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Abstract

The structural changes that occurred in the milk market in Rio Grande do Sul, Brazil, during the decade of 2000 generated distinct market structures of factors for production chains in the different regions of the state. In some regions, there is high rivalry between companies for dairy acquisition, while in others, monopsony situations coexist, with no competition. Acknowledging that the informal institutional environment conditions transitional relations between agents in different agribusiness chains, we highlight the power these actor can exert under different market situations, factor which interferes on transition costs. The objective of the present study was to identify, describe and analyze the different raw material market structures of the dairy productive chain from RS and its influence over agent conduct and production chain governance. The objective of the study centered on demonstrating how power relations are established and their influence over these different contexts. In order to conduct this research, we identified and studied four revealing and representative cases from RS: two monopsony cases and two competition oligopsony cases. The methodology of the present qualitative research was comprised of documental research, interviews with farmers, processing company representatives, as well as with key informants. The results showed that the governance structure is dependent on the relative power of the agents. Market structure implies over active specificity, which influences agent interdependence, interfering on the relative power of the same, affecting governance structure.

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