Potentials and pitfalls of contract farming through agricultural cooperatives in Greece

Abstract

In recent years, Greece experiences a very intensive financial crisis that-as it is expected-has important effects on the primary sector. Α new form of entrepreneurship for Greece, contract farming, appeared the last years. A successful case study of contract farming in Greece is between the large enterprise “ATHENIAN BREWERY” and the producers-members of two agricultural cooperatives of Northern Greece. The main aim of this paper is to examine the process of contract farming through agricultural cooperatives. Specifically, this paper investigates the production process of malted barley through contracts of members of the cooperative of Epanomi and the cooperative of Trilofos, in the Prefecture of Thessaloniki (Northern Greece) and the private firm “ATHENIAN BREWERY”. Using a structured questionnaire that it was distributed in 132 producers-members of the agricultural cooperative of Epanomi or Trilofoss it was examined the advantages and the disadvantages of this form of cooperation for both growers-members of these two cooperatives and the private firm. Moreover, it was investigated the role of agricultural cooperatives in the process of contract farming. The results reveal that the most important benefit for the growers is to ensure availability of the products in a predetermined price. The most important benefit for “ATHENIAN BREWERY” is a better production plan which ensures a certain quantity and quality of raw materials. The role of both cooperatives is determinative as it guarantees the safety of the process for both contracting parties.