Hidden Costs Associated with Smallholder Family-Based Broiler Production: Accounting for the Intangibles

Abstract

The contractual relationship between the processing firm and the broiler smallholder presents incessant conflicts of interest and inequality due to technical and economic discrepancies, leading to an undervaluation of the producers’ remuneration. This study aims to deepen the discussion on searching for a more balanced monetary exchange between processing firms and broiler smallholders based on scientific aspects. For this, the emergy theory and its concepts are used while considering a representative broiler production system at Concórdia, Brazil. The results indicate the importance of including cultural information in the emergy-based model calculation, which achieved the highest emergy contribution (~63%; transformity = 1.73 × 108 sej/J) for the broiler smallholder. On the other hand, the cultural information was not sufficient to increase the sustainability of the broiler production system. The results show an imbalance in the monetary exchange between the processing firm and broiler smallholder from both perspectives (the economic and emergy-based ones), which indicates higher values (USD 0.32/broiler and EmUSD 1.62/broiler) than the practiced payment value of USD 0.24/broiler. Evaluating the “(eco)cost” from an emergy-based accounting perspective recognizes that production depends not only on tangible physical resources but also on knowledge, skills and information (“iceberg of value” thinking). Policy and decision makers must therefore consider the promotion of public policies that subside initiatives, including social and environmental welfare programs.