nep-mkt New Economics Papers
on Marketing
Issue of 2014‒09‒25
two papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Alternative Food Networks in Piedmont: determinants of on-farm and off-farm direct sales by farmers By Corsi, Alessandro; Novelli, Silvia; Pettenati, Giacomo
  2. On the benefits of contractual inefficiency in quality-differentiated markets By Bacchiega, E.; Bonroy, O.

  1. By: Corsi, Alessandro; Novelli, Silvia; Pettenati, Giacomo
    Abstract: Direct sales are a widespread and important typology of the so-called Alternative Food Networks. The direct links between producers and consumers can take two basic forms: consumers going to buy agricultural products at the farm (on-farm sales), and farmers selling their products in urban areas. These practices are an alternative to traditional organizations of the agro-food chains, that typically involve several operators between producers and consumers. It is therefore important to analyse the reasons pushing farmers to adopt this new organization of their marketing chain. This research aims at analysing the territorial distribution of direct links between urban consumers and farmers in Piedmont (Italy), and to assess the main determinants of their choice. Firstly, the territorial distribution of direct sales practices (on-farm or elsewhere) is analysed. This is made possible by the access to micro-data from the 2010 Agricultural Census for Piedmont, a region whose agriculture is characterized by a strong emphasis on quality products. The farms that chose direct sales, both on- and off-farm, are mostly concentrated in specific clusters, such as the hilly wine-growing areas of Langhe and Monferrato, the hilly belt surrounding Torino, and some low Alpine valleys. Secondly, we analyse the determinants of the choice to sell directly to consumers, separately for on-farm and off-farm sales, with probit models. Explanatory variables comprise the structural characteristics of the farms (farm size, type of farming, etc.), the personal characteristics of the operators and of the farm households, and the proximity to urban and commercial areas. Operators’ and farm characteristics are found to affect the choice of selling directly, but rather weakly. The most important factors affecting these choices are farm location and, for on-farm direct sales, the complementarity with agro-tourism and recreational activities.
    Keywords: direct sales, alternative food networks, Agribusiness, Marketing, Q13, Q12, R12,
    Date: 2014
  2. By: Bacchiega, E.; Bonroy, O.
    Abstract: Contractual inefficiencies within supply chains increase an input price above its marginal cost, therefore they are considered detrimental to consumer surplus. We argue that such inefficiencies may be beneficial to consumers in quality-differentiated markets. Indeed, enhancing contractual efficiency in high-quality supply chains may adversely affect the market structure by driving low-quality vertical chains out of the market and, consequently, reduce consumer surplus. Due to the finiteness property (counter-)integration in the low-quality channel does not allow this channel to be in business. Our result holds irrespective of whether the contractual inefficiencies originate from the double marginalization or the "commitment effect".
    JEL: L13 L22 L4
    Date: 2014

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