The dynamics of vertical co-ordination in the Central and East Europe agri-food sector
2005
Swinnen, J. F.M.(Katholieke Univ., Leuven (Belgium))
The author evaluates the changes, which had taken place at the processing stage of the food chain in Central and East European countries during the transition period to market economy. In the first phase, after implementation of economic reforms, existing organization arrangements and institutions which secured vertical integration demised; in the second phase new vertical contractual mechanisms emerged. In the paper, numerous specific examples of vertical co-operation between primary producers, suppliers of agricultural input and processors are presented. In countries with fragmented farm structure also small producers could be involved into integration mechanisms. As the author concludes, there are three options for future shaping of vertical integration. One of them is weakening of integration itself ones the government will be strong enough to enforce fulfilling of private contracts.
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