Marketing chain analysis: a case study of the melon sector in Rio Grande do Norte state in Brazil

Abstract

The fresh fruit marketing system is increasingly focused on adding value and decreasing costs by streamlining distribution and understanding customer demands. New marketing channels have opened up as a result of a combination of changing consumer tastes and the increasing dominance of large retailers in the markets of industrialized countries. Rio Grande do Sul and Ceara states are responsible for 98% of the country’s total exports of melons when almost 99% of the fruit is designated to the European Union. This paper aims at describing the melon chain to understand the marketing chain and evaluate contractual arrangements between buyers and farmers. It also proposes an analysis of the type of governance used in this value chain regarding the characteristics of their transactions. 6 case studies were conducted with melon producers in Rio Grande do Norte state, Brazil. The theoretical background was based on concepts of Value Chain and the Transaction Cost approaches. The results demonstrate that contractual arrangements between international buyers and farmers as well as between trading companies and farmers are well-developed. However, arrangements with domestic buyers still open margin for some improvement. It is concluded the need of a support to upgrade and increase efficiency along the chains as something highly important - mainly for non-certified farmers. This would be possible via vertical integration, cooperation and coordination, including the use of written contracts among the actors in the chain. Upgrading along the value chains can help moving towards quality standards, increased international access, and better contractual arrangements.