How can producers access the modern agri-food chain? A Central and Eastern European perspective.

Abstract

Abstract This article reviews the empirical literature on how farmers can access the modern agri-food chain in Central and Eastern Europe, with special emphasis on small-scale producers. We focus on two questions: on farmer-buyer relationships and the credit market imperfections. We briefly describe common theoretical approaches including transaction costs economics, economics of enforceable contracts and augmented accelerator model. Empirical results suggest that after almost two decades since the beginning of transition, the adjustment problems of farmers in these countries are more general, and many of them are not specific to small-scale farms. However, some issues are more severe for small-scale farms as a lack of enforceable contract arrangements and cooperation among farmers, the low level of trust in trading partners and difficult access to credit markets. Note that empirical evidence is far from exhaustive, especially for small-scale farms. Thus we need more research on these fields focusing on more countries and more food chains, including more carefully developed theoretical models as a base for empirical research.