The Benefits of Horizontal Integration in Polish Agriculture Exampled by Agricultural Producer Groups

Abstract

The purpose of the study is to identify the benefits of belonging to producer groups in relation to the prices received for their products by cooperating farmers and, consequently, also to assess the appropriateness of agricultural policy which supports improvement of horizontal integration in agriculture. A comparison of prices of individual agricultural products obtained by members of producer groups with average procurement prices from the Central Statistical Office (Statistical Yearbooks of Agriculture), has been made. It also indicated differences in revenue between the various entities resulting from the comparison. The analysis shows that in all examined industries (oilseeds, potatoes, cereal grains, milk), the prices received by the cooperating farmers were higher than the average procurement prices. In addition, assuming identical sales volumes as in producer groups, they had significant revenue advantages over the rest of the market. This demonstrates the relatively higher market power of affiliated holdings, and from this point of view also public support directed at improving horizontal integration is justified.