Optimizing the Agricultural Value Chain through Cooperation – Empirical Policy Advice for Bavaria
Dr. Corina Jantke
Cooperation is an appropriate instrument for every farmer to strengthen operations and improve the value chain, irrespective of its design—horizontal, vertical, or diagonal. Cooperation supports the optimizing of costs and labor time. Success is most likely if cooperation reaches beyond the collaboration of colleagues within the same value chain by including down- and upstream companies of the same region. Particularly in Bavaria, cooperation amongst the high number of small agricultural and rural family businesses affords the opportunity for maintaining competitiveness in production and marketing, and hence retaining income within the region.
Regardless of the potential advantages of cooperation, different concerns still keep farmers from collaborating with competitors and affiliates. The high levels of efficiency, productivity and cooperation form an essential aspect of improving their economic capability and standing within the value chain. Both the technical literature (lack of empirical work on this topic) and operational experience fail in providing a suitable approach on how to measure the success of cooperation.
This research project focuses on the following aspects:
• Relevance and stability of cooperation within agriculture
• Motivation of partners for cooperation
• Parameters for the collective success of cooperation and their design
• Economic effects of different cooperation models
• Perception of the cooperation model´s success by its members
• Actions taken by the affiliates and their effects on the success of the cooperation model and the dependence of the partners´ standing within the value chain
• Experiences with cooperation in neighboring European states
• Benefits and options of how to promote cooperative behavior
• Design and combinations of state actions for increasing the probability of cooperation and its stability
• Contribution of the Bavarian Agrarwirtschaftsgesetz [agricultural economic legislation] in promoting cooperative collaboration
Course of action: Record different kinds of cooperation and their meaning within the European agricultural sectors alongside the value chain and categorize them according to existing cooperation in various sectors and regions. Then investigate the economic effects of such cooperation and their organizational stability from a theoretical perspective. Thereafter, formulate hypotheses for increasing economic capability of cooperation. Then choose various sectors with differing forms of cooperation, company specific data sets and analyze for efficiency, cost-effectiveness, members’ income etc. in the empirical part of the project with using statistical tools such as regression analyses. Enrich these data sets with the results of surveys spread to producer and working partnerships. Finally, conduct choice experiments for identifying proper business and policy actions for initiating and strengthening cooperation in individual sectors.
The project is undertaken in cooperation with the Bavarian Central Authority for Agriculture (LfL), Institute for Food Industry and Markets.
It is funded by the Bavarian Ministry for Nutrition, Agriculture and Forestry (StMELF).