THE ALTERNATIVE MODELS OF ADDED VALUE CHAINS MANAGEMENT OF MICRO AND SMALL AGRICULTURAL PRODUCERS
Abstract
The article examines the value-added chains management models in the segment of micro and small agro-food business in the context of full-scale military invasions in Ukraine. The article proposes an alternative management model that allows small agro producers differentiate the distribution channels and maximize the operational profit thereby hedging market risks. According to the traditional supply management approach to distribution, a significant part of the margin remains with large retail chains, instead, agricultural producers, especially micro and small farms, are the weakest link with minimal market power, where, accordingly, the smallest share of the chain's margin remains. Structural changes in value added chains caused by full-scale military actions in Ukraine served as an incentive for the development of formal and informal forms of cooperation between micro and small agro-food producers in order to face market challenges, joint participation in the creation of added value and its fair distribution among all links of the agro-food chain. A sociological study conducted in 2022-2023 among managers of domestic micro and small agro-food producers shows that such market factors as extensive business connections and regional associations participation, access to current market information and modern IT technologies allows farmers quickly respond to market challenges and create new forms of economic strategy that allow you to hedge risks and obtain more sustainable competitive advantages. Participation of micro and small agricultural producers in modern associations and unions, distribution channels diversification due to online resources is an alternative development strategy in the long term compared to the traditional approach to economic activity in this market segment. Participation in globalized value chains provides micro and small agricultural producers ability to adapt to the market challenges in the context of full-scale military invasions, gain access to better supply conditions and hi-quality raw materials and services, provides economies of scale and minimize risks associated with exchange rate fluctuations.
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