How do Farmers interact with Input Suppliers: Some Evidence from the Dairy Sector in Poland

The extensive and growing literature on food supply chain has been mainly focused on relations between farmers, processing and retail sectors. Various studies have investigated for example the determinants of supply chain relationships (e.g. Dries et al., 2014) and a situation of small-scale producers in the face of rapid supply chain restructuring (e.g. Briones, 2015; Vorley et al., 2007). However, a systematic understanding of how farmers interact with input suppliers is very scarce. In response to this, the paper aims at improving our knowledge about farmers’ relations with input suppliers.The specific example that we examine comes from the Polish dairy sector, which seems to be particularly well suited for investigating relationships within the food value chain. On the one hand, fragmented structure of local farms, and poor income situation of small agricultural holdings are frequently emphasised (Milczarek-Andrzejewska, 2014). On the other hand, Polish dairy and feed sectors have undergone a thorough modernisation (Dries et al., 2011; Piwowar 2013). Rising farmer demand (due to production technology change being necessitated by milk productivity improvement) and increased competition in the feed sector have led to new vertical relations between the farm and feed production segments. Vertical coordination took many forms, including contracting, advisory programs, financial support etc. However, the existing theoretical and empitical literature on vertical spillovers through backward linkages (i.e. from buyers to suppliers) is scarce and focused on manufacturing (Kuijpers, Swinnen, 2016; Jarzębowski, 2013).A study on the relationship between dairy farmers and feed producers means that we examine also the relations between two agri-food chains. These two – dairy and feed – supply chains are vertically connected. The feed supply chain ends at the farm level where the feed is finally used in the milk production process, and where the dairy supply chain starts. Our study allows then to characterize the “boundary” segments of supply chains

The Bargaining Power of Farms in Food Chains

The article reviews the theoretical arguments and conclusions of empirical studies on the bargaining power of farms in contemporary food chains. Theoretical inspirations are mainly drawn from the new political economy and new institutional economics. The author puts forward a thesis that the bargaining power of farms depends on both their resources (economic power) and the possibilities for influencing decision makers (political power). The following market factors influencing the bargaining power of farms are analyzed: market structure, the level of economic resources held, transaction costs, and the scope of cooperation. In addition, political factors are identified: the distribution of voter preferences in society and the influence of agricultural organizations, which are important interest groups. The author attempts to bring order to the definitions and methodological approaches used in the analysis of bargaining power. The article identifies areas for further research with a special emphasis on research into the political power of food chain players and on the need to combine this power with economic power.Celem artykułu jest przedstawienie argumentów teoretycznych i wniosków z badań empirycznych dotyczących siły przetargowej gospodarstw rolnych we współczesnych łańcuchach żywnościowych. Inspiracje teoretyczne czerpane są głównie z nowej ekonomii politycznej i nowej ekonomii instytucjonalnej. Sformułowano tezę, że siła przetargowa podmiotów zależy zarówno od posiadanych zasobów (siły ekonomicznej), jak i od możliwości wpływania na sferę polityczną (siły politycznej). Analizowane są następujące czynniki rynkowe wpływające na siłę przetargową gospodarstw rolnych: struktura rynku, wielkość posiadanych zasobów ekonomicznych, wielkość kosztów transakcyjnych i zasięg współpracy. Dodatkowo pokazano czynniki polityczne: rozkład preferencji wyborców w danym społeczeństwie oraz wpływ organizacji rolniczych jako ważnych grup interesu. W artykule podjęta została próba uporządkowania definicji i podejść metodologicznych wykorzystywanych w analizie siły przetargowej. Wskazano obszary dalszych badań, kładąc nacisk na analizy dotyczące siły politycznej podmiotów w łańcuchach żywnościowych i na konieczność powiązania tej siły z siłą ekonomiczną

Land Use Conflicts And The Common Agricultural Policy: The Case Of Poland

Urban sprawl is one of the most important reasons behind conflicts over farmland use. In that context, agricultural policy can be perceived as a guardian protecting farmland for agricultural purposes. The paper aims at investigating the role of the Common Agricultural Policy (CAP) in shaping farmland market in Poland. With use of regional Computable General Equilibrium (CGE) model we found out that CAP has led to farmland price distortions in most Polish regions but at the same time it has allowed to maintain land in agricultural use particularly in regions which heavily depend on agriculture and have fragmented farm structure

The resources and channels of influence of farmers’ associations - evidence from Poland

This paper aims to contribute to the existing studies on interest groups’ influence on agricultural policies. The article uses a survey conducted with leaders and members of farmers’ associations to assess the tangible and intangible resources of these organizations in Poland, as well as the channels they use to influence agricultural policy. The results show that farmers’ associations in Poland may influence agricultural policy only to a small degree. This results from their insufficient resources, especially those that are useful for politicians (e.g. expert knowledge). The second obstacle stems from the lack of unity and cooperation between these associations

How do Farmers interact with Input Suppliers: Some Evidence from the Dairy Sector in Poland

The extensive and growing literature on food supply chain has been mainly focused on relations between farmers, processing and retail sectors. Various studies have investigated for example the determinants of supply chain relationships (e.g. Dries et al., 2014) and a situation of small-scale producers in the face of rapid supply chain restructuring (e.g. Briones, 2015; Vorley et al., 2007). However, a systematic understanding of how farmers interact with input suppliers is very scarce. In response to this, the paper aims at improving our knowledge about farmers’ relations with input suppliers. The specific example that we examine comes from the Polish dairy sector, which seems to be particularly well suited for investigating relationships within the food value chain. On the one hand, fragmented structure of local farms, and poor income situation of small agricultural holdings are frequently emphasised (Milczarek-Andrzejewska, 2014). On the other hand, Polish dairy and feed sectors have undergone a thorough modernisation (Dries et al., 2011; Piwowar 2013). Rising farmer demand (due to production technology change being necessitated by milk productivity improvement) and increased competition in the feed sector have led to new vertical relations between the farm and feed production segments. Vertical coordination took many forms, including contracting, advisory programs, financial support etc. However, the existing theoretical and empitical literature on vertical spillovers through backward linkages (i.e. from buyers to suppliers) is scarce and focused on manufacturing (Kuijpers, Swinnen, 2016; Jarzębowski, 2013). A study on the relationship between dairy farmers and feed producers means that we examine also the relations between two agri-food chains. These two – dairy and feed – supply chains are vertically connected. The feed supply chain ends at the farm level where the feed is finally used in the milk production process, and where the dairy supply chain starts. Our study allows then to characterize the “boundary” segments of supply chains

Relacje rolników z dostawcami środków produkcji – na przykładzie sektora mleczarskiego w Polsce

The paper aims at improving our knowledge about farmers’ relations with input suppliers and analyses the backward vertical spillovers between the “boundary” chains. It uses a micro-data on dairy sector in Poland to elicit farmers’ opinions on their cooperation with feed suppliers and confront them with farmers’ actual behaviors. We find that dairy farmers have on average a long and stable cooperation with feed suppliers. A great majority of the respondents perceive their relationship with feed supplier as either good or very good. The relation between farmer and feed supplier is usually not formal (over 90% of farmers do not have any written contract). Price level and the quality of feed is the most important feature of the relation mentioned by farmers. However, we observe significant differences in the farm characteristics, obtained discounts, possibilities of the price negotiations, etc. depending on the channel of the feed supply. Despite no significant difference in farmland size, farmers who purchase feed directly from feed producer have a significantly larger milk production and receive significantly higher discount from the feed supplier than farmers purchasing feed from an intermediary. This group of farmers is also more active in price negotiations and more often considers changing their supplier