Overview of Co-Operations on the Sugar Product Path – The Operation of Producer Groups

Csima, Ferenc – Borbély, Ákos

Keywords: sugar verticum, sugar beet, integration, prefinancing, producer group, Q13, Q14, L14

This paper presents the coordination and integration relationships of the sugar product path, with special regard to the operation of producer groups and the eco-nomic evaluation of their operation. Our research showed that sugar beet producer groups meet the basic requirements for this kind of integration defined in the litera-ture: (a) consist of self-employed farmers, members’ responsibilities are limited; (b) they transfer their net income to their members through various services; (c) most of the sugar beet producer groups not only have upstream vertical links (sugar factories) but are intentionally linked downstream to input material suppliers through joint purchases; (d) the transaction costs associated with the production and sales process can be reduced by coordinating the activities of the sugar beet growers (e.g. harvesting); (e) large quantities of products are produced with a high level of expertise; and (f) the produced sugar beet is more homogeneous due to unified technology.
A comparative analysis of the data of sugar beet producer groups in the period 2008- 2017 supported two from the three hypotheses set out in the objectives. One hypothesis was not significantly accepted: H1: the sugar beet producer groups are continuously significant (at a rate of at least 15% in total quantity) able to provide raw materials to the sugar factory (accepted); H2: the quality of sugar beet produced by producer groups (sugar content and thick juice purity) is higher than that of pro-ducers outside the producer groups (not accepted); H3: special subvention of sugar beet producer groups increases the generated revenue by the producer group members, so producer groups are less sensitive to changes in the economic condi-tions of beet production than producers outside the producer groups (accepted).

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