change supplier and reduce the farmer’s bargaining power over the feed producer by adding additional inter-dependency.

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Farmers’ Bargaining Power and Input Prices: What Can We Learn from Self-Reported Assessments?1

Cited by 11 publications

References 28 publications

Developing a Methodology for Aggregated Assessment of the Economic Sustainability of Pig Farms

Developing a Methodology for Aggregated Assessment of the Economic Sustainability of Pig Farms

An industrial organisation model for the Vietnamese food retail market

Are Farmers Trapped in Hold-Up Relationships with their Contractors in the Supply Chain? The Case of Dairy Farmers and Feed Suppliers

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