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FOOD SAFETY OF THE SHORT SUPPLY CHAIN - Favv

FOOD SAFETY OF THE SHORT SUPPLY CHAIN - Favv

different marketing

different marketing channels. LeRoux et al. (2010), using a case‐study approach in the U.S., provided a ranking of alternative marketing channels. Community supported agriculture ranked first followed by selling to local restaurants and groceries; farmers’ markets ranked last. This does imply that farmers should choose the best marketing channel for their business; rather – and especially given the perishable nature of most crops and the uncertainty of farm sales – farmers should adopt a feasible mixture of alternative marketing channels. Diversification in marketing channels – one of which may include the conventional channel – may offer the largest return, taking into account associated risk. SCALE OF SALES Marketing costs (all costs associated with a particular marketing channel) can be substantial and a lot of these cost items included in marketing costs (e.g. labor, sanitary and hygiene requirements, promotion, building maintenance, market stand, entry fees to markets) have a fixed character (they do not vary with varying sales), so maintaining a minimum scale of sales is crucial for the profitability of direct marketing. MANAGERIAL ABILITY As in all sectors, economic performance of alternative marketing varies a lot with managerial ability. Decisions have to be made based on reliable budgets, risks have to be managed and farmers should have an idea on minimum sales. Further, to market farm products directly to consumers, farmers need a whole array of new skills previously not needed, such as selling, marketing and social skills (Jervell, 2003). FARM CHARACTERISTICS Farm characteristics have their impact on the profitability of direct marketing through an indirect impact on the size of marketing costs. The location of an individual farm, for instance, greatly determines costs, such as transportation, promotion, associated with direct marketing. PASSION, ATTITUDE AND EFFORT When comparing the economic performance of farms, and trying to explain these difference using whole series of farm and farmer characteristics, there is always some share of the difference left unexplained. Scholars agree that some of that share is attributable to a mere difference in passion, attitude and effort. We believe that is definitely the case for the farm‐level economic impact of alternative marketing. Labor requirement are significant such that the impact of reduced effort can be substantial. 72

CONCLUSION Direct marketing has the potential to increase farmers’ profitability and allow smaller farmers to maintain their farm business. However, success is not guaranteed and direct marketing may impose high additional costs to the farm business. The question whether direct marketing is profitable is an empirical one and has to be solved by each individual farmer separately. The limited available evidence suggests profitability is dependent on the choice of marketing channel, farm characteristics, scale of sales, managerial ability and passion. REFERENCES Biermacher, J.T, Upson, S., Miller, D.C., Pittman, D. 2007. Economic Challenges of Small‐ Scale Vegetable Production and Retailing in Rural Communities: An Example from Rural Oklahoma. Journal of Food Distribution Research 38, 1‐13. Brown, A. 2002. Farmers' market research 1940‐2000: An inventory and review., American Journal of Alternative Agriculture 17 (4), 167‐176. Brown, C., Miller, S. 2008. The impacts of local markets: a review of research on farmers markets and community supported agriculture (CSA). American Journal of Agricultural Economics 90 (5), 1298‐1302. Burt, R. S. 1992. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press. De Regt E., Deuninck J. & D’hooghe J. 2010. Economische rendabiliteit van hoeveproductie: een verkenning, Beleidsdomein Landbouw en Visserij, afdeling Monitoring en Studie, Brussel. Jervell, A.M. 2003. Adding value through direct marketing – management dimensions of different marketing channels. Farm management. Proceedings of NJF seminar No. 345, October 2‐4, 2002. Hardesty, S. 2007. Producer returns in alternative marketing channels. Small Farms Program, Department of Agriculture and Resource Economics. University of California – Davis. Hardesty, S.D. 2008. The Growing Role of Local Food Markets. American Journal of Agricultural Economics 90, 1289‐1295. Hardesty, S., Leff, P. s.a. Determining marketing costs and returns in alternative marketing channels. Kambara, K.M., and C.L. Shelley. 2002. The California Agricultural Direct Marketing Study, California Institute of Rural Studies, Davis, CA. 73

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