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 expectedhasimportant effects on the primary sector. ? new form of entrepreneurship for Greece,contract farming, appeared the last years. A successful case study of contract farming inGreece is between the large enterprise “ATHENIAN BREWERY” and the producersmembersof two agricultural cooperatives of Northern Greece. The main aim of this paperis to examine the process of contract farming through agricultural cooperatives.Specifically, this paper investigates the production process of malted barley throughcontracts of members of the cooperative of Epanomi and the cooperative of Trilofos, in thePrefecture of Thessaloniki (Northern Greece) and the private firm “ATHENIAN BREWERY”.Using a structured questionnaire that it was distributed in 132 producers- members of theagricultural cooperative of Epanomi or Trilofoss it was examined the advantages and thedisadvantages of this form of cooperation for both growers-members of these twocooperatives and the private firm. Moreover, it was investigated the role of agriculturalcooperatives in the process of contract farming. The results reveal that the most importantbenefit 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 whichensures a certain quantity and quality of raw materials. The role of both cooperatives isdeterminative as it guarantees the safety of the process for both contracting parties.

Farmers’ Perception on Contract Farming in the Post-COVID Era: Empirical Study in Greece

“…This is a rather expected finding provided that in Greece agriculture remains an economic activity where tradition plays a significant part and practices flow from generation to generation [14], in combination with structural problems of the sector such as the lack of a skilled workforce [4]. As also indicated by previous research in Greece, CF has been informally in place for years, but it still remains limited in terms of both variety of crops and cultivated area [14]. Eaton and Shepherd argue that CF opens up new markets [1].…”

“…There is a variety of possible types of CF contracts Sustainability 2023, 15, 14696 2 of 14 depending on the product, which may include formal and informal contracts [13] and procurement, partial, or total contracts [5,8]. Five schemes, i.e., the centralized, the nucleus estate, the multipartite, the informal developer, and the intermediary(tripartite), are the most commonly used models [14], but they are not mutually exclusive [5].…”

“…CF is not unknown in Greece, although only recently it has taken a more organized form [14], though still focusing on traditional corps and processed products (e.g., tomato sauce). However, the number of farmers in CF schemes is relatively low; Greek farmers have been described as reserved, while banks are not particularly engaged in such practices.…”