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Small farmers in the Romanian dairy market: Do they have a future?

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  • Pieniadz, Agata
  • Hanf, Jon Henrich
  • Voicilas, Dan Marius
  • Wegener, Stefan
  • Goetz, Linde

Abstract

This paper investigates various modes of vertical coordination, with the focus on small farm integration in the Romanian dairy chain. It draws on results from a World Bank study based on semi-structured interviews conducted in spring 2009. The findings indicate that large and prosperous dairy chains fortify their chain efficiency by partner selection and provision of sophisticated assistance to relatively larger farmers. On the contrary, many barriers exist for small and medium-sized dairy chains (processors and farmers). The main factors hampering their potential exploitation are restricted access to inputs markets (capital, know-how) as well as poor quality of input service (agricultural service delivery, veterinary issues). The majority of cow's milk in Romania is still delivered by small farmers who have difficulties fulfilling the requirements of the modern procurement systems. However, small farmers are a relatively heterogeneous group. Hence, different development paths can be expected. In addition to working with retail chains via strengthening horizontal integration, another opportunity for small dairy farmers is to occupy a market niche. Nevertheless, some small farmers will have to leave the dairy market.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 111th Seminar, June 26-27, 2009, Canterbury, UK with number 52861.

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Date of creation: 20 Aug 2009
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Handle: RePEc:ags:eaa111:52861

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Keywords: vertical coordination; small farms; Romania; dairy.; Livestock Production/Industries;

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