Farmer strategies to manage market uncertainty: commodity-level analysis and critique

There is growing recognition that agri-food commodity markets are moving increasingly towards market-focused arrangements. In some sectors (e.g. dairy) we have already seen the development of new contracts (e.g. between farmer groups and processors) and various risk management-type strategies. Agricultural markets have always been characterised by uncertainty and contracts are by no means new forms of market practice. Nevertheless, proposed changes to CAP support post-2020 and national-level policy support strategies suggest that agricultural sectors are likely to become more market-orientated in the future, with much less state intervention. There is a need then to understand contracts and other tools and strategies that can enable producers in different sectors to manage market uncertainty and price volatility. Against this context, this paper draws on case study data from three commodities (dairy, arable and fruits) in different European regions to examine and compare strategies emerging to manage uncertainty and other business risks. The analysis adopts a farmer perspective and shows how forms of contractualisation, collective action, the use of market data, futures and other risk management schemes are perceived and in some cases actions at the food chain level. The paper problematises what is meant by ‘strategy’, especially at a farm level, given the multi-level nature of institutional arrangements, which includes complex arrangements between banks and supply chain actors. Understanding strategies as dynamic socio-material properties is therefore essential.

Publication year:2018

Accessibility:Open