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Pricing in the risky value chains: innovative approaches for fair pricing in organic dairy farming
Project
Project code: 2808OE127
Contract period: 01.12.2009
- 31.03.2012
Budget: 187,390 Euro
Purpose of research: Applied research
Based on cost and price data the pricing processes are analysed. Data sources are: retail selling panel data from bioVista, if possible wholesale buying and selling prices, bookkeeping data of organic farms from Landdata and organic and conventional ZMP milk prices. The aim is to find approaches for fair pricing of organic milk and handling of risks. To obtain this the project starts with a full production cost calculation on the farm level. Of further interest is the distribution of the farm production costs. In consideration of the full costs fair organic milk prices are discussed. To obtain results of the pricing process vertical and horizontal price transmissions are reviewed in an econometric approach. For this vector error correction model are estimated with a focus on asymmetric price transmissions and market power. The research will be done on the relationship between conventional and organic milk prices and also on the price relationship in the value chain starting from the farm level over dairy to the retail. As far as possible the production, transaction and marketing costs will be collected and analysed. In the next step a risk analysis will be done. How are the risks of extern and intern shocks shared in the value chain? Based on this question innovative instruments for supply contracts along the value chain are developed. Especially borders of competition lows for pricing are taken into account. The aim is to offer to the organic milk sector an approach to establish a fair market and pricing system to support a sustainable market development. A combination of fair trade and organic trade is even in Germany a potential interesting combination. Results of this project can be transformed to other areas of the organic sector, too. In collaboration with the BNN six workshops will be conducted in order to put the research results into practice.
Section overview
Subjects
- Market Analysis/Marketing Strategy
- Business administration
Framework programme
Federal Organic Farming Scheme and other forms of sustainable agriculture (BÖLN)
