Horticulture producer’s willingness to participate in contract-based supply chain coordination: A case study from Queensland (Australia)

Abstract

Product export provides an option for horticulture producers in Queensland (Australia) to diversify their market and increase returns from production. Vertical supply chain coordination in the form of contract-based marketing agreements between producers and export agents/distributors could facilitate increased export. The aim of this study was to investigate the willingness of horticulture producers to participate in export focused contract-based marketing agreements. To achieve this aim, a survey including a discrete choice experiment was conducted. The results from a mixed logit model and a latent class model suggest that there are three clusters of producers: a) the export interested, b) the likely risk averse, and c) those well established in the domestic markets. Only producers in group a) expressed a preference for contract-based export marketing agreements. These producers appear to be younger, already have some export experience, and have a relatively high level of collaboration in their product supply chains. Producers in groups b) and c) expressed an interest in stronger coordination within the domestic retail sector, potentially in the form of contract farming. Prices of produce and potential higher production costs are determinants identified by all producer groups as important for their decision-making about changes to their supply chain.