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Journal of Rural Studies 17 (2001) 443–456
Costs and benefits for farmers participating in innovative marketingchannels for quality food products
Ingrid Verhaegen, Guido Van Huylenbroeck*
Department of Agricultural Economics, Ghent Uni versity, Coupure Links 653, 9000 Gent, Bel gium
Abstract
The extra benefits and costs for farmers participating in six innovative marketing channels for quality products in Belgium are
analysed. A theoretical model serves as an analytical device to structure the qualitative comparisons with the common marketing
channel and with direct sale. The analysis is mainly qualitative, because many benefits and costs cannot be quantified exactly. In theanalysis, transaction costs are explicitly taken into account because they constitute a real cost when switching from a common to an
innovative marketing channel. In all six marketing channels, higher costs are compensated for by higher revenues due to higher
prices and a higher turnover and by reduced uncertainty. These factors encourage farmers to enter quality food projects. In addition,
we found that co-operation decreases transaction costs and that collective initiatives enable farmers to enter the pathway of quality
food production without investing excessive labour or capital. r 2001 Elsevier Science Ltd. All rights reserved.
1. Introduction
In recent years, the Belgian food market has been
characterised by an increased production of processed
farm products, labelled and regional products, oftencombined with the development of new marketing
channels. There are several reasons for this. Farmers
are looking for new sources of income as prices decrease
and all kinds of regulations (European, federal and
regional) impose production limits. In addition, con-
sumers demand better food quality and safety, ecologi-
cal agriculture and regional products. While some
farmers produce and sell farm processed food products
individually, others develop collective marketing chan-
nels to sell quality food products. Since the relative risks
and benefits of participating in these collective market-
ing channels are unclear, we examined the economic
incentives for farmers to participate in these emerging
collective quality food marketing channels. After
describing the context in which these initiatives are
emerging, a theoretical model is used to calculate the
costs and benefits to the farmers.
The theoretical framework is applied on six emerging
marketing channels which have been the subject of a
wider analysis. These six initiatives give a good picture
of the variety of initiatives presented in a 1996 inventory
of initiatives in Belgium (Van Huylenbroeck et al.,
1998). They are: Farmers’ Markets and Foodteams, two
local initiatives that centralise direct selling activities
of several farmers in space and time; Produits deQualit!ee d’Autrefois (ProQA) and Fruitnet, who
manage a marketing channel with labelled products
(beef for ProQA and pip-fruit for Fruitnet); and finally
Fermi"eere de M!eean and Coprosain, two co-operatives
involved in the marketing of fresh and processed farm
products that have developed a common processing
plant for, respectively, cheese and meat products. These
initiatives are described in more detail in Appendix B.
On the basis of the analyses of these six initiatives some
conclusions are formulated.
2. Context in which collective marketing channels emerge
The creation of marketing channels selling quality
farm products is certainly not new. In southern
countries such as Italy and France with their rich
gastronomic traditions and diversity of local products,
such commercialisation chains have always existed (see
e.g. Fanfani et al., 1996; Brasili et al., 1998; Arfini and
Mora, 1998; Bessiere, 1998). In these quality food
channels, direct communication between producers and
consumers is of paramount importance to ensure that
quality is paid for. In the last decade, however, they
*Corresponding author.
E-mail address: [email protected] (G. Van Huy-
lenbroeck).
0743-0167/01/$ - see front matter r 2001 Elsevier Science Ltd. All rights reserved.
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have emerged in all industrialised countries, where they
are promoted as a possible model to respond to the
actual problems faced by agriculture (Hinrichs, 2000).
Battershill and Gilg (1998a) and Grey (2000) present
them as a possible alternative to the industrialised food
market. Without being exhaustive, the emergence of
such ‘alternative’ channels is also described by Nygardand Storstadt (1998), Festing (1998), Chubb (1998),
Fonte (1999), Feenstra (1997), Feensta and Lewis
(1999), Barberis (1999), Westgren (1999), Ilbery and
co-workers (Ilbery and Kneafsey, 1998, 2000; Ilbery
et al., 2000) and many others. As indicated, this paper is
based on research on such alternative channels in
Belgium. More details on the research can be found in
Mormont and Van Huylenbroeck (2001).
The problems and challenges faced by industrialised
agriculture today are multiple. First, there is a produc-
tion challenge: the ‘‘productivist’’ model of the past,
promoted and supported by EU-policy, has touched
upon the limits of its own success. Because of thebudgetary implications and the international competi-
tion, a model based on a further increase of the
productivity and efficiency will result in a further
reduction of the agricultural population. In addition,
environmental issues preclude a further increase of the
production in several European regions. Consequently,
the income of progressively more farmers will margin-
alise. According to recent statistics of the Belgian
National Institute of Statistics, about 22% of profes-
sional farms in Flanders have an economic dimension
(measured in European Standard Units) which is too
low to survive if they cannot create additional addedvalue. The concentration of production in some areas
and the need to increase efficiency also leads to further
normalisation and standardisation of the production.
This inevitably leads to a reduction in the diversity of
available commodities and an increase in sanitary and
other risks.
Second, there is a demand problem: with increased
purchasing power and under pressure of recent food
scandals, new consumer demands with respect to food
have emerged. Today, a demand for low cost food co-
exists with an increased interest in quality foods and
certainly with a demand for food safety. Third,
standardisation of production practices leads to social
marginalisation (less farmers in rural areas) and to loss
of rural identity, bio-diversity and landscapes. This,
paradoxically, happens at a time when increased
purchasing power increases the demand for environ-
ment-friendly goods and services, rural tourism and
recreation. These phenomena indicate that there is a
problem of externalities (both positive and negative) not
remunerated by the agro-industrial markets.
In this context, a number of rural actors (farmers, but
also consumers and local citizens), have been searching
for new production and marketing models for quality
foods in an attempt to reconcile the interests of
producers (creating added value), consumers (food
quality and health) and citizens (environmental and
local development concerns). Bowbrick (1992) Batters-
hill and Gilg (1998b) and Ilbery and Kneafsey (2000)
recognise that quality construction is a complex process.
Marsden and Arce (1995) indicate that quality is a socialconstruction. Murdoch et al. (2000) emphasise the link
with the nature and local embeddedness of supply
chains. Feenstra (1997) stresses ecological soundness,
social equity, and democracy as important issues while
Holloway and Kneafsey (2000) emphasise ecological,
ethical and community awareness as important elements
for consumers at farmers’ markets. A number of French
authors such as de Sainte-Marie et al. (1995) de Sainte-
Marie and Valceschini (1996), Lassaut and Sylvander
(1998), Raynaud and Valceschini (1997) and Valceschini
and Maze (2000) also emphasise the importance of non-
tangible aspects of quality.
Since conventional marketing channels are based onindustrial co-ordination, quality efforts that are not
reflected in tangible features of the product are not
financially rewarded. Therefore, there is a need for new
organisational models for production and distribution
channels that promote and reward non-tangible quality
characteristics and that compensate farmers for extra
efforts and costs. The central focus of this paper is to
analyse how well the innovative marketing channels that
we mentioned before have succeeded in this objective
and whether or not they have been able to create enough
added value for the participating farmers.
That innovative marketing channels create enoughadded value to financially reward participating farmers
is not as obvious as it might seem: not only do the
required changes in production practices create higher
costs, but so does setting up of a new marketing channel.
In innovative production and marketing channels farm-
ers often take over such market functions as packaging,
transport, selling and sometimes even processing and
transformation. In addition, establishing a market
channel also creates some extra costs which in literature
are commonly identified as ‘‘transaction costs’’ (Hobbs,
1995). These are costs associated with the organisation
of the transaction between different partners. They
consist of (1) information costs to get the necessary
knowledge to be able to produce and to sell the good; (2)
negotiation costs to get an agreement with the transac-
tion partner; and (3) control costs to be sure that an
agreement is respected. A production and marketing
channel should be organised in such a way that total
transaction costs are minimised. Hobbs and Young
(1999) argue that transaction costs are a function of
transaction characteristics; the latter are the result of
product and production characteristics which in turn are
influenced in a dynamic perspective by prevailing
consumer preferences, available technologies and exist-
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ing regulations. From this perspective, old production
and marketing channels are only replaced by new ones
when transaction costs can be reduced.
As we have shown before (Verhaegen and Van
Huylenbroeck, 2001), appropriate governance and
organisation of the channel can significantly reduce the
general transaction costs of the channel. However, froma farmer’s perspective, the most important issue is to
analyse the changes in the private transaction costs. This
discussion is not unlike the one with respect to
participation in agri-environmental measures (Falconer,
2000). Holleran et al. (1999) indicate that collective
quality assurance systems have the potential to reduce
transaction costs, and therefore could be an incentive
for entering such schemes. We therefore hypothesise
that innovation will only take place if the organisation
of the channel sufficiently reduces private transaction
costs. In addition, we hypothesise that co-ordinated
governance can do this more effectively than pure
market governance in most cases.Transaction costs are mainly assessed in a qualitative
and comparative manner, because a lot of the private
costs linked to the choice of a marketing channel can
hardly be estimated or valued. In a qualitative assess-
ment, the point of reference is important. In this article,
two comparisons are made: (1) between the innovative
marketing channel and the conventional (anonymous)
marketing channel that is not remunerating the specific
product characteristics linked to the changes in produc-
tion practices, and (2) between the innovative marketing
channel and the individual sales of farm (processed)
products at the farm, with the latter having theadvantage of direct contact with consumers, but the
disadvantage is that the individual farmer incurs all the
costs. Both these comparisons are made because these
seem to be the two major alternative outlets for farmers
wanting to sell ‘‘specific’’ products.
3. A theoretical model for the cost–benefit analysis of
marketing channels
To explain the economic reasons why farmers leave
one ‘‘old’’ marketing channel for a ‘‘new’’ marketing
channel, a comparative cost–benefit analysis is neces-
sary. Costs and benefits for the farmer in the ‘‘new’’
(innovative) marketing channel are compared with the
costs and benefits in the ‘‘old’’ marketing channel. While
for most farmers the old channel is the common
marketing channel,1 for some farmers it is the individual
direct sale of farm products. Our analysis follows the
transaction cost economic framework (see Williamson,
1996) in the sense that besides direct production and
commercialisation costs, private transaction costs are
taken into account as well. Transaction costs have been
defined before as costs associated with setting up a
business activity or the exchange of commodities(Hobbs, 1995).
When taking the transaction costs into account, the
following general model can be used as a basis for
comparative cost–benefit analysis:
DP ¼ DPQ DrI DTC; ð1Þ
where D is the difference between the two marketing
channels, P the profit; P the price; Q the quantity; r the
remuneration of the inputs; I the quantity of inputs used
and TC the transaction costs.
In a marketing channel with producer (p), middleman
(m) and salesman (s) the profit functions for the actors
involved arePp ¼ PpQp rpI p TCp; ð2Þ
Pm ¼ PmQm PpQp rmI m TCm; ð3Þ
Ps ¼ PsQs PmQm rsI s TCs: ð4Þ
The profit (P) is the difference between revenues and
costs. The revenues depend on the price (P) and the
quantity (Q) sold. The costs are threefold: (1) purchas-
ing costs of the basic product for actors further in the
chain; (2) costs for the use of inputs (I ) that have to be
paid a remuneration (r); and (3) transaction costs (TC).
The profit of the total marketing channel is the sum of the profits of all actors in the channel: the revenues of
the salesman less the costs of the resources used by
producer, middleman and salesman and less the
transaction costs of producer, middleman and salesman
(see Appendix A.1).
The addition of costs and revenues for each actor
allows to assess the total relative profitability of a new
marketing channel (e.g., the initiative) in comparison
with an ‘‘old’’ one (e.g., the common marketing
channel). When examining the costs and benefits for
individual farmers in entering an innovative marketing
channel, the difference in profitability DP for the
indi vidual actor is of importance.
Both total and individual levels of analysis are of
interest. Imagine e.g. an initiative that has registered a
(regional) label based on a code of practice for the
participating farmers. The farmers sell the labelled
products through a traditional marketing channel with
producer, middleman and salesman. Suppose that
middleman and salesman use the same resources as in
the common marketing channel (without label) with
which the labelled marketing channel is compared.
Simple calculus (see Appendix A.2) is sufficient to see
that in this case the profitability of the labelled marketing
1The common marketing channel of fruit and vegetables consists of
producers, auctions, wholesalers and retailers. For livestock and meat,
the common marketing channel involves the producer, the livestock
merchant and/or the auction, the slaughterhouse and the butcher. The
milk of the dairy farmer passes through the milk factory, the
wholesaler and the retailer in the common marketing channel.
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channel depends on the net difference between the extra
revenues at the level of the salesman, the extra
production costs of the producers and the difference in
transaction costs for all actors involved. These extra
transaction costs can take the form of contributions to
an organisation controlling the label, but also of
marketing costs to inform consumers about the label,the learning costs of actors to get acquainted with the
new practices and so on.
At the level of the actors, the new marketing channel
has to compensate not only for the higher direct costs,
but also for possibly increased private transaction costs.
That private transaction costs are important can be
shown by a second example. Imagine a farmer who
decides to sell his products directly to the consumer. The
farmer himself has to take over the marketing function
of middleman and salesman. Suppose further that the
farmer has the same revenues as the salesman in the
common marketing channel (Pp1Qp1 ¼ Ps2Qs2). It fol-
lows (see Appendix A.3) that only when the farmer canreduce commercialisation and transaction costs, direct
sale has a positive profitability in comparison with the
common marketing channel. In the case of Farmers’
Markets e.g. where prices are below that of the salesman
(the retailer), the organisation must already generate a
substantial decrease of the commercialisation and
transaction costs for the farmer in order to make the
chain profitable.
Both examples show that total and individual profit-
ability are closely linked. On the one hand, the
organisation of the production and marketing channel
has to be such that individual costs can be decreasedsufficiently in comparison with the benefits realised; on
the other, all costs within the chain must be paid for,
including the transaction costs covered by the inter-
mediate organisation. If the intermediate organisation is
not supported by public funding (e.g. because they
deliver public goods), the new channels will have to
recuperate these costs either by increasing consumer
prices (and thus weakening their market position) or by
asking higher membership or participation fees of
farmers. For these reasons, studying the profitability
for participating farmers provides indirect evidence for
the possibility of recuperating costs by farmers’ con-
tributions and therefore gives insight into the economic
possibilities of the new channels. In the remainder of this
paper we therefore focus on the relative profitability of
the new marketing channels for participating farmers.
4. Cost–benefit analysis of six innovative marketing
channels
As mentioned before, six innovative and emerging
marketing channels have been studied in detail. Briefly,
with Farmers’ Markets and Foodteams, farmers sell
their products directly to the consumer on an organised
basis, either on weekly markets or through a local
consumer organisation. ProQA and Fruitnet, are
labelled, but in terms of intermediates, traditionally
build marketing channels. The former sells meat under
the Blanc Bleu Fermier (BBF) label, while the latter sells
pip-fruit, produced according to integrated productionmethods, under the Fruitnet label. Fermi"eere de M!eean
and Coprosain have been founded by farmers with the
assistance of a few consumers. These co-operatives
produce cheese (Fermi"eere de M!eean) or meat products
(Coprosain) that are commercialised with other non-
processed and processed farm products at different
public markets, in own outlets and directly to whole-
salers, retailers or caterers.
The cost–benefit analysis weighs the differences in
revenues, production costs and transaction costs for the
farmers between the use of the former versus the new
marketing channel (‘‘the initiative’’) as outlet for specific
quality products. For livestock holders (ProQA andCoprosain), dairy farmers (Fermi"eere de M!eean), and fruit
and vegetable growers (Fruitnet, Farmers’ Markets and
Foodteams), the new marketing channel is an alternative
to the common marketing channel. However, for many
of those farmers selling through Farmers’ Markets,
Foodteams, Fermi"eere de M!eean and Coprosain, the
alternative is to sell their products directly to the
consumers on an individual basis. For these initiatives,
an additional comparison is made between the new
marketing channel and the individual direct sale of farm
products.
We do not measure absolute profitability of the newmarketing channels because this would require more
detailed information on incomes; also, in many cases it
is impossible to exactly evaluate or measure transaction
costs (such as e.g., the costs to acquire necessary skills
and information). Therefore, only their relati ve profit-
ability is compared with an alternative outlet for the
commodities produced. The advantage of a relative
comparison is that differences in (transaction) costs need
not be quantified exactly. The differences only have to
be identified and described: getting an idea of their
development in time is enough. The disadvantage is of
course that our analysis does not allow to indicate the
absolute profitability of new marketing channels, which
may be important, e.g. to evaluate the possibilities of the
new marketing channels as a survival strategy for
marginal farmers.
The information for our analyses has mainly been
collected through in-depth interviews with the different
actors involved in the new marketing channels. In
these interviews, the marketing channels were compared
with regard to revenues, production costs and transac-
tion costs. In addition, economic and financial informa-
tion was gathered from the organisations of the
initiatives.
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4.1. Comparison with the common marketing channel
In the first cost–benefit analysis, the situation of the
farmers is compared with the common marketing
channel as reference. The results are presented in Table
1. The first row presents the products for which the
analysis is made. Revenues, production costs andtransaction costs generated by the initiative can be
higher (+), lower () or similar (=) in comparison with
those in the common marketing channel. Finally,
changes in uncertainty about prices and quantities sold
are determined. All the data in this table are based on
facts reported in monographs for each case study
(Verhaegen and Van Huylenbroeck, 1999c). The reasons
for assigning a qualifier (+, , =) are discussed in the
following sections.
4.1.1. Revenues
For the same product, farmers get higher revenues inall initiatives in comparison with the same product in the
common marketing channel. This is mainly due to
hi gher prices in the initiatives. This is not surprising: not
only is obtaining higher prices for quality products a
major objective of these alternative marketing channels,
the higher prices are also the most important reason
quoted by farmers to participate in the initiative. Morris
and Young (2000) also mention this as one of the main
motives for farmers to introduce Quality Assurance
Schemes in UK agro-food production.
In most of the initiatives, the contracts, agreements
and arrangements either explicitly mention a higher
price compared with the market price or mention it
implicitly by using words as ‘‘reasonable’’, ‘‘good’’ or
‘‘fair price’’.2 Fruitnet fixes the price of apples at a price
that is 0.02–0.05 EUR per kg higher than the market
price. Fermi"eere de M!eean pays 0.01 EUR more for a litre
of raw milk than the dairy factory. Fig. 1 illustrates the
higher price farmers get in the co-operative Coprosain:
the lowest prices for bulls paid by Coprosain are
compared with the highest market prices at that
moment. Other examples of price comparisons are given
in Verhaegen and Van Huylenbroeck (1999a, b).
Many farmers emphasise a second source of higher
revenues, namely the good price they get for productsclassified as ‘‘second class’’ under industrialised market
co-ordination. In the common marketing channel, these
products are sanctioned rather hard by a substantial
price difference compared with ‘‘first quality’’ products.
In markets based on domestic co-ordination, this can
often be avoided. For example, livestock producers of
ProQA can sell all their cattle (high or low quality)
through the co-operative at a price higher than market
prices. Another example is that of a fruit producer at the
Farmers’ Market who manages to sell pears with hail
damage (small brown spots) at the price of first quality
pears because the direct contacts with his clients allow
him to explain the reasons for the brown spots,
convincing them on the basis of taste of the intrinsicquality of the pears. This is not possible when selling
through the auctions (the common marketing channel)
where hail damage results in a significant decrease in
quality class and consequently in price. Battershill and
Gilg (1998b) also argue that direct selling has the highest
potential for valuing low-intensive farm practices:
farmers can ask the maximum appropriate price in
return for giving complete information about products,
production and farming methods.
Quantities sold per unit area and/or time period are
comparable between both marketing channels. A small
difference is mentioned by farmers at Farmers’ Markets,
Foodteams, Coprosain and Fruitnet. For the farmers atFarmers’ Markets and Foodteams these quantities are
slightly less because they have to diversify their
production in varieties and in time (e.g. because they
have to have lettuce the whole season). This results in a
slightly lower production than in the case of specialised
seasonal production. In the case of Coprosain, a code of
practice limits the number of animals per square meter
and the age at which the animals are sold (older than in
the common marketing channel). But for both groups
the minor decrease in quantity is fully compensated for
by higher prices.
The integrated production method for pip-fruit resultsin a lower productivity of the orchard due to slightly
higher losses due to pest damages, but the difference is
very small (maximum 10%). The main reason for the
lower production volume of the Fruitnet farmers is the
code of practice of the Fruitnet label which imposes an
extensive orchard structure with a one-row system (thus
lesser trees per hectare) instead of the double-row tree
system commonly used in non-integrated pip-fruit
orchards. But this decreased production is partly
compensated for by the higher percentage of the
production that is classified as ‘‘high quality fruits’’
and thus may use the Fruitnet label.
4.1.2. Direct costs
In the new marketing channels, operational costs in
general are slightly higher than in the common market-
ing channels. The code of practice followed by beef
producers of ProQA and the dairy practices imposed by
Fermi"eere de M!eean do not generate a substantial increase
in the production costs for the farmers. On the other
hand, higher labour costs slightly increase production
costs for pip-fruit producers using the integrated
production practices of Fruitnet. In the Coprosain
marketing channel, the increased production costs are
2These expressions imply that the actual market price is not
considered to be a reasonable price for the average farmer in the sense
that the market price does not reward all the production factors used,
including farm labour.
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caused by the code of practice (animals have to lie on
straw, may only be fed with feed produced at the farm
or in the region, and the fattening period has to be
longer).
With ProQA, Fruitnet and Fermi"eere de M!eean the
direct commercialisation costs3 are similar to those in the
common marketing channels. In Coprosain, farmers
have some extra commercialisation costs such as the
costs for transporting the animals to the slaughterhouse.
While in the common marketing channel these trans-
portation costs are paid for by the cattle merchant,
Coprosain farmers have to pay for it themselves. The
direct sales activity of the farmers selling through
Farmers’ Markets or Foodteams involves transport,
stallage, a license for sale activities, market stall, etc. In
addition, products have to be divided and packed in
smaller quantities in the right packaging material. These
factors all significantly increase commercialisation costs
as compared to a common channel where products are
sold in bulk. Vegetable producers for example weekly
deliver vegetable baskets (an assortment of vegetables of
the season for 1 week cooking) to Foodteams. As
these vegetables are delivered in a plastic bin owned by
the farmers, commercialisation costs are increasedbecause the bins used in the auction are the property
of the auctions which the farmers can hire or even use
for free.
4.1.3. Transaction costs
With respect to information and negotiation costs, a
distinction has to be made between transaction costs
linked to the selling activity or linked to the acquisition
of the necessary production and marketing skills. With
respect to the negotiation costs linked to the selling
acti vity, a decrease of the information and negotiation
costs is only realised in the meat channels (ProQA and
Coprosain). In the common marketing channel for beef,
farmers need to contact several cattle merchants before
an agreement can be reached with any of them. In order
to be able to negotiate a good price, the farmer has to
remain well informed about market conditions and
prices. Since livestock producers of ProQA and Copro-
sain have made agreements with the co-operative on
quality and quantity standards, price standards and on
an agenda to sell, a substantial decrease of the
information and negotiation costs is realised in this
group. In the common market channel, the producer has
to spend at least half a day to find a cattle merchant for
Table 1
Comparative cost–benefit analysis of the new marketing channel and the common marketing channel (with the common marketing channel being the
reference)a
Farmers Farmers’ markets Food-teams ProQA Fruitnet Fermiere de Mean Coprosain
Product Fruit and vegetables Fruit and vegetables Beef Pip-fruit Milk Beef and pork
Revenues
Price + + + + + +Quantity =() =() = = =()
Direct costs
Production =(+) =(+) = =(+) = +
Commericialisation + + = = = +
Transaction costs
Market information + + =
Negotiation + + = (+)
Human skills
Control (+) (+) = + = =
Contribution + + + + + +
Uncertainty
Price
Quantity sold (+) (+) ()
aNote: The signs indicate the direction of the changes in revenues, costs and uncertainty: +: increase; : decrease; =: similar; ( ): minor changes.
Fig. 1. Comparison between minimum liveweight prices for bulls paid
by Coprosain and maximum prices at the market of Anderlecht during
1996 and 1997.
3The direct commercialisation costs are the costs incurred by
preparing the products for sale and include cleaning, packaging,
storage and transport.
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every animal ready for slaughtering, while this is
reduced to half a day or one evening every 3–4 months
(regardless of the number of animals fattened) in the
new marketing channel.
In the common marketing channel for fruit and
vegetables, the negotiation and information costs are
already minimised by the development of the co-operative auctions. Here the initiatives cannot realise
an economy. The same is true for the farmers delivering
milk to the milk factory in the common marketing
channel. It follows that when these farmers get more
involved in the marketing of their products, the
information and negotiation costs rise. However, given
the price and delivery system agreed upon, this increase
is only minor for the milk producers of Fermi"eere de
M!eean. At Farmers’ Markets prices are fixed between
auction prices and retail prices each market-day before
the market starts. This means that farmers have to
gather price information from auctions and retailers in
the neighbourhood. Extra negotiation costs for thesefarmers lie in the quarter of an hour spent every week at
the beginning of the market to negotiate prices in the
price commission, which every farmer selling at the
market has to attend. Farmers delivering through
Foodteams also have to gather extra information about
prices and products (e.g., recipes) and have to negotiate
regularly about prices and quality expectations with the
consumers.
An important aspect of collective initiatives is the
economy in learning costs that can be realised. An
example of this is Fruitnet. The mother organisation of
Fruitnet, GAWI, has acquired specialised knowledgeabout integrated production methods for pip-fruit which
is distributed via the organisation. The Fruitnet farmers
benefit from this by having easier access to this
information than if they should have to collect the same
information under market conditions. Fruitnet also
collects market information and distributes this under
his members. Also in the other initiatives studied, the
learning dimension and investment in human capital
should not be neglected. Farmers participating in the
initiatives can economise on the investment in human
capital which is necessary to realise the innovation. High
economies are realised on private transaction costs
because farmers themselves have to invest less in the
development and acquisition of skills related to the
production practices applied, the transformation pro-
cesses, the legal aspects of market organisation and so
on. The more efficient the flow of information in an
organisation, the more private transaction costs related
to collecting information and acquiring the necessary
skills can be reduced.
How the initiatives have been able to build up the
necessary skills for successful innovation is not the
subject of this article (for more details see Stassart and
Collet, 1999). One of the problems is certainly how
access to this intellectual property can be regulated and
protected, in particular because a lot of the knowledge is
collective and public (e.g. the knowledge on integrated
pest management). Besides providing legal protection of
a collective label or brand name and the detailed
requirements stipulated in the code of practice, organi-
sations also try to increase the specificity of theknowledge in order to make acquisition of or access to
this knowledge outside the organisation more difficult
and expensive. By increasing the service to the partici-
pating farmers the free rider problem is prevented. A few
good examples of this are: (1) market commissioners
taking care of practical details in Farmers’ Markets; (2)
a central organisation searches for new teams and
provides information about sustainable production
techniques in Foodteams; (3) extension is individualised
in GAWI/Fruitnet; (4) information is exchanged on
feeding in the beef channels. The more specific and
complex the innovation, the more difficult it becomes for
others to copy it.Depending on the degree of protection needed and
desired, contractual relationships will differ. For Farm-
ers’ Markets for example an agreement with the village
authorities is sufficient to prevent a similar initiative
from being started in the neighbourhood. Further,
market access is restricted in order to prevent too much
competition between farmers selling the same product.
This is done by allowing new members access only when
all existing members agree to it. In Foodteams, the
central organisation is responsible for the selection of
farmers, giving it a certain executive power because it
can prevent farmers from delivering to new teams if theydo not obey the rules. The main asset of Fruitnet is an
exclusivity contract with one of the biggest distribution
channels in Belgium. Consequently, integrated fruits
sold outside the Fruitnet contract form a kind of rest
market. But the organisation is aware of the fact that
with an increasing demand for integrated pip-fruit, the
value of this asset is decreasing and is therefore actually
studying how it can increase the specificity of the code of
practice. ProQA (which is operating under the non-
exclusive public BBF label) is also working with long-
term contracts with butchers to ensure its market share,
and is making some attempts to develop an own, more
specific label.
In the case of transformed products, the main asset is
the knowledge about the transformation and the
processing activity which is often in the hands of one
or a few persons. To protect themselves against the
hold-up problem, these organisations are offering these
key-persons a share in the overall profit. Giving services
to farmers, running the organisation as well as protect-
ing the property rights all incur costs to the organisation
that have to the recovered. But the higher the savings on
private transaction cost are, the more the farmers are
willing to pay for it to their organisations.
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Another kind of transaction costs are the control costs
caused by the necessity of setting up a control system to
guarantee the quality of the product and the observance
of the code of practice. Important differences exist
between the initiatives. Farmers’ Markets and Food-
teams depend on an informal control system in which
market commissioners or consumers regularly visit thefarm to check whether only self-produced products are
sold and whether the production methods are in
accordance with the statements of the farmers. The
control costs to farmers in these systems are low.4
Fruitnet farmers, on the other hand, bear significant
control costs because they have to subscribe both to an
organisation controlling the official code of practice
regulating integrated pip-fruit production as well as to
the special control on the Fruitnet code of practice
containing some extra regulations. In the year 2000, the
yearly contribution was anywhere between 400 EUR for
farms smaller than 5 ha and 1000 EUR for farms larger
than 40 ha. Farmers of ProQA and Coprosain are alsocontrolled by a control agency, but these control costs
are paid for by the co-operatives. Consequently, the
private control costs are of the same magnitude as those
of the common marketing channel. The farmers of
Fermi"eere de M!eean also have no extra control costs
because they still deliver part of their milk to the milk
factory where it is tested. Further, the employees of
Fermi"eere de M!eean control the quality of the milk during
the cheese making process, but this is informal and does
not represent an extra cost.
The last category of costs includes the contributions
farmers have to pay to the organisation in the form of yearly membership fees or one time capital participa-
tions. As already mentioned, these contributions or
participations can be classified as a transaction cost
because (1) they allow access to the information and
market of the initiatives and (2) the organisation covers
many transaction costs farmers would have to pay for
themselves under market conditions. In general, the
contributions are rather modest: approximately 30 EUR
per year at Farmers’ Markets, 125 EUR per year to
become a member of Fruitnet and 3% of the turnover at
Foodteams. The entrance fee in Fermi"eere de M!eean is
approximately 375 EUR; the older members have each
invested approximately 745 EUR. At ProQA, farmers
have a participation in the co-operative of approxi-
mately 1250 EUR. Not every farmer that delivers
products to the co-operative Coprosain has to be a
member of the co-operative, but those who are each
have contributed at least 2500 EUR and participate in
the benefits of the co-operative. Besides these direct fees
or contributions, the organisations (with the exception
of Farmers’ Markets and Foodteams who never become
owners of the products) also take a certain margin on
the sales to cover their costs. With the exception of
farmers working with Foodteams, farmers do not feel
that these fees are excessive. This may indicate that the
savings on the private transaction cost and/or the extrabenefits supercede the entrance costs. For Foodteams,
the reluctance of farmers to pay the contribution can be
explained by the low specificity of the services. After the
contacts with the local teams have been established,
farmers do not perceive to receive any further benefits of
the central organisation.
4.1.4. Uncertainty
Besides costs and benefits, the uncertainty about
prices and sales volumes also needs to be compared
between two marketing channels. Bates et al. (1996)
called the trade-off between costs and risk the most
important consideration when comparing the costs of one marketing method with another.
In most of the initiatives, the surplus price is
guaranteed in the regulations of the initiative. This
reduces price uncertainty when using the new marketing
channels compared with the sometimes volatile market
situation outside the channel. This price certainty is
accentuated by the fact that most initiatives try to reach
stable prices, based on a calculation of real production
costs. Fruitnet e.g., is encouraged to do this by a
supermarket chain (main buyer of Fruitnet fruit) who
itself strives for fair but stable consumer prices. In most
Foodteams, producers and consumers negotiate a yearlyprice that is only renegotiated if (market) conditions
change drastically. Although at Farmers’ Markets prices
do follow common market prices, wide swings are
attenuated, resulting in a smaller price variation
interval. An important benefit of better price security
is that farmers can better estimate their revenues for a
given period, making investments in e.g. environmen-
tally sound practices less risky. This can be particularly
important for innovative technologies.
With respect to quantities, ProQA, Fermi"eere de M!eean
and Coprosain give participating farmers an informal
take-off guarantee. Within Fruitnet, the original mem-
bers have a first selling right. Only in case of higher
demand by the main buyer (a large supermarket), other
integrated fruit producers are also allowed to deliver. On
Farmers’ Markets and within Foodteams no implicit
guarantee is given, but uncertainty is small because most
farmers are also selling through the common marketing
channel, meaning that the surplus of the market day can
always be sold, be it at a lower price.
4.1.5. Global analysis
Although comparative qualitative analysis does not
allow one to evaluate absolute profitability, and even
4As some of the farmers at Farmers’ Markets and Foodteams make
use of a label (Fruitnet or Biogarantie (=an organic production)
label), they incur significant control costs equal to those discussed for
the Fruitnet farmers.
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though the result will depend on the magnitude and
relative importance of the different cost items, the
overall picture can be regarded as positive. This is also
the general impression of participating farmers, who
consider the extra revenues to be sufficient to compen-
sate for the increase in direct (production and commer-
cialisation) and transaction costs.However, we agree with Festing (1997) that some
caveats are in order. First, there is a danger for farmers
to overestimate extra revenues generated and to under-
estimate the extra costs, and in particular the transac-
tion costs because these are not always expressed
(directly) in monetary terms. For example, farmers
delivering to Coprosain do not value the time devoted to
meetings in which production and sales are planned.
Second, it is not always possible to generalise these
general impressions because most farmers participating
in initiatives already had a production method or
management practice resembling the one needed to
enter the initiative. This means that their adaptationcosts to make the necessary changes were small or
negligible, a finding which may not be the case for other
farmers. If major changes were to be needed, the cost/
benefit calculation may be different. For example,
farmers switching to integrated pip-fruit production
have to weigh the balance between the costs avoided
(such as preventive treatments with chemical sprays) and
new costs (such as pest follow-up, more infected fruits).
A third remark is that initiatives like Farmers’ Markets
and Foodteams (where farmers are taking over (part of)
the marketing function of wholesalers and retailers) will
only be profitable for farmers with an excess (and thuslow opportunity cost) of labour. In case of shortage of
labour, the marketing activity comes in competition
with the production activity (in quality or in quantity).
This is corroborated by many farmers who stated that
their activity is only profitable because they can use
relatively cheap family labourFhiring people for the
commercialisation activity would be too expensive.
4.2. Comparison with indi vidual direct sale of farm
products
As already indicated, many of the farmers involved
were already engaged in selling farm products (fresh and
processed) directly to the consumer. In most cases, these
farm products are sold at the farmer’s own farm shop,
but sometimes farmers sell their products at public
markets and yet others sell them through local retailers.
The question then is whether the sale of farm products
through organised marketing channels such as Farmers’
Markets, Foodteams, Fermi"eere de M!eean and Coprosain
has any advantages in comparison with the individual sel-
ling of farm products directly to the consumers. The
result of this comparative analysis is presented in Table 2.Three groups of farmers have been distinguished in
the analysis: (1) farmers selling fresh farm products
(fruit and vegetables, flowers) or processed farm
products (yoghurt, ice-cream, cheese, bread, jam, juice,
meat products, etc.) at Farmers’ Markets or Foodteams;
(2) suppliers of processed farm products to Fermi"eere de
M!eean and Coprosain; and (3) farmers who now sell their
milk, cattle or pigs to the co-operatives but who would
otherwise have to invest in equipment to produce their
own cheese or meat products. Although the signs of the
changes in revenues or costs are quite similar for the
three groups, the explanation for each one of them isdifferent, and will be discussed in the following sections.
Other issues have already been discussed in Section 4.1,
and will therefore only be mentioned briefly.
Table 2
Comparative analysis of the new marketing channel and the individual direct sale (with the individual direct sale being the reference)a
Farmers Farmers’ markets and foodteams Fermiere de Mean and Coprosain
Product Fresh products and processed products Processed products Basic products for processing
Revenues
Price = = =
Quantity + + +Direct costs
Production =
Commercialisation +
Transaction costs
Market information
Negotiation + +
Human skills = =
Control +
Contribution + + +
Uncertainty
Price
Quantity sold
aNote: The signs indicate the direction of the changes in revenues, costs and uncertainty: +: increase; : decrease; =: similar.
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4.2.1. Revenues
Prices in the collective marketing channels in general
are similar to those in the individual farm shops.
However, the organised channel has the advantage to
realise a hi gher turnover (more clients). The first reason
for this is that the products are more readily available to
the common consumer through the initiatives. Whilemost farm shops are located in the countryside, Farm-
ers’ Markets for example organises markets in the
village or city centres, during weekends or on evenings,
increasing accessibility. The system applied by Food-
teams also requires a smaller effort on the part of the
consumer who picks up his products every week at a
place in the neighbourhood at a time agreed upon by the
team. By doing so, Foodteams has reached many
consumers that otherwise would have continued to
buy in the common marketing channel. Fermi"eere de
M!eean and Coprosain also bring products closer to the
consumer by selecting strategically located outlets or by
participating in public markets.A second advantage of the initiatives is the wide
selection of farm products that can be bought at one
place. A third reason is that for many consumers the
collective effort is felt to contribute to the viability of the
countryside, to sustainable production and to aid
regional development. This explanation is inter alias
supported by a consumer analysis by Vannoppen et al.
(2001), Fourth, organisations such as Fruitnet, Fermi "eere
de M!eean and Coprosain spend a significant amount of
resources in marketing their products via intensive
prospecting of wholesalers, retailers, caterers, etc. Even
for relatively small initiatives such as Farmer’s Marketsmore publicity can be gained by the organisation than
by the individual farmer. With the exception of only a
few successful and strategically located farm shops,
farmers can therefore usually sell more of their products
via the initiative than they would be able to sell in their
own farm shop.
4.2.2. Direct costs
For the analysis of the direct costs, it is necessary to
make a distinction between the three groups of farmers.
For farmers selling at Farmers’ Markets or Foodteams,
production costs do not change much. Since higher
quantities are sold, some farmers mention that produc-
tion costs per unit of product decrease, for example
because of the more frequent use of fixed equipment.5 In
comparison with the farm shop, commercialisation costs
increase due to costs incurred by transport, stallage, the
license for sales activities, etc.
Farmers selling their processed farm products
through Fermi"eere de M!eean and Coprosain also mention
a minor decrease in their production costs per unit of
product. This decrease is the result of the specialisation
(e.g. making only yoghurt instead of a whole variety of
dairy products) and the increase in production volume
made possible by the co-operatives. Commercialisationcosts, on the one hand, are slightly increased by the
need to transport products to the co-operative and
by extra packaging costs (the products are handled
more intensively than when they are sold at the farm).
But these increased costs are insignificant in com-
parison with the savings realised by the fact that farmers
do not have to spend time and money in marketing
activities, that are now being handled by the co-
operative.
The direct costs for farmers selling raw materials to
the co-operative are lower because there is no need to
invest in the processing activities taken over by the co-
operative. In particular, for these farmers new supplypossibilities (that is, the possibility to deliver to a quality
food channel) become available which otherwise would
only be possible with very high individual investments
(in material for the production of processed farm
products and in the commercialisation of these pro-
ducts).
4.2.3. Transaction costs
As indicated under Section 4.1.3, all organisations
collect information about regulations, market
conditions, consumer demands, and so forth, and
distribute this information among their members.Together with information exchanged among farmers
of the same initiative, this results in lower information
costs as compared with individual direct sale. Negotia-
tion costs in general are higher than when farmers can
set prices individually. These costs not only include
negotiation about prices, but also about quality,
quantities, applied practices. organisational aspects
(membership e.g.), etc. On the other hand, farmers can
realise an economy on negotiation costs not only
because a comparable system of negotiations with
consumers would be very expensive for the individual
farmer, but also because well-defined price systems and
quality standards reduce recurrent negotiations on these
items. With respect to the acquisition of human skills,
significant gains can be made by those farmers
selling their own products, because they are supported
in the development of these specific skills by the
central organisation (e.g. workshops organised by the
organisation).
In comparison with individual sales activities Farmers
selling at Farmers’ Markets or to Foodteams are
confronted with some extra costs incurred by the control
of their practices. They have to comply with regular
visits (by consumers or market commissioners) of their
5With regard to the investments in processing material and sales
facilities it has to be noted that all farmers interviewed started on a
small basis and expanded gradually. Bowler et al. (1995) also
concluded that ‘‘farm businesses first enter the alternative farm
enterprise pathway at the marginal level, subsequently passing to the
principal level’’ (p. 119).
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farm and explain their practices. In Fermi"eere de M!eean
and Coprosain, these control costs are on the account of
the organisations, so that the control costs for these
farmers will be lower than with a comparable quality
and control system on an individual basis. Indirectly,
farmers do pay their part of the price tag of the controls
by accepting a lower margin and by paying theircontributions or membership fees.
When taking all factors into account, it can be
concluded that transaction costs are equal or slightly
higher for farmers who already had implied the direct
sale of fresh or processed products. For producers
delivering raw materials for the processing activity of
Fermi"eere de M!eean and Coprosain, the new marketing
channel substantially decreases transaction costs be-
cause the co-operation, through the centralisation of
processing and marketing, realises substantial econo-
mies on information (about processing), negotiation and
control costs and in particular on the investments in
specific assets.
4.2.4. Uncertainty
An important benefit of the new marketing channels
in comparison with individual sales is that farmers are
more certain about prices and quantities sold. While an
individual farmer has to compete with other traders in
his neighbourhood, all initiatives guarantee farmers a
good price, negotiated rules (about the functioning of the
marketing channel) and the absence of price competi-
tion. The reduced uncertainty about turnover is the
result of the size of the initiatives, as already discussed inSection 4.1.4.
4.2.5. Global analysis
Our analysis reveals that in comparison with indivi-
dual direct sale, the most important benefits of
collective initiatives are a higher turnover (prices are
comparable) and a higher certainty about prices and
sales volumes. For farmers of Farmers’ Markets
and Foodteams these extra benefits offset the extra
commercialisation and transaction costs. For the farm-
ers of Fermi"eere de M!eean and Coprosain total costs
decrease because farmers do not have to invest in the
marketing of their products (done by the co-operative).
This fully compensates for the low extra transaction
costs.
For farmers delivering basic products for processing
activities, the new marketing channel means a significant
improvement, because investment, information and
control costs are taken over by the co-operative. For
farmers who donot have excess labour time to be spent
on marketing or even processing activities, initiatives
such as Fermi"eere de M!eean and Coprosain present a
unique possibility to penetrate the market of high-
quality food products.
5. Conclusion
The theoretical model presented in Section 3 of thispaper offers a good framework to analyse farmers’
participation in innovative marketing channels.
Although the model can be characterised as a traditional
cost–benefit model, the inclusion of transaction
costs and its qualitative nature give it a broader
dimension.
The framework has been used to analyse the
participation of farmers in six innovative marketing
channels for quality food in Belgium. Overall, the
balance is positive: the higher margins and in particular
the savings on private transaction costs (mainly invest-
ments in specific knowledge and assets) offset the higher
costs for the farmers.Our analysis proves that co-operation between farm-
ers can overcome the problems that inhibit farmers from
developing a direct selling activity. These problems,
mentioned by inter alias Battershill and Gilg (1998b)
and Festing (1997), include among others: inappropriate
farm location with consequently low turnover; the need
for investments; the lack of marketing talent; the
complexity of health and hygiene regulations. Co-
operation even allows farmers who are not able to
invest resources and labour into processing or
marketing activities to enter the market of quality
production.A second conclusion is that these organisations
are able to promote innovations which would
probably not take place under pure market governance.
Bundling resources and capacities has been shown to
reduce the risk of failure of individual farmers
(Sgaard, 1994; Morgan and Murdoch, 2000). Many
of the farmers in the initiatives we interviewed have
invested in more sustainable production methods only
because the initiative ensured them an outlet for their
products.
Collective marketing channels have the capacity to
organise a quality insurance system which individual
farmers cannot develop because of the very high costs
involved. Only co-operation can sufficiently cut the costs
and make the necessary investments in specific skills and
assets (Raynaud and Sauv!eee, 2000).
For the rural sector as a whole, it is important to
reflect on such new production and marketing models at
a time of growing consumer concerns regarding food
quality and public concerns regarding health and
environmental issues. Initiatives based on direct market-
ing or labelled products (like the ones studied in this
paper) can be regarded as pioneers to find such new
constructions. It would even be possible to involve the
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transformation and distribution sector as illustrated by
the integrated fruit production initiative Fruitnet.
However, as our analysis indicates, the changes in the
transaction costs can be substantial, even at the farm
level. It is imperative to include these costs in any cost–
benefit analysis of such innovative processes. A common
failure of many initiatives is that transaction costs arenot adequately budgeted: because they are not directly
tangible, these costs are not accounted for by volunteers,
in particular at the start of an initiative. When initiatives
grow, and these costs become visible, organisations have
to be prepared for these expenses; if not, and if they do
not adapt their governance structure, this can lead to
difficulties or even failure of initiatives. A good historic
example would be the many Farmers’ Markets, which
started up in the 1980s but disappeared after the
pioneers started to withdraw from participation. We
therefore believe that further research should identify
and measure transaction costs. When transaction costs
are better quantified, farmers and emerging initiativescan become more aware of their existence and can take
them into account from the start.
Appendix A. Mathematical derivations from the basic
model
A.1. Profitability of a marketing channel
Pchain ¼ Pp þPm þPs
with
Pp ¼ PpQp rpI p TCp;
Pm ¼ PmQm PpQp rmI m TCm;
Ps ¼ PsQs PmQm rsI s TCs;
Pchain ¼ PpQp rpI p TCp þ PmQm PpQp rmI m
TCm þ PsQs PmQm rsI s TCs;
Pchain ¼ PpQp PpQp þ PmQm PmQm þ PsQs rpI p
rmI m rsI s TCp TCm TCs;
Pchain ¼Pp þPm þPs ¼ PsQs rpI p rmI m rsI s
TCp TCm TCs:
A.2. Relati ve profitability of a labelled marketing channel
P1 ¼ Ps1Qs1 rp1I p1 rm1I m1 rs1I s1 TCp1
TCm1 TCs1;
P2 ¼ Ps2Qs2 rp2I p2 rm2I m2 rs2I s2 TCp2
TCm2 TCs2;
DP ¼ P1 P2
¼ Ps1Qs1 rp1I p1 rm1I m1 rs1I s1
TCp1 TCm1 TCs1 Ps2Qs2 þ rp2I p2
þ rm2I m2 þ rs2I s2 þ TCp2 þ TCm2 þ TCs2
¼ ðPs1Qs1 Ps2Qs2Þ ðrp1I p1 rp2I p2Þ
ðrm1I m1 rm2I m2Þ ðrs1I s1 rs2I s2Þ
ðTCp1 TCp2Þ ðTCm1 TCm2Þ
ðTCs1 TCs2Þ
with: rm1I m1 ¼ rm2I m2 and rs1I s1 ¼ rs2I s2
DP ¼ DPsQs DrpI p DTCp DTCm DTCs:
A.3. Relati ve profitability of a direct sale marketing
channel
P1 ¼ Ps1Qs1 rp1I p1 TCp1;
P2 ¼ Ps2Qs2 rp2I p2 rm2I m2 rs2I s2 TCp2
TCm2 TCs2 ¼ Ps2Qs2 Sr2I 2 STC2
DP ¼ P1 P2
¼ Ps1Qs1 rp1I p1 TCp1 Ps2Qs2 þ Sr2I 2 þ STC2
with: Ps1Qs1 ¼ Ps2Qs2
DP ¼ ðSr2I 2 rp1I p1Þ þ ðSTC2 TCp1Þ:
Appendix B. Description of the six case studies
Fruitnet commercialises integrated pip-fruit under theFruitnet label. About 117 farmers were members of
Fruitnet in 1997. Fruitnet co-ordinates product sales by
negotiating a price with the main buyer of the products
and by assigning and distributing the orders to the
different producers. The chain consists of all the
traditional actors (producer, auctioneer, distributor
and consumer). Fruitnet co-ordinates the transactions
and the inspections of the products.
Produits de Qualit!ee d ’Autrefois (ProQA) is a small
beef co-operative of seven farmers and a cattle
merchant. They produce and sell beef under the officially
recognised BBF (‘‘Blanc Bleu Fermier’’) label which is a
public quality label of the Walloon government. This
labelled beef if sold to about 20 local butchers who
exclusively sell ProQA beef. The chain consists of all the
traditional actors.
The marketing channel Coprosain entails a co-
operative of farmers called Agrisain. The latter sells its
products to Coprosain, a co-operative, that resells these
products to the consumers, sometimes after some
processing. Coprosain has expanded its scope from
farm products (mainly milk products and fresh vege-
tables and fruits) and farm chickens to beef and other
meats, and is currently adding the processing of pork to
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its activities. The farmers producing beef and pork
follow a code of practiceFtheir products are sold under
a label (‘‘BBF’’ for beef; ‘‘Porc Fermier’’ for pork).
While Coprosain has been founded by the producers, it
has now developed into a family firm. The marketing
chain Coprosain now consists of the producer, the co-
operative and the consumers. With the expansion anddiversification of their activities, the chain has continued
to grow because retailers and even wholesalers have
become involved.
In fermi "eere de M !eean, a co-operative, producers and
consumers co-operate to promote and commercialise
farm products. The co-operative also produces a variety
of cheeses according to traditional methods. Since both
producers and consumers are represented in the co-
operative, there is a more or less direct link between
them. However, over the last few years the co-operative
has expanded her business, and the link with the
producers has been diminishing because the products
are now no longer being sold directly and exclusively toconsumers but also to retailers and wholesalers.
Farmers’ markets are held weekly, public markets on
which farmers sell their farm products directly to the
consumer. Both the farmers and some consumers are
represented in a market council that manages the
market. Consumers are gathered in a market committee
that controls the products (authenticity of the products,
quality, prices, etc.) and negotiates with the farmers to
obtain uniform prices.
Foodteams is a consumer initiative consisting of small
teams of 10–15 families who agree to buy farm products
from local farmers. The families always engage them-selves for a full year. The two organisations that
engaged in this initiative take care of the search for
consumers and producers, the setting up of new teams
and the administration of the whole initiative. However,
once the teams have started up their activities, there is a
strong emphasis on auto-organisation in order to reduce
the need for help from the co-ordinating organisations.
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