Producer organisations in the meat sector

For the French market Dr Duvaleix-Tréguer noted striking differences between the number of recognised POs in the F&V sector (254) and in the pig sector (37). However, whereas the recognised POs in the F&V sector cover only 50% of production, in the pig sector 89% of the production are covered. Dr Duvaleix-Tréguer also described how each sector organises itself differently. Whereas in the French dairy sector 50% of production is done by cooperatives, the other 50% are done by POs, which negotiate framework agreements with industry. In the pork sector, there is a high prevalence of economic POs, but not all of them are organised in the form of a cooperative. She presented a case study on the marginal costs in hog production that distinguished between ‘independent' POs that concentrate supply (horizontal cooperation), ‘marketing' POs that have links with downstream operations (slaughterhouse), and ‘supply & marketing' POs that have also links with upstream operations (feed). Members of supply & marketing POs have the lowest marginal costs (i.e. the costs of increasing or decreasing production by one head), possibly because they are mostly joined by large and efficient farms or because they can realise economies of scale for their members. Compared to the marginal costs, the output price that members of supply & marketing POs receive is relatively high. More generally, membership in POs can increase the efficiency of producers and, in particular, quality schemes that are operated by POs can increase the overall value-added in the food supply chain.