Implications of horizontal and vertical relationships on farmers performance in the Brazilian pork industry

Abstract

According to the literature, vertical and horizontal relationships are of key importance to farmer performance. However, most studies have examined these relationships using distinct models. This paper contributes with new insights to the supply chain management and network theories by using a single model to analyse how horizontal relationships impact on vertical relationships and how these jointly affect the performance of Brazilian pig farmers. Data were obtained from 269 farmers delivering pigs through contracts and spot markets in southern Brazil. The results demonstrate that both vertical and horizontal relationships can improve farmer performance. Moreover, horizontal relationships positively influence vertical relationships by improving the exchange of information between farmers and buyers. Furthermore, the findings suggest that these relationships are sensitive to the context (spot market or contracted production) in which the transactions are executed. The study draws relevant management implications for pig farmers, buyers and farmer associations.