Producer organisations in the meat sector

For the French market Dr Duvaleix-Tréguer noted striking differences between the number ofrecognised POs in the F&V sector (254) and in the pig sector (37). However, whereas the recognisedPOs in the F&V sector cover only 50% of production, in the pig sector 89% of the productionare covered. Dr Duvaleix-Tréguer also described how each sector organises itself differently.Whereas in the French dairy sector 50% of production is done by cooperatives, the other 50% aredone by POs, which negotiate framework agreements with industry. In the pork sector, there is ahigh prevalence of economic POs, but not all of them are organised in the form of a cooperative.She presented a case study on the marginal costs in hog production that distinguished between‘independent’ POs that concentrate supply (horizontal cooperation), ‘marketing’ POs that havelinks with downstream operations (slaughterhouse), and ‘supply & marketing’ POs that have alsolinks with upstream operations (feed). Members of supply & marketing POs have the lowestmarginal costs (i.e. the costs of increasing or decreasing production by one head), possibly becausethey are mostly joined by large and efficient farms or because they can realise economiesof scale for their members. Compared to the marginal costs, the output price that members ofsupply & marketing POs receive is relatively high. More generally, membership in POs can increasethe efficiency of producers and, in particular, quality schemes that are operated by POs canincrease the overall value-added in the food supply chain