Agricultural Producer
Groups in Poland
Ilona Banaszak
IDARI project
Humboldt University Berlin
2004-06-10
Structure of the presentation:
1. Background;
2. Research questions;
3. Theoretical foundations;
4. Methodology.
2004-06-10
Background (1):

The term ‘producer group’ - any particular legal form, an
organisation whose main aim is to introduce agricultural
output produced by individual farmers to the market;

PGs can be only established by producers;

Such groups can function as:
An informal, oral agreement between farmers;
Formal, legal agreement. Such PGs have to be officially
registered in court, as a co-operative, association, union or a
commercial company;
i.
ii.

2004-06-10
Groups which fulfil certain conditions can obtain additional
support from the province’s government or from the EU.
Background (2):
Main benefits which potentially can be reaped by
members of producer groups:

better market position and higher prices of output;

lower prices of means of production;

easier and cheaper access to information about the market;

lower investments costs and better opportunities for capital obtaining;

saving of time spent for supplies and sales;

higher efficiency and better use of knowledge and skills of
associated farmers;

lower business-related risk;

avoiding of unnecessary competitiveness.
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Background (3):
Costs of cooperation:

Loosing independence;

Higher uncertainty (enterprise and partners’
behaviour);

Necessity of investments.
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Background (4):
Producers groups in numbers:

Currently about 700 PGs in Poland;

Wilekopolska province:
7 groups of informal character – not registered in court;
53 groups registered in court (26 as associations, 16 as unions, 9 as
limited liability companies, 1 as a joint stock company and 1 as a
registered partnership);
5 groups registered in the province’s government office (2 as
unions, 3 as limited liability companies).
-
-

Most PGs: pork (54%), vegetables (9.8%), pork and cattle (6.5%)
and fruits (4.9%). Average number of members - 66;
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Background (5):
Problems with PGs in Poland:

PGs in Poland still have marginal share - considering both
the number of associated farmers and share in production.
There are less and less PGs (in 2003 about 25 less than in
2001 in Wielkopolska). Only a few of them have applied for
government subsidies (2 for 60);

Law regulations – often not compatible with polish
circumstances;

History of cooperatives in Poland: introduced by force by
the communistic state;
cooperation, common action badly associated by farmers.
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Research question: What are determinants
of failure and success of producer
groups in Poland?:
1.
How does the process of formation of producer
groups occur, what are the motives and
determinants of framers’ cooperation?
2.
How producer groups function, how the
decisions are made, how do they act on the
market?
3. To which extend informal and formal institutional
environment influences or determines formation,
functioning and achieving success by producer
groups?
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Hypotheses (1):
Individual choice level:

H1. Formation of a producer group is determined by possibility and intensity
of preplay contacts between actors. The more contacts the highest possibility
of creation of a producer group;

H2. Formation of a producer group is determined by size and modification of a
certain set of players. The less modification of the certain set of players the
highest possibility of formation of a producer group;

H3. Formation of a producer group is determined by history of previous
games. The more successful and satisfactory joint ventures in the past the
highest possibility of formation of a producer group;

H4: Existence of a certain level of social capital is correlated with density of
producer groups in one area;

H5. Decreasing of transaction costs is a motive for setting up a PG;

H6. Informal institutional environment influences evaluation of costs and
benefits of cooperation;
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Hypotheses (2):
Functioning as a group:

H7: Formal institutional environment influences legal form of
cooperation;

H8: Informal institutional environment influences choosing a certain
type of decision making process;

H9: Legal form of a group is correlated with successes;

H10 Type of output is correlated with success;

H11: Homogeneity of members is correlated with success;

H12. Personal attitudes of the group leader are correlated with
successful functioning;
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Hypotheses (3):
Functioning as a group (2):

H13: Certain marketing strategies determine success;

H12: Involvement in the decision making process is correlated
with positive evaluation of the cooperation;

H14: Working out certain tacit rules of cooperation and its
sanctioning within the group determines success;

H15: Ability of learning is correlated with success;

H16: Innovating is correlated with success.

H+: Possession of the group is correlated with success;
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Theoretical frameworks:

Choice theories (game theory, rational choice theory, exchange
theory);

Interaction theories (exchange theory);

Informal and formal institutional constraints as evolving
from regularities in interactions and structuring interactions
(NIE: North, Williamson, Economics of Conventions);

Cooperation (Game theory, social capital);

Contracts, horizontal integration.
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Theoretical model:
Embeddedness, informal
institutions (customs,
traditions, norms)
Institutional environment,
formal rules of the game
External world
Learning
Expected benefits
Success
Producer group
Establishing of a PG
Individual choices:
internal norms,
discount rate
Choice of
strategies
Formulation,
adjudication,
modification:
constitutional
choice
Performance
Policy-making,
management:
collective
choice
Monitoring,
enforcement:
operational
choice
Failure
Expected costs
Learning
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Methods of the research:
Regions
Producer groups
Population Sample
Targeted
Sampling
Selection
17
± 700 PGs
Technique
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Population
Wielkopolska
Full
60+9
Sample
Targeted
Farmers
Population
Full
60+9
3+1
Unknown (± 40 per PG)
structured
interviews
with
group
leaders
semistructured
interviews
with group
leaders,
observation
structured interviews
with members and nonmembers from the
municipality producing
similar type of output
60(3934)+9(361)
PGs
semi-structured interviews
with civil servants dealing
with PGs on the country
and voivodship level
Thank you!
2004-06-10
Choice tree:
No
Other forms of
cooperation
As an informal
PG
Association
Cooperation
Union
Cooperative
As a PG
Non-profit
Limited liability company
As a PG of formal
character
Joint stock company
Registered partnership
Commercial companies
Profit
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