Impact of buyers’ support on farmer performance and investments in the Brazilian pork supply chain

Abstract

This paper analyses how the technical and managerial support of buyers affects the performance and investment capacity of Brazilian pig farmers. The paper also analyses the influence of the farmers’ investment capacity on their own performance and how that performance in turn influences the investment requirements demanded by buyers. We developed a structural equation model applied to a sample of 199 farmers including piglet farmers (n=91) and finishers (n=108) working under production contracts. The model includes two constructs that assess performance – financial performance and production and quality performance. The results show that buyer support positively influences both performance constructs and investment requirements for piglet farmers and finishers. The relationship between buyer support and investment capacity was significant only in the sample of finishers. Farmers’ investment capacity positively influences both performance constructs in the sample of piglet farmers. For finishers, investment capacity influences only financial performance. Moreover, only production and quality performance of finishers influences investment requirements. The results provide buyers and farmers with insights for refinements in support policies and management.