Horizontal collaborations and the competitiveness of dairy farmers in Brazil

Abstract

The efficiency of an agricultural system depends not only on how its agents work and solve problems individually but also on how they interact with each other and with their environment. In Brazil, dairy farmers have found it difficult to remain and grow in business. To overcome market and institutional challenges, agents of the dairy production chain have developed different forms of organization and coordination. This study aimed to determine whether dairy farmers who participate in horizontal organizations have greater competitiveness than those who do not. Primary data were collected from 347 dairy farms located in two important milk-producing states in Brazil, namely Paraná and São Paulo. Competitiveness indicators were developed using factor analysis. Fourteen variables were combined into four competitiveness indicators: productive capacity (PC), institutional knowledge (IK), perception of market transactions and incentives (PMTI), and quality of milk transportation. Dairy farmers who participated in horizontal organizations had higher PC, IK, and PMTI scores than non-participants. Efficient horizontal organizations can increase the competitiveness of dairy farms.