PR - THE PRAIRIE FRESH FOOD CORPORATION

Abstract:

In light of the increasing importance of fresh vegetable demand, examining the role of a new marketing organization in the province is important as it might bring about a major realignment of the Saskatchewan fresh produce market. This paper uses Transaction Cost Economics and Agency Theories to analyze the factors that influence a sample of Saskatchewan vegetable growers when participating in a new contract and taking advantage of potential opportunities. It considers the advantages and barriers or potential challenges to wholesalers and retailers cooperating with this new organization (Prairie Fresh Food Corporation (PFFC)). In addition, an economic model of economies of scale through collective action is developed. The case study analysis of PFFC reveals that the organization could provide positive benefits to its member. The market share of the PFFC is still relatively small throughout the province, but its members expect it to expand in the future. The results suggest that trust in the buyer has a positive effect on the probability of farmer participation in the project.

Keywords: Transactions Costs, Collective Action, Economies of Scale