The determinants of resource-providing contracts: Case-study of the Polish dairy sector

Growth in the agri-food sector in developing and transition countries is typically impeded by major imperfections in both input and output markets. Providing resources to farmers as part of an interlinked market contract is one way of overcoming these market imperfections. This paper identifies the factors that determine access to these types of contracts for smallholders. The econometric analysis uses data from a unique survey of Polish dairy farm households during transition. The main conclusions are that competition and FDI in the processing sector are major driving forces for the spread of resource-providing contracts.