Possible responses by small-commodity production to the concentrated food-trade

Juhász, Anikó – Seres, Antal – Stauder, Márta

Keywords: concentration, food trade, small-commodity production, producer organisation, adaptability

Concentration is a general tendency, leading to the strengthening of the food-trade’s position more or less everywhere in the developed world. One of the consequences of this is a strengthening of the conflicts between large-scale trade and small-commodity production, arising from the difference in size and related to quantity, choice, quality and price, as well as financial muscle, organisation of the product path, the logistics-informatics system, and innovation.
The possibility of reducing these conflicts is fundamentally determined by the adaptability of small businesses to the changing environment. The most obvious answer on the part of the small producers to the problem of the expanding buyer side is to increase the size of the seller side. However, with one or two exceptions, producer organisations in the agricultural sphere are organising very slowly in Hungary and not always to good effect. Participation in a producer organisation can offer economic advantages, particularly if the buyer-determined sales chain has high transaction costs. It is a growing characteristic of the developing world that competition for market share is increasingly taking place between producer organisations. There will continue to be small-commodity producers in the future who are unable and unwilling to adapt to the specifications and contracts of large-scale retail chains. A presence on small, regional markets needs to be strengthened and supported with marketing tools. An opportunity is afforded by niche markets to the products of small producers.