What Determines the Economic Links among Organic Farmers? Empirical Evidence from Argentina

Farming and consumers` decisions are affected by markets globalizations, products differentiation, agricultural industrialization at the retail level and new organizational forms. The linkages among farmers emerge as a viable strategy to compete in this new context. Producers must develop skills to maintain market positioning and access to high value added niches. In Argentina, organic production has been an alternative for farmers to increase revenues, since the nineties, due to the major demand of developed countries and the price premiums. The objective of the paper is to investigate the extent to which Argentinian organic producers operate in an associated way and which the determinants of these linkages are. A count model regression is used to estimate the links among producers. The extent to which producers choose to operate in an associated way is mainly determined by the number of marketing channels used by the farmers, processing activities carried out, public support received, the scale of the farm and the kind of goods produced. This study may contribute to understand farmers` decisions about association. The issue is particularly relevant to policy makers in developing countries where associations are promoted due to the emerging role of the social capital in the rural development policies design