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Benefits of horizontal integration in Polish agriculture as exemplified by groups of agricultural producers

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  • Bajan, Bartholomew
  • Czubak, Laurence

Abstract

The aim of the study is to indicate the benefits resulting from membership in producer groups in relation to the prices obtained for their products by cooperating farmers, and consequently, also to assess the validity of supporting activities aimed at improving horizontal integration in agriculture through agricultural policy. A comparison was made of the prices of individual agricultural products obtained by members of producer groups with the average purchase prices in the country (recorded by the Central Statistical Office). Differences in revenues between individual entities resulting from a comparison of alternative situations were also indicated. The analysis shows that in all the industries studied (oilseeds, potatoes, cereal grains, milk) the prices obtained by cooperating farmers were higher than the average national purchase prices. Moreover, assuming identical sales volumes as in producer groups, they obtained significant advantages in revenues over other market participants. This indicates a relatively higher market power of the associating farms. From this point of view, public support directed at improving horizontal integration is justified.

Suggested Citation

  • Bajan, Bartholomew & Czubak, Laurence, 2018. "Benefits of horizontal integration in Polish agriculture as exemplified by groups of agricultural producers," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 180(3), September.
    • Handle: RePEc:ags:polvaa:344536
    DOI: 10.22004/ag.econ.344536
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    Keywords

    Agribusiness;

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