A contractual framework for evaluating agricultural and horticultural marketing channels

Abstract

In recent years, new directions have begun to emerge in agricultural export marketing. Emphasis has been placed on managed marketing to target market segments, rather than on bulk commodity trading. This has resulted in an increasing focus on product and market development and concern exists as to whether the marketing structures which now exist most appropriately meet perceived industry needs in these areas. In addition, there is a greater awareness by Government that the granting of statutory rights to a sector of an industry involves a redistribution of property rights, which has both efficiency and equity implications. In New Zealand, a variety of marketing arrangements have emerged to cope with the export marketing of New Zealand's primary products. At one end of the spectrum is a controlled marketing structure typified by the dairying industry which has essentially existed in this form for over fifty years. At a lesser level of regulation are the statutory boards which trade alongside existing marketing channels when they feel it is necessary. These include the wool industry and the meat industry prior to 1983. Other statutory options which partially regulate marketing activity are also in operation. An example would be a restriction on the number of private exporters who are licensed by an industry authority, as with kiwifruit. In addition to this wide variation in statutory marketing alternatives, there exist a number of unregulated structures. For example, in the barley industry, a voluntary producer cooperative operates alongside private exporting merchants. On the other hand, in newly-emerging export industries such as cut flowers, there is no collective organisation of marketing activity by producers as a group, and a variety of export arrangements appear to exist between individual producers and their agents. Two broad issues emerge with respect to the range of marketing alternatives which are in operation. The first has a positive orientation, and addresses the questions of why alternative marketing structures evolve in different industries, and why different structures may emerge in the same industry at different periods in time. The second issue is of a more normative nature, and concerns the evaluation of these alternative marketing structures with respect to their performance. To some extent, the two issues are interrelated, since it may prove necessary to understand why structures have evolved in a certain way in order to evaluate factors influencing their performance.