It is possible to favour development of agribusiness linkages by starting from the nodal linkage that usually corresponds to a producer-associative organization relationship. This linkage should be the object of explicit programmes of agribusiness development.
Supplying new markets entails greater requirements in terms of delivery, packaging and quality. It requires the application of more knowledge, information and technology, and leads on to more complex processes. These requirements could be met through an association of artisanal processes or be based on manual labour combined with industrial processes. Industrial processes could cause more rapid change in artisanal processes and enable small producers to generate more value. Improvements in artisanal processes and the development of cultural markets contribute to creating more value. In turn, it is feasible to promote links with raw material processed for industrial use. These associations of products and processes require symbiotic organizations, that is to say, the merging of small producers with entrepreneurs in a framework of participation and equality.
The development of agribusiness linkages can be favoured through the promotion of administrative and entrepreneurial skills. Such promotion helps both the producer and the association organization. On the production side, it entails coordination for planning production, its quality and, in accordance with the market requirements, price, quality and opportunity. The planning requires the joint use of information tools shared by the organization and producer. It also entails commercial development at the associative level. This commercial development involves searching for, negotiating in and diversifying markets. In addition to final-product markets, these negotiating skills are needed in the markets for inputs and productive factors. Another aspect concerns the design and use of tools to handle mainly commercial risk. These tools could consider diversification of the primary production, processed or traded products by the associative organization, and the markets. The use of stabilization instruments could also be considered, such as price-stabilization funds, compensation or savings funds, and investment. Another element concerns diversification and management in the agribusiness linkages themselves according to a policy of priorities and according to clear criteria of costs and benefits.
There is a need for greater interaction between entrepreneurial agents, government, associative organizations and raw-material producers. This does not presume that some of these actors are weak, but rather that there is a need for concerted mutual action. This capacity is a reciprocal result of normative progress and loyalty of the producers to the joint interests of the group, on a par with organizational designs that incorporate incentives and sanctions to promote these performances. From the perspective of the organization, the organization needs the application of forward-looking managerial abilities for planning and establishing mechanisms to cover risks. It is sometimes the case that honourable, charismatic and philanthropic leaders can provide the organization with effective business management. However, there is a risk that this guidance might be ephemeral, coming to a halt when the individuals retire or die, or when their area of influence is too limited.
Support needs to focus on the key linkages, in particular, matrix linkages or those of greater impact. Support also needs to focus on all strategies that help stabilize the most promising linkages, such as basic education and technical training.
There needs to be progress in the systemization and knowledge of experiences of agribusiness linkages, in particular those likely to be replicated. In this way, the associative organizations will be able to evaluate: negotiation efforts; the priority of agribusiness linkages; the relevance to establishing such linkages endogenously or exogenously; the more adaptable forms with the type of linkage and with government and the private sector.
Domestic and foreign market conditions directly affect the feasibility and sustainability of agribusiness linkages in the development process. The foreign market increases the exposure and vulnerability of producers as well as the organization. Given that it is impossible to eliminate this risk, one recommendation would be to design new linkages that would provide coverage against it, e.g. market-stabilization funds. These mechanisms could involve the diversification of products and markets, and the creation of contingency funds or compensation funds (significant experiences have been noted in Colombia with trade funds for sugar and palm).
The most dynamic lines of the domestic and foreign market (e.g. fruit and horticultural crops, and semi-processed raw materials) or of special market niches (e.g. organic products) create advantageous conditions for the development of agribusiness linkages that incorporate small-scale and medium-scale producers. There should be an explicit policy relating to the kinds of consumption that show more promise in terms of domestic consumption.
It is necessary to explore new options that offer great potential, e.g. organic and environmentally-friendly products. The development of new, non-onerous linkages is required, such as relationships with quality-certification bodies and distributing enterprises in international markets.
It is necessary to insist on improving education and skills. The problematic aspect is how to bring a coherent process of learning to the productive processes. Training per se is not enough where there is no effective demand to apply the new skills acquired. The cases suggest that great demand in domestic and foreign markets, and profitable remuneration for a more select demand, are basic preconditions for innovation and learning. In general, these requirements are associated with higher levels of incomes and education of the population where the agribusiness linkages take place. A higher level of education directly affects the possibility to develop agribusiness linkages technically and managerially, as the example of Chile illustrates. Where the level of education and skills fails to improve, the linkages lose their ability to cope with new or profoundly changing environments. In the best of cases, as with the Salinas dairies, the project may make a great impact through its redistributive intervention.
Methodologically, there needs to be an approach for associative organizations that specifies the types of linkage, and the costs and benefits for the organization and the producers. Research shows that some of the costs and benefits of agribusiness linkages are hidden or not explicit. In such a situation, there can be no real evaluation of there effectiveness.
