Exploring the Quality of Commercial Relations Between Producers and Buyers in the Fruit and Vegetable Supply Chain

Abstract

The different bargaining power of actors is a long-standing problem in the fruit and vegetable supply chain, where buyers (e.g., retailers, industry, and wholesalers) have more power than agricultural producers and are, therefore, able to engage in commercial practices that may be perceived as unfavorable or even unfair by the weaker part. This study explores how producers perceive the quality of commercial relations. The methods include a focus group discussion with sales managers of producer organizations and a survey of agricultural producers in Italy. We measure their willingness to change buyer and their stated overall satisfaction with the commercial relation by analyzing ninety-eight commercial relations and five dimensions of quality in the relationship. We identify four clusters of relationships characterized by different quality levels. The satisfaction and willingness to change buyers significantly differ across the clusters; economically favorable commercial relations are associated with a low willingness to change buyers, even when the producer is not satisfied with the overall quality of the relationship. The highest levels of satisfaction and the lower willingness to change buyers are reached for commercial relations that are not only economically favorable but also include positive relational aspects such as trust and mutual commitment.