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Procurement Price Level Acceptable to Both Farm Producers and Processors

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  • Rembisz, Włodzimierz

Abstract

The aim of the paper is to demonstrate that for a given procurement price there is a certain equality accepting mutual benefits for both farm producers and agri-food processors. This allows transactions to be made at the procurement price level which is allowable and mutually acceptable due to the benefits. The benefits do not have to be equal, hence the concept of acceptable inequalities. The paper shows the basis for expecting the procurement price level, and therefore the benefits from the producer’s and processor’s point of view. They result from their maximised goal functions. Both parties are price-takers for the procurement price established on the purchase market, with a reference to price determination at the administrative level. The hypothesis about the acceptable inequality is proven in logical and formal analysis with the use of algebra notations and rules. By and large, this has not been addressed in the literature.

Suggested Citation

  • Rembisz, Włodzimierz, 2020. "Procurement Price Level Acceptable to Both Farm Producers and Processors," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 311261, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    • Handle: RePEc:ags:iafepa:311261
    DOI: 10.22004/ag.econ.311261
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    References listed on IDEAS

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    1. Yoshihiro Maruyama & Tadashi Sonoda, 2011. "A Theory of the Producer-Consumer Household," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-34668-0, March.
    2. Jayson Beckman & David Schimmelpfennig, 2015. "Determinants of farm income," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 75(3), pages 385-402, September.
    3. Unknown, 2014. "The CAP and competitiveness of the Polish and European food sectors," Multiannual Program Reports 236647, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
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    Keywords

    Agricultural and Food Policy; Farm Management;

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