What product mix do they offer and what marketing channels do they use? – Exploring agricultural producer organisations’ heterogeneity

Abstract

Agricultural producer organisations, the entities which aim at grouping farmers together, have become increasingly important in the food supply chain. In addition, they are widely viewed as having the potential to considerably contribute to rural people's wellbeing. Yet, we have only a limited understanding of the way in which these collective action organisations operate on the market. In response to this, the paper makes two contributions. First, our research documents an enormous variety in market behaviour of these organisations. This concerns both the product mix they offer and marketing channels they use. Second, drawing on recent advancements in theories of the firm, our analysis seeks to provide some insights on the nature and determinants of this heterogeneity. While the evidence we provide reflects merely conditional correlations, it points to two interesting regularities. On the one hand, it suggests that supplying large retail chains is positively associated with the organisations' size and openness to accept deliveries from non-members. On the other hand, it suggests that organisations operating in a more competitive environment offer less products than organisations that face lower pressure from the competition. Our specific example comes from the fruit and vegetable sector in Poland, a country which is among the biggest fruit and vegetable producers in the European Union.