The Concept Of Integrated Profit From Contractual Relationship. The Case Of Transactions Between Agricultural Producers’ Groups And Agri-Food Sector

The concept of integrated profit offers a theoretical framework for a holistic analysis of contract goals between agricultural producers’ groups and agri-food sector. The theoretical background applied in this paper is the contract theory. The primary purpose being the identification of vertical coordination forms between producers’ organizations and agri-food sector. Consequently, the specific goal was to recognize price mechanisms in contracts and their analysis in the context of the integrated profit (only in the field of coordination). The research focused on contracts signed in 2014 between groups operating on poultry market and their first buyers. The survey (collection of primary data) was conducted in the period March-May 2015 through the Computer Assisted Telephone Interview. The main first buyer of producers’ groups were processing plants. Almost 50% of groups used to sell their outputs through contracts. The fixed price was the most frequently used price formula in contractual relationship. Consequently, more risk were taken by first buyers. The second most popular price formula was the market price on delivery day which can be treated as an unduly burden for producers’ organizations, although it may also support production coordination through price signals.