Governance instruments in transactions between dairy farmers and dairy processing industries

Abstract

The objective of this study was to identify and analyze the existing governance instruments, challenges, and opportunities for improving these instruments in the purchase and sale of raw milk transactions between dairy farmers and dairy processing industries in Brazil. The combination of methods of bibliographic and documentary research was used to identify and describe the existing governance instruments, with interviews with professionals linked to dairy farmers and dairy processing industries. The following governance instruments were found: milk pricing system, milk bonus system, certifications, purchase and sale and integration contracts, technical and managerial assistance, support in the purchase of inputs and animals, financing and advances, promotion of events, communication system, and awards. Several identified aspects can be improved in these instruments, and the main one was transparency by the use of efficient communication between dairy farmers and dairy processing industries. Dairy processing industries should understand the problems and needs of farmers, and then propose the most appropriate governance instruments. Understanding the challenges and opportunities in the use of governance instruments can contribute to the formulation of public and private strategies and policies for the development of the milk segment.