Examining the Exploitation of the Benefits of Vertical Integration among Broiler Chicken Producers

Csizmásné Tóth, Judit – Poór, Judit

Keywords: poultry sector, agricultural risks, vertical integration, type of vertical integration, Q13

The current critical situation and problems of the poultry sector justify addressing the role and importance of vertical integration since the promotion and support of integrations can be one of the keys to recovery. The importance of support and encouragement of integration is underlined by the measures and actions of the current agricultural strategy and the 2014-2020 Common Agricultural Policy. Our primary research examines the relationship between the type of integration (proprietary or contractual) and the exploitation of the benefits of vertical integration. The empirical research is based on quantitative research conducted among broiler fattening producers with flocks of at least 30,000 birds per cycle who are members of the Hungarian Poultry Product Board and participate in vertical integration. Based on the results of the research, enterprises in proprietary integration can take more and better advantage of the benefits of vertical integration, and their risks have rather decreased since entering integration, compared with businesses in contractual integration. Agricultural policy and sectoral strategy must therefore prioritise the elaboration and implementation of measures to support and promote forms of vertical integration organised on the basis of ownership. This step is absolutely essential in improving the situation of the poultry sector and in helping restore its international competitiveness.