Posts tagged: Contractual Arrangements

(Español) Planifación de la producción contra el sobre-estockamiento

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By , October 11, 2012 12:22 pm

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Preili Organic Farmers Network

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By , March 29, 2012 7:42 pm

The Context
Preili organic farmers’ network unites organic farmers from Preili district, Eastern part of Latvia. It has been initiated in mid 1990s, when soon after the establishment of the first organic farms in the area, Preili organic farmers NGO was founded. The network functioned as the main driver of organic production development and promotion in the district by disseminating knowledge and stimulating local producers to adopt environmentally friendly methods. The cooperative organises collective sales, negotiate remunerative prices and provide services such as accounting and logistic services to the members.

The cooperative faces difficulties and constraints to manage the organization and to convince the members to market their produce within cooperative instead of relying on their individual marketing channels.

The Mechanism
The cooperative provides a contract to producers to market their produce, thereby structuring sales for the niche organic market channel. This allows farmers to receive price premium.

The Outcome
There are comparatively few farmers engaged in the cooperative as of yet, but it has served its’ purpose in to creating a special market niche, which can be expanded in future.

Although farmers witness that they have not gained financially a lot from selling products through the cooperative, some market costs have been reduced – transportation, publicity, supplies of organic fertilizers. As there are no established common codes of practice within the cooperative, both farmers and the cooperative leaders are afraid to take risk. The lack of definition of mutual responsibilities makes the relation between the farmers and the cooperative less secure. So, farmers continue with individual market strategies and often are supplying to conventional processors where certain regularity and stability of purchase and price are guaranteed.