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

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).