sweet corn grower - buyer relationship performance

8/10/2019 SWEET CORN GROWER - BUYER RELATIONSHIP PERFORMANCE

1/14

International Journal of Agriculture: Research and Review. Vol., 3 (3), 502-515, 2013Available online at http://www.ecisi.comISSN 2228-7973 2013 ECISI Journals

SWEET CORN GROWER -BUYER RELATIONSHIP PERFORMANCE

MEASUREMENT

TANAKORNRACHAPILA1

, SITTHA JANSIRISAK2

1- Integral Development Studies Program Faculty of Management Science, UbonRatchathani University85 Sathollmark Rd. Warinchamrap ,UbonRatchathani Province, Thailand. 34190.

2- Assistant Professor. Faculty of Engineering, UbonRatchathani University 85 Sathollmark Rd.Warinchamrap ,UbonRatchathani Province, Thailand. 34190.

*Corresponding Author: TANAKORN RACHAPILA

ABSTRACT: The objectives of this research was to examine the level of a farmer-buyerrelationship in establishing the eight indicators of information sharing and planningcollaboration, the seven indicators of resource and benefit allocation, and the seven indicatorsof trust and commitment. In-depth interview and questionnaire were applied for datacollection. In addition, all indicators were used to analyse a process benchmarking of twosampled groups of farmers consisting of a group engaging through the agricultural extensionsystem(AES) the other was through their brokers system(BKS). The findings revealed that thefarmers who grew sweet corn based on the AES had a better level of relationship in terms ofinformation sharing and planning collaboration, as well as trust and commitment. However,the level of resource and benefit allocation was lower than the farmers engaging in tradingthrough BKS.

Keywords: Supply chain, Relationship, Collaboration, Performance, Grower, Stakeholder,Indicator

INTRODUCTION

Sweet corn is a major economic agronomy inThailand. There are large amounts ofconsumption and utilization of sweet corn eachday. The sweet corn is a perennial plantproviding greater values to the fresh marketsand the industrial factories. Recently, sweetcorn is one of the most popular crops; the 2011Thai Food Processors Association report

revealed that there were 29 factories of sweetcorn production and 64,000 hectares of itsplantation areas, and more than 35,000 farmersinvolved. About 544,000 tons of sweet cornranking the third worldwide with 5,700 millionbaht goes to the factories. As a result, sweetcorn becomes the industrial crop that manyinvestors are paying special attention to.However, the sweet corn factories in Thailandface problems related to the competition of rawmaterials and the difficulty of the plantationareas, due to its low profit compared with otherindustrial crops, such as rubber trees and sugar

cane. In addition, the government provides no

subsidy for sweet corn production. Furthermore,the Thai manufacturers have to compete withproducers from foreign countries, who receivetaxation exemption as part of free tradeagreements, and also contend with EuropeanUnion anti-dumping regulation.

Considering the present competitionconditions, business organization pays attentionto the supply chain to enhance competingpotentiality. Preliminary information reveals

that the farmers and entrepreneurs face manyproblems, such as shortages of raw materialsand seeds, limitation of planted areas,ineffective stakeholders relationship andcollaboration in terms of planning production,collaboration among suppliers, producers andcustomers, and information sharing. All theproblems mentioned above are caused by thelack of meaningful supply chain management.

In recent years supply chain performancemeasures have been in the spotlight of manyauthors. Many performance measures have beenused. In this paper efficiency was measured as

an indicator of relationship and collaboration


2/14

Intl. J. Agric: Res & Rev. Vol., 3 (3), 502-515, 2013

503

performance in the sweet corn supply chain.Asupply chain is a firm network involved indifferent processes and complex activities suchas planning, design, distribution, selling,support, usage and recycling of the product

through upstream and downstream linkages, toproduce value as products and servicesdelivered to ultimate customers (Arshinder et al,2008).Its generally defined as a network of

physical and decision-makingactivitiesconnected by material and information flowsthat cross organizationalboundaries (Van derVorst 2000).Supply chain is a research areawhich has attracted the attention of manyresearchers for more than 20 years.(Mehrjerdi,2009)According to Lambert and Cooper (2000)there are four main characteristics of a supplychain: first it goes through several stages of

increasing intra- and inter-organizational,vertical coordination. Second, it includes manyindependent firms, suggesting that managerialrelationship is essential. Third, a supply chainincludes a bi-directional flow of products andinformation and the managerial and operationalactivities. Fourth, chain members aim to fulfillthe goals to provide high customer value with abest use of resources.

Supply chain management systems arewidely used in agri foodindustry.(Aramyan,2007)The term agri-foodsupply chains has been coined to describe the

activities from production to distribution thatbring agricultural or horticultural products(Aramyan et al., 2006) from the farm to thetable. agri-food supply chains are formed by theorganizations responsible forproduction(farmers), distribution, processing,and marketing of agricultural products to thefinal consumers.(Omar and Villalobos,2009)The successful companies in agri-food businessmost focus on farmers as the key membersuppliers ,primary production improvement areincreasing the performance of the supply chainmanagement.

Strategic sourcing concept was developedto createa win-win relationship. Its importantfor seller and suppliers will have the opportunityto work together and share information and leadto an opportunity for discovery to reduce theoverall cost in long-term.

Performance measurement is critical to thesuccess of almost any organization because itcreates understanding, moldsbehavior andimproves competitiveness (Fawcett and Cooper,1998). In recent years supply chain performancemeasures have been in the spotlight of manyauthors. Many performance measures have been

used The development of more integrated

supply chains was not followed by simultaneousdevelopment of supply chain performanceindicators and metrics in order to assess theeffectiveness of a particular chainorganization.(Gunasekaran et al., 2001) This is

not only true for agri-food chains, but reflectsthe general developments in this area.Measurement of supply chain performancegives decision makers inside (e.g. producers,distributors, marketers) and outside (e.g. policymakers, investors) the supply chain informationfor decision making, policy development etc.

Performance measurement is the process ofquantifying the effectiveness and efficiencyofaction. (Neely et al., 1995)A performancemeasurement system is more than just a set ofmeasures; the system embraces three constituentcomponents: performance models, metrics, and

measurementmethods (Holmberg, 2000). The

performance model is a selected framework thatlinks the overall performance with differentlevels of decision hierarchy to meet theobjectives of the organization.

Simatupang and Sridharan (2002) The termmetric includes the definition of measure, datacapture, and responsibility for calculation(Neely et al., 1995). The measurement methodis a set of rules and guidelines formeasurement.(Adisak , 2007) There are manyways to measure the performance of supply

chain such as1)Supply Chain OperationsReference (SCOR) (Supply-Chain Council,2008) 2) Balanced Scorecard (Brewer and Speh(2000) Bhagwat and Sharma (2007) 3)Activity Based Costing (Pirttila and Hautaniemi,1994) 4) Multi-Criteria Analysis (Adisak ,2008)5) Economic Value Added Ashayeri andLemmes (2006) 6) Life Cycle Analysis(Hagelaar andVan der Vorst , 2002)7) DataEnvelopment Analysis(Zhu , 2003) and(8)Benchmarking ( Christopher, 1998;PRTM,1994; Stewart (1995). that all describedmethods have their advantages

anddisadvantages. Therefore, there is a need tocarefully consider all arguments forand againstthe selected method to measure supply chainperformance. It is alsopossible to combine twodifferent methods to measure supply chainperformance.For instance balanced scorecardcan be combined with economic value-added,because economic value added method isproject focused, while balancedscorecard isfunctional focused. Nevertheless, when using acombination ofdifferent performancemeasurement methods, great care needs to betaken to avoidconflicts between different

performance matrices used to evaluate the


3/14


504

performanceof the chain in differentdimensions.

Measuring the performance of agri-foodsupply chains is even more difficult,becauseagri-food supply chains are different from other

supply chains is the importanceplayed byfactors or someaspects such as food quality andsafety, andweather related variability.(Salin,1998) Requires conditionedtransportation and storage, perishability, longproduction throughput time, seasonality,physical product features like sensory propertiessuch as taste, odor,appearance, color, size andimage (Aramyan , 2007), shortshelf life andquality deterioration over time , productquantity and quality is high uncertainty makes itdifficult to plan for supply chain management(Porntipa Ongkunaruk , 2009).

In order to illustrate what needs to be doneto establish successful supply chain relationshipand collaboration measuring integrationbetween grower and buyer (i.e. broker andmanufacturer), What is the impact of differentfactors, particularly relationship andcollaboration, on sweet corn growersperformance . What relationship andcollaboration performance indicators arecurrently in use in sweet corn supply chains andwhat problems can be identified in measuringperformance of sweet corn supply chains? Howcan these indicators be used for the development

of a farmer and stakeholder relationship andcollaboration. The results of the research studybetween Thais sweet corn growers and byersare shown.

CONCEPTUAL FRAMEWORK

This conceptual framework focuses onprimary production in order to study therelationship among stakeholders which set thefarmers as a center in dimension of informationsharing and planning collaboration, resourceand benefit allocation and trust and

commitment. Thus, these research presentscauses of problems and guidelines for effectivesupply chain operations to enhance thecompetition capacity.

A value is created from a collaboration ofstrategic partnership based on a supply chaininvolving activities such as information,production, services, finance, and knowledgeinnovation. The strategic partnership alsocollaborates in activities processing throughupstream and downstream linkages in order toproduce value as products and servicesdelivered to ultimate customers. In other words,

this is another way to enhance and add value to

products and services as supply chaincollaboration (Jutathip, 2000). The importantfactor for effective and successful collaborationis a network to provide quality products forcustomers and sustainability (J.D.Diniz and A.S.

Figueiredo, 2011).

Types of relationshipsThe types of relationships among

organizations related to individual linkagedirection and roles, in general, are divided intotwo categories: Vertical Relationships are thegeneral relationship in supply chain such as thefarmers and buyers, the supplier and farmers.Horizontal Relationship are the relationshipbetween similar organizations or the samegroups, such as the relationship among farmers(Hong.I.B., 2002; Lazzarini et al., 2001; Coyle

et al., 2003). Bowersox et al (2002) classifiedthe relationship among organizations intoresponsibility, activities, and independence andindependency aspects involving three channels,which ranked from less dependency to highindependency: (1) Single Transaction Channels,(2) Conventional Channels occurring based onthe needs of relationship: greater or lessdependence (3) Relational CollaborativeArrangement is a collaboration relationshipwhich is sub-divided into four types: 1)Administered System is a less formalrelationship with no contract, 2) Partnership and

Alliances are an `obvious and long termrelationship. This is the formal relationship byhaving partners or alliances, but also havingindependence. However, the partnershipinvolves lesser relations than Alliances, whichact as a supply chain management, 3)Contractual System is the organizationrelationship with contract such as Franchises,and Dealership, and 4) Join Ventures are theorganizations invest collaboratively inestablishing new business activities. Harrisonand Hoek (2002) indicated that the weight ofrelationship is a driving force of the

development. If the weight of relationshipsbetween buyer and supplier is high, theimpulsion will be greater.

Supply chains relationshipPoulin et al.(1994) suggested that the

classification of organization relationship fromtraditional supplier led to co-enterprises. Theydetermined the level of relationship into 3levels: 1) Supply relationships 2) Outsourcingrelationships and 3) Co-enterprise relationships.The supply chain comprises 1) Informationsharing 2) Coordination and 3) Organizational

linkages (Lee, 2000). Moreover, the relationship


4/14


505

of supply chain is related to the level ofdependency between companies (La Londe,2002).

Harrison and Hoek (2002), Coyle et al(2002) separated the relationship into 3 types:

cooperation, coordination and collaboration(Harrison and Hoek, 2002).Coyle et al. (2003)presented the classification of relationshipbetween organization and alliances as therelationship between producer (agriculture) andmembers of organization in supply chain havingseveral forms as well as the relationship invertical and horizontal relationships betweenproducer and organization through variousactivities, including marketing co-operation,production and operation co-operation, researchand development co-operation, procurement co-operation and strategic resources co-operation

(Teerayout,2005).The relationship betweenproducer and supplier causes producing factorssuch as seed distribution, fertilizer distribution,and land use management. Thus, this researchfocuses on studying the relationship of sweetcorn growerand buyer.

Supply Chain Relationship Performance

MeasuresAccording to Humphries and Wilding

(2003) and Humphries and MaComie(2012)proposed relationship performancemeasurements as: 1) creativity, such as quality,

innovation and long term performance 2)stability investment 3) communication: opendialogue and exchange information 4)reliability: focusing on expense and risk, and,5) value: building win-winrelationship.Furthermore, the five dimensions asmentioned above are the key drivers whichcontain 8 sub-factors. These are: 1) trust 2)commitment 3) behaviour such as co-operation,co-ordination and collaboration, 4) long termorientation, 5) interdependence power andconflict, 6)adaptation and communication, 7)culture change (Humphries and Wilding, 2004),

and 8) personal relationship (Humphries andMaComie, 2010). Further to this, Ferrer et al.(2010) explained the relationship factor ofsupply chain as having 3 factors: 1) sharing,which is the organizational intention in using

resources of supply chain 2) power, which is thecontrolling relationship based on experience,knowledge and position in supply chain, and, 3)interdependency, which is the level ofdependence in supply chain.

According to the concept of C3

behaviours:co-operation, co-ordination and collaboration,this research found that these three concepts hadthe same aspect, which could not be clearlyclarified, and some factors that could not bedeveloped, so had to be integrated instead.There were seven concepts which were adaptedin this study: Karuranga, Frayret, DAmours(2008) indicated as follows: 1) circulationprediction, 2) information sharing, 3)replenishment systems, 4) joint planning, 5)

joint delivery improvement, 6) joint newproducts development and, 7) joint investment

and Simatupang and Sridharan (2004) (2005) ininformation sharing and decision-making andbenefit sharing.

The successful management was based onintegrating indicators related relationship and amember of supply chain (Christopher, 2005;Spekman et al, 1998; Stank et al, 2001). Tomeasure relationships, the indicators shouldconsider internal and external work in line withVereecke and Muylle (2006) who proposed therelationship measurement between suppliers andcustomers. Miguel A. Altieri (2009) mentionedthat minor agricultures were important for

regional food security. Hans Pongratz (1990)determined that the traditional social exchangeof agriculture was the network which linkedeconomics, policies and relationship of socio-culture of industry for Capitalist Society. Forthe agricultural industry, agriculture isconsidered as the suppliers in the supply chain.Therefore, the relationship management andagriculture were operated by purchasing systemand contract farming system (Flavia andCristina, 2005).

The agricultural extension is another activityof agricultural development. The agricultural

extension officer or Broker acts as serviceprovider to the agricultures(Semana,2001).Thus, the relationship andcollaboration between farmer and buyer causebenefit for each other.


5/14


506

Figure 1. Conceptual framework

MATERIALS AND METHODS

This research is integrated between thequalitative and quantitative research. The studyand the data collection are divided into threeparts. The first part is to study the relationshipand the collaboration of the stakeholders who isrelated to the sweet corn producer by in-depthinterviewing and focus group discussion. Thesecond part is to extract the factors and to formthe relationship and andcollaboration indicatorsthat consists of three sub-methods, 1) Themeasurement the validity of the instrument bythe expertise, 2) The analysis of the reliability,and 3) The study of need to use the indicators.

The third part is the measurement of therelationship and the collaborationperformanceof the companys case study.

Part I:The study of the relationship and thecollaboration of who is related to the sweet cornproduction by capture and collecting from thecase study stakeholder that gives the main keyinformants about the production of the sweetcorn in Northeast province of Thailandinvolving NongKhai, BeugKarn andNakhonPranom province and analyzes theinformation in many relationship aspects.

Part II is to select the factors and form the

relationship and collaboration that consist ofThree steps:The first step is the measurement of validity

of the instrument by five experts to analyze theconstruct validity (Punch,1998) that consideredby the Item Objective Congruence Index: IOCand calculate IC by the questions and the mainpoint of Rovinelli and Hambleton (1977). TheIOC of the questionnaire is 0.8442, and it shownthat the instrument has the reliability at high.The indicators have the IOC lower than 0.5 willbe deleted from the questionnairesuch as 1) theinformation sharing and planning collaboration

consists of indicators in visiting the grower, the

contentment of the grower, giving advice to thegrower, get useful advice, unsuccessful in

solving the problem. 2) The resource andbenefit allocation consists of indicators in thenumber of distributers, the rate oftransportation, the delay of delivery, and thenumber of cooperative seller. 3) Trust andcommitment consists of indicators in trust inproviding the advice and problem solvingtogether, the failure in paying; receiving theproducts and services or the quantities is notfollowed by the condition.

The second step is the reliability analysisand tries out to 30 samples by questionnaire thatconsists of 5 interval rating scales and analyst

the reliability by Cronbachs alpha coefficient.(Cronbach and Richard ,2004).These are thealpha coefficients of group indicators by thefollowing:1) Information sharing and planningcollaboration is 0.8073. 2) Resource and benefitallocation is 0.7969. 3) Trust and commitmentis 0.8215 and all reliability has the alphacoefficient at 0.9014. It is shown that thequestionnaire has high reliability. (George, D.,&Mallery, P. ,2003)

The third step is to study the need to userelationship and collaboration indicators; therewere 324 samples by multi-stage random

sampling. The purposive sampling was used tostart random by selecting the sweet cornmanufacturer that would be the representative orthe good sample and answer questions insteadof 12 from 29 sweet corn manufacturers inThailand. After that random by quota samplingand classify the sample in four groups, consistsof growers ,transporters, suppliers and buyers.The study of need to use the relationship andcollaboration indicators, the samples decided toselect the indicators in many aspects by usingthe questionnaire and the description of ratingscale indicators by using interval scale each

item using 5 point Likert scales anchored by


6/14


507

strongly agree/strongly disagree. The score willbe mean () and standard deviation () by anitem and interpret the interval scale at 0.8(Siriwan et al.,2005) and chose the mean 3.41-5.00 (Table 1).

Part III is to study the relationship and thecollaboration benchmarking between the sweetcorn grower and the company in case study inthe northeastern of Thailand two manufacturersby convenience sampling. The sampling sizecalculated by Taro Yamane method, untilobtaining enough samples.

Yamane (1967) consists of group No.1 wasthe 267 sweet corn grower in agriculturalextension system (AES) and, group No.2 was197 sweet corn growers in broker system (BKS)

RESULTS

The indicators of each group which wasconsidered the mean score of implementationrequirements, as described in Table 1., wereapplied to collect the data to determine the levelof relationships and collaboration between thesweet corn growers for processing factories andthe buyers and to compare benchmarking. Thegroup no.1 was the sweet corn growers whowere in agricultural extension system (AES),and direct in factory system and the group no.2was the sweet corn growers in broker system(BKS). The results were as follows:

1- In terms of data and information sharingbetween the growers and their buyers, for theevaluation of the level of creating opportunity toshare information between the buyers and thegrowers by using the indicator of creatingopportunity to share information, the meanscore were 3.08 and 2.28, respectively.

According to AES, an effort to createopportunity to share information was at amoderate level, and sometimes the growers andthe buyers attempted to create opportunity toshare information between each other and wereoccasionally responded. According to the BKS.,

it showed that an effort to create an opportunityfor information sharing was at a low level, andsometimes the growers and the buyersattempted to create an opportunity forinformation sharing but each group did notrespond to each other.

For the evaluation of level of experiencesharing between the growers and buyers byusing the indicator of experience sharing, themean score were 3.92 and 3.27, respectively.

This indicated that the growers and thebuyers had experience sharing at a moderatelevel, that the growers and the buyers realized

the importance of experience sharing, and that

they occasionally shared experience and initiallyapplied their experience. For the evaluation oflevel of information sharing for clarity andunderstanding ofinformation between the buyersand the growers by using the indicator of clarity

and understanding ofinformation, the meanscore were 3.75 and 3.11, respectively. Thisshowed that the growers had quite clearunderstanding of information, and they choseappropriate media and easy-understanding andconcise words for clarity and understanding ofinformation. For the evaluation of the level ofinformation sharing of the corn growing period,by using the indicator of Frequency(number)ofInformation error, the mean score were 1.36and 2.24 times per production cycle,respectively.For the evaluation of the level of

joint planning of the growers and the buyers by

using the indicator of joint planning, the meanscore were 4.45 and 4.09, respectively. Thisshowed that the growers and the buyers had ahigh level of joint planning and they both gavepriority to planning, and the plan was clear andthey often conducted mutual activities together.For the evaluation of the level of joint decisionmaking, by using the indicator of joint decisionmaking, the mean score were 3.34 and 3.03,respectively. This revealed that the growers andthe buyers had a moderate level of mutualdecision making, that they had informationcollection and proposed the decision making to

each group for approval, and that they made amutual decision of important activities. For thelevel of evaluation of joint problem solvingbetween the buyers and the growers by usingthe indicator of joint problem solving, the meanscore were 3.07 and 2.21, respectively.According to the AES, the results showed thatthe growers and the buyers had a moderate levelof joint problem solving, that they had a way tosolve problems in some occasions, and that theproblems solved together resulting in asatisfactory level. According to the BKS, theresults indicated that the growers and the buyers

had a low level of joint problem solving.Although the growers began to realize theimportance of joint problem solving and solvedproblems together but were still not clear.Forthe proportion evaluation of the level of theefficiency joint problem solving between thebuyers and the growers, by using the indicatorsof efficiency Joint problem solving, thepercentages of efficiency were 65.75 and 26.14,respectively.

2-In terms of resource and benefit allocationbetween the growers and the buyers, for theevaluation the ratio of production factor and

product value supported by the buyers by using


7/14


508

the indicator of joint investment ratio, thepercentages were 5.81 and 26.05, respectively.For the evaluation of the supports to accessfinancial fundsfor the growers by using theindicator of supporting to access financial funds,

the mean score were 3.68 and 3.12, respectively.According to the AES, the results showed thatthe buyers had a moderate level of supporting toaccess financial funds for the growers, that thebuyers helped support the growers for accessingto financial funds in some occasions. For theevaluation of the level of repurchase during oneyear by using the indicator of repurchasefrequency, the mean score were 1.86 and 2.45 ayear, respectively. This showed that the BKShad more repurchase than the AES, or thegrowers repurchased sweet corn. For theevaluation of the level of dependence, which the

growers depended on the buyers, by using theindicator of dependence, the mean score were3.64 and 2.26, respectively.

According to the AES, the results revealedthat the growers and the buyers depended oneach other in a moderate level, and the growershad other buyers and conditions of purchasingwere unsatisfied. According to the BKS, itindicated that the growers and the buyersdepended on each other in a low level and thegrowers had many other buyers, but theconditions of purchasing or service wererequired a commitment. For the evaluation of

the level of adaptation ability of the growers byusing the indicator of adaptation ability, themean score were 2.52 and 3.81, respectively.According to the AES, the results indicated thatthe growers had a low level of adaptationability. According to the BKS, the resultsshowed that the growers had a moderate level ofadaptation ability. For the evaluation of level ofindependence on purchasing and giving servicesby using the indicator of independence, themean score were 2.26 and 4.04 respectively.According to the AES, the results showed thatthe growers had a low level of independence

from the buyers that the growers had othermarkets or buyers who purchased products, orthat they had few kinds of economic plants, thatthe legal commitment made the growers unableto sell their products to other the buyers.According to the BKS, the results revealed thatthe growers had a high level of independencefrom the buyers, that the growers had manyother markets or the buyers, or that they hadmore kinds of economic plants but sometimesdepended on the buyers, and that the legalcommitment had no effect but they were unableto sell their products to other buyers because of

other conditions. For the evaluation of level of

growers opportunity for negotiation with thebuyers by using the indicator of negotiation, themean score were 2.24 and 3.17, respectively.According to the AES, the results showed thatthe growers had a low level of negotiation

opportunity with the buyers, and they still hadan opportunity and were required to negotiatewith the buyers, but the negotiation was notresponded.

According to the BKS, the results showedthat the growers had a low level of negotiationopportunity, and occasionally the growers hadan opportunity and were able to negotiate withthe buyers only in some issues and conditions.For the evaluation of the level of buyers controland empowerment towards the growers, usingthe indicator of control and empowerment, themean score were 3.92 and 2.68, respectively.

According to the AES, the results revealed thatthe buyers had a high level of control andempowerment towards the growers, and thegrowers needed to have permission from thebuyers before doing anything. According to theBKS, the results revealed that the buyers had alow level of control and empowerment towardsthe growers, and the growers had more freedomto do anything under market conditions. For theevaluation of opportunismlevel, by using theindicator of opportunism, the mean score were2.17 and 4.02, respectively. According to theAES, the results showed that the growers had a

low level of opportunism. According to theBKS, the results revealed that the growers had ahigh level of opportunism. For the evaluation oflack of quality level by using the indicator oflack of quality, the mean score were 2.02 and3.71, respectively. According to the AES, thegrowers found or received low-quality productsor services in a low level, and they receivedlow-quality products or services 2-3 times ayear.

According to the BKS, the growers found orreceived low-quality products or services in amoderate level, and they found or received low-

quality products or services 4-5 times a year.For the evaluation of delivery lead time level byusing indicator of delivery lead time, the meanscore were 3.27 and 4.12, respectively.According to the AES, it was found that thebuyers could not deliver products or services inthe required amount and the growers wererequired to wait for a while (such as receivinggrain or planting date). According to the BKS,the results showed that the buyers could deliverproducts or services in required amount and ontime but sometimes deliveries were late.

3- In terms of trust and commitment

between the growers and the buyers, for the


8/14


509

evaluation oftrust in complements of qualitylevel by using the indicator of trust incomplements of quality, the mean scorewere3.62 and 3.14,respectively.This indicated thatthe growers had a moderate level of trust,

whichproductsor services had the requiredquality in accordance with commitment, andsometimes the growers had found that thequality of products or services was not inaccordance with commitment in an acceptablelevel. For the evaluation of trust in complementsof quantity level by using trust in complementsof quantity indicator, the mean score were 4.65and 4.78, respectively. This showed that thegrowers had the high level of trust incomplements of quantity, and rarely the growershad found that the quantity of products orservices was not in accordance with

commitment in an acceptable level. For theevaluation of trust in delivery time level byusing the indicator of trust in delivery time, themean score were 4.61 and 4.13, respectively.This indicated that the growers had a high levelof trust in delivery time in accordance withcommitment, and rarely the growers had foundthat the delivery time was not in accordancewith commitment in an acceptable level.For theevaluation of trust in trade agreement level,using the indicator of trust in trade agreement,the mean score were 3.05 and 2.64, respectively.

According to the AES, it was found thatthe

growers had a moderate level of trust in tradeagreement, andthey still had some doubts inregulations and conditions of trade, and thebuyers began to have activities or tries to showthat the regulations and conditions of tradewould be fair for the growers in some occasions.According to the BKS, the results indicated thatthe growers had the low level of trust in tradeagreement, andthey still had some doubts inregulations and conditions of trade, and thebuyers had no activities or tries to show that theregulations and conditions of trade would be fairfor the growers. For the evaluation of trust in

financial deal level by using the indicator oftrust in financial deal, the mean score were 3.71and 2.45, respectively. For the AES, it wasfound that the growers had a moderate level oftrust in financial deal, and they had found thatsometimes a payment was not in accordancewith the commitment in an acceptable level. Forthe BKS, it was found that the growers had alow level of trust in financial deal, and they hadfound that often a payment was not inaccordance with the commitment in anunacceptable level. For the evaluation of trust ininformation sharing level by using the indicator

of trust in information sharing, the mean score

were 4.15 and 3.82, respectively. According tothe AES, it was found that the growers had ahigh level of trust in information sharing, andthey believed that suggestions were applicable,and that information for problem solving was

obvious and up-to-date, and communicatorswere quite reliable, proficient, and responsive toquestions, and that information sharing wasobvious, up-to-date and reliable. According tothe AES, it was found that the growers trustedin information sharing in some issues, and theybelieved that the suggestions were applicable,and that information for problem solving wasobvious and up-to-date, and communicatorswere sometimes quite reliable, proficient, andresponsive to questions, and that informationsharing was obvious, and up-to-date butsometimes doubtful.For the evaluation of the

level of implementation of the commitment byusing level of implementation of thecommitment indicator, the mean score were3.88 and 4.06, respectively.

According to the AES, the results indicatedthat implementation of the commitment was at amoderate level, and the buyers implementedonly some issues depending on an occasion.According to the BKS, the resulted showed thatthe implementation of the commitment was at ahigh level, and the buyers were able toimplement the commitment in important issues.

DISCUSSION

The relationship and collaboration betweenfarmers and buyers is currently beingchallenged. It has been found that farmers whogrow sweet corns have a collecting system buttheir frequency in giving incorrect informationto buyers is 2.34 times per production since thebrokers misunderstood, and chose their ownway of sending information which is notappropriate. It has caused a lot ofmisunderstanding amongst farmers, and theyalso lack of the skills to get information

(Jitendra, 2007).The joint resolution (Meanscore 2.21) addresses the problem in which thefarmers and buyers can solve the problemeffectively at 26.14 of the time for assisting thebrokers and their lack of knowledge ofacademics (Vijay Sardana, 2012). The problemis mainly caused by the brokers who suggestedthe wrong way to report production data, andthe same group offering alternatives to solvethe problem with no positive results(MethaSuteeraroj, 2011). These same farmersare likely to be the brokers thus they can takeadvantage of the situation (Mean score 3.62).

Since the buyers will lack or have no


9/14


510

bargaining power. The brokers will be in aposition to control the most useful stock (Xuand Beamon, 2006) and other farmers also endup being exploited when the brokers have theopportunity (Hosmer, 1995). Farmers do not

rely on the rules and conditions of trading withthe brokers (Mean score 2.64) because thesefarmers believe that they do not have a fairshare, and those brokers have no morals orintegrity. (Mayer et al. (1995). The qualitybrokers also failed to comply with theagreement faithfully (Hosmer,1995). Theyviolate the financial agreement between farmersand lower buyers (Mean score 2.64. and 2.45)because the brokers reportedly do not payfarmers who complete their task anddisappointingly they pay later than the timeagreed upon in the details of payment terms

where timing of payment is made crystal clear(Marta, 2012). To support the productiontogether with the yield between farmers andbuyers, the farmers have grown sweet corn insupport system of production with percentage5.81% which is the lowest for the buyers forthat period.

There is an effort to reduce the cost ofproduction and avoid debt that does not generateincome for farmers (Non-performing loans).The problem of unpaid debts and bad debts inthe agricultural sector has an impact on theamount of credit facilities, on the farmers

(Kwanchanok,2010), and on the inputs to theproduction as well. During product purchase orservice (average 1.86 times per year), it showsthat buyers who are in the brokers group wereable to buy the product at much lower prices.Hence, a few farmers are satisfied or motivatedto return to grow sweet corn again (Chen., 2008;Alegre and Cladera, 2009).

Furthermore, customer royalty to farmers issuffering (Kumar and Shah, 2004; Hsu, 2007).Those who intended to grow over this farm haverecommended the customers to the otherfarmers. (Taylor, 1998; Ryu el al., 2007). The

degree of dependence on the buyers is going forfarmers who grow corn in the agriculturalindustry. The farmers reliance on buyers ismoderately high (Mean score 3.64) sincefarmers have no training in the field of sales andmarketing for purchasing their goods. The termsand conditions of the purchase order are notsatisfactory enough for farmers. Studies haveshown these farmers who grow corn in theagricultural industry even farmers have theability to adjust their reliance much lower(average. 2.52). The farmers should make orproduce other products. They can change to

other kinds of crops that are suitable with the

area, and they must review the terms andconditions in sales and marketing, and the waysto produce that the factories want. (Dolan et al.,2001). The study on degree of the freedom tosell or use have shown that farmers who plant

corn in agricultural systems are free to sell oruse the services of a buyer at a low level(Average. 2.26). The farmers were independentfrom the buyers but only at a low level. Thesefarmers may not be available to other buyers topurchase sweet corn or other crops, but suchfreedom is limited. Research shows that legaleffect of the contract which the farmers make tothe buyers states that farmers cannot produce tosell to others at all (Sumet, 2007; Tossapol,2011).The opportunity and the ability tonegotiate with the farmers is relative such thatthe group which planted corn in the agricultural

industry have the ability to negotiate lower(Mean score 2.24). The farmers have enough tofile a claim, but a claim or to negotiate is uselesswith buyers who often do not respond and donot compromise (Adler et al., 1992). Thepurchaser is often at an advantage to claim. It isthe policy of the company made by executivesat headquarters which set up farmers who tendto be at a disadvantage level (Turton, 1987).The odds are against the professional farmers inagricultural commitments and they are helplessto optimize production utilities amongstthemselves (Navin, 2011). The level of

command and control of farmers who grow cornin the agricultural industry are still wellmanaged (Mean score 3.92). It is noted thatfarmers will continue in any conversion or theyield of the crop. It must be approved by thepurchaser before actual production. It is aunified control and restricted the decision ofbuyers (McCann and Galbraith, 1981).Currently, the farmers had heard that there is adevelopment of service learning assistance withrespect and honor between each other with ateam of advices who offer agricultural supportand work together and not against one another

(Kanter, 1989).The opportunity to takeadvantage of, this will find these farmers whogrow corn in their ingredients welcoming theseopportunities for those involved or takingadvantage of these opportunities (Mean score of3.62). There is a disadvantage in the price ofoutput which is expected to be less than normal,as well as the lower prices of goods andproducts, thus causing hardship to farmers atlow rates (Simatupang and Sridharan, 2004).Thelow level of trust in the rules and conditions ofsale is also found between the farmers whogrow corn with the brokers. The farmers believe

that they have a fair few. The farmers still have


10/14


511

many questions on the rules and conditions ofsale. Buyers do not have activity or any attemptto show that farmers receive a fair trading termsand conditions. (Benchaphun et al.,2011) andthe level of trust in finance reveals that the

farmers who grow corn with the brokers whichoffers payment to the brokers according to the

agreement. Agricultural organizations havefound that the payment terms in the agreementwere unacceptable. As a result there is ofuncertainty in terms of the contract and thenumber of farmers get inputs from the brokers is

increasing (Benchaphun et al.,2011).

Table1. Indicators of relationships and collaboration between the growers and the buyersIndicators usage need Benchmarking Score

IndicatorsMean S.D. AES BKS

1.Data and Information Sharing1.1 Level of creating opportunity to shareinformation

4.31A 0.7438 3.08 2.28

1.2 Level of experience sharing 4.53A 0.6494 3.92 3.271.3 Level of clarityand understandingofInformation

3.97B 0.7485 3.75 3.11

1.4 Frequency(number)ofInformation error 4.18A 0.7567 1.36 2.34*

1.5 Level of joint planning 4.07A 0.8278 4.45 4.091.6 Level of joint decision making 3.61A 0.6179 3.34 3.031.7 Level of joint problem solving 4.31A 0.8160 3.17 2.21*

1.8 Percentage of efficiency joint problem solving 4.07A 0.6986 65.75 26.14*

2. Resource and Benefit Allocation2.1 Joint investment ratio 3.46B 0.6700 5.81* 26.052.2 Level of supporting to access financial funds 4.21B 0.8711 3.68 3.122.3 Level of repurchase 4.07B 0.7185 1.86* 2.452.4 Level ofdependency 4.11B 0.7971 3.64* 2.262.5 Level of adaptation ability 4.14B 0.7747 2.52* 3.812.6 Level of independency 4.26B 0.8557 2.26* 4.042.7 Opportunity and ability level of negotiation 4.42A 0.5753 2.24* 3.172.8 Level of control and empowerment 4.22A 0.7732 3.92* 2.682.9 Level of Opportunism 4.10B 0.8419 2.17 3.62*2.10 Level of Lack of Quality 4.28A 0.7165 4.02 3.712.11 Level of Delivery lead time 4.06B 0.7294 3.27 4.123. Trust and commitment3.1 Level of trust in complements of quality 4.33A 0.6920 3.62 3.143.2 Level of trust in complements of quantity 4.29A 0.7207 4.65 4.783.3 Level of trust in delivery time 4.33A 0.7861 4.61 4.133.4 Level of trust in trade agreement 4.39A 0.7422 3.05 2.64*

3.5 Level of trust in financial deal 4.25A 0.8179 3.71 2.45*

3.6 Level of trust in information sharing 4.40A 0.7442 4.15 3.823.7 Level of implementation of the commitment 4.03B 0.8877 3.88 4.06

Remark :**Mean score of Implementation requirementAverage score level A means strongly agree ; Average score level B means agree

Recommendations include offers fullyintegrated and activities developed to reduce the13 plus the development of an information-gathering system for the brokers. Brokers andthe advisory must support and develop thesolution and combination of materials, to reducethe chance of farmers being taken advantage ofand to decrease taking advantage of the rawmaterials and the terms and conditions of thesale in order to build trust and sustainability.Both sides must strengthen the confidence of thefinancial agreement between farmers andgatherers of raw materials by bank transfer to

factories and directly to farmers or factory as amediator in the contract. Inputs from both sidesmust be noted to support the development ofmaterials and to reduce the dependency betweenfarmers and factories. These showed be anincrease the ability of farmers to adapt. Farmersshould be allowed to increase the freedom tosell or use the farm to the factory. They must beassisted in enhancing opportunities for theirability to negotiate.

Lastly, there must be a reduction ofcommand and control between farmers andfactories, and increasing sales for farmers to


11/14


12/14


513

relationships Asia Pacific Journal ofMarketing and Logistics. 22(3):419-440.

FlaviaEchnove and Cristina Steffen (2005)Agribusiness and Farmers in Mexico:

The Importance of ContractualRelations. The GeographicalJournal.171(2):166-176.

George D, Mallery P (2003) SPSS for WindowsStep by Step: A Simple Guide andReference. 11.0 update. 4. Allyn&Bacon; Boston. p. 231.

Gunasekaran, A., Patel, C. and Tirtiroglu, E(2001) Performance measures andmetrics in a supply chain environment.International Journal of Operations andProduction Management. 21(1/2): 71-87.

Hagelaar, G.J.L.F. and Van der Vorst, J.G.A. J(2002) Environmental supply chainmanagement: Using life cycleassessment to structure supplyChains.International Food andAgribusiness Management Review.4:399-412.

Hans Pongratz (1990) Cultural tradition andsocial change inagriculture.Sociologiaruralis. 30(1): 5-17.

Harper and Row.Zhu, J (2003) Quantitativemodels for performance evaluation and

benchmarking. Dordrecht: KluwerAcademic Publishers.

Harrison, A. & van Hoek, R (2002) Logisticsmanagement and strategy, England;Pearson Education Limited.

Holmberg, S (2000) A system perspective onsupply chain measurements.International Journal of PhysicalDistribution & LogisticsManagement.30 (10):847-868.

Hong I.B (2002) A new framework forinterorganizational systems based on thelinkage of participants' roles.

Information & Management. 39(4):261-270.

Hosmer, LT (1995) Trust: The connecting linkbetween organizational theory andphilosophical ethics. Academy ofManagement Review. 20(2):379-403.

Hsu, S. H (2007) Developing an index foronline customer satisfaction: Adaptationof American customer satisfactionindex. Experts System WithApplications. 34:3033-3042.

Janaina Deane de Abreu Sa Diniz and Adelaidedos Santos Figueiredo (2011) Integrated

Logistics in the Supply of Products

Originating from Family FarmingOrganizations. Supply ChainManagement - New Perspectives,SandaRenko (Ed.), InTech, August2011

JitendraChauhan (2007) Agriculture extensioneducation communication in agriculture.[Online].Available:http://nsdl.niscair.res.in/bitstream/123456789/517/1/PDF+Communication+in+Agriculture.pdf. (Access date :April 23, 2012).

JutathipPattrawat (2010) Suppy chainmanagement framework. Co-operativeAcademic Institute, KasetsartUniversity. . [Online]. Available:http://www.cai.ku.ac.th/article/article_280653.pdf. (Access date : April 15,

2012).Kanter, R.M. 1989. When giants learn to dance.

New York: Simon & Schuster.Kumar, V. & Shah, D (2004) Building and

sustaining profitable customer loyaltyfor the 21 century.Journal of Retailing.80:317-330.

Kwanchanok Rodprasert (2010) Causes andproblem solving on loan defaults ofmembers of agriculture co-operatives inMueangsrakeaw limited. Master ofbusiness administration thesis. BuraphaUniversity. Thailand.

Lambert, D.M. and Cooper, M.C (2000) Issuesin supply chain management. IndustrialMarketing Management. 29(1):65-83.

Lazzarini, S.G., Chaddad, F.R., Cook, ML(2001) Integrating Supply Chain andNetwork Analyses: The Study of Netchains. Journal on Chain and NetworkScience. 1:7-22

Lei Xu and Benita M. Beamon (2006) SupplyChain Coordination and CooperationMechanisms: An Attribute-BasedApproach. Journal of Supply ChainManagement. Volume 42, Issue 1, pages

412, February 2006.Lusine H. Aramyan (2007) Measuring supply

chain performance in the agri-foodsector. Doctors Thesis: WageningenUniversity.

Lusine H. Aramyan, Alfons G.J.M. OudeLansink, Jack G.A.J. van der Vorst andOlaf vanKooten (2007) Performancemeasurement in agri-food supplychains: a case study. InternationalJournal SupplyChain Management. 12:304315

Lusine H. Aramyan, C., Van Kooten O. and

Oude Lansink, A (2006) Performance


13/14


514

Indicators in agri-food productionchains, In Quantifying the AgrifoodSupply Chain.

Marta Doria (2012) Contract farming:Legalconsiderations on contractual design and

enforcement. Food and AgriculturalOrganization of The United Nation.[Online].Available:http://www.fao.org/fileadmin/user_upload/contract_farming/Brief%201%20legal%20aspects%20of%20contract%20farming.pdf. Access date : July 5,2012.

Mayer, R. C., Davis, J. H., & Schoorman, FD(1995) An integrative model oforganizational trust. Academy ofManagement Review. 20:709734.

McCann, J.E. & Galbraith JR (1981)

Interdepartmental relations. In P. C.Nystrom & W. H. Starbuck (Eds.)Handbook of Organization Design NewYork: Oxford University Press. pp. 60-84.

Meta Suteeraroj (2011) Problem solving skillsand critical thinking skills in strategicdecisions. .[Online].Available:http://coop.ea.rmuti.ac.th/download/pre_2-2554/pre_4-1.pdf. (Accessdate : Dec.18, 2011)

Miguel A. Altieri (2009) Agroecology , SmallFarms, and Food Sovereignty.

Environment Science Monthly review.61(03) (July-August).

NavinSopapum (2011)The Famers negotiatingstrategies under agro-food industry : acase study of potato growers in ChiangMai Province. Master thesis.Chiang MaiUniversity.

Neely, A., Gregory, M. & Platts, K (1995)Performance measurement systemdesign: a literature review and researchagenda. International Journal ofOperations&Production Management.15(4):80-116.

Neely, A., Mills, J., Platts, K., Gregory, M. andRichards, H (1994) Realizing Strategythrough Measurement. InternationalJournal of Operations and ProductionManagement. 14(3): 140-52.

Omar Ahumada, J. Rene Villalobos (2009)Application of planning models in theagri-food supply chain: A review.European Journal of OperationalResearch. 195:120

Ondersteijn, C.J.,Wijnands, J.H., Huirne R.B.and Van Kooten O (Eds.) pp. 47-64:Berli; Springer,

Pirttila, T. Hautaniemi, P (1994) Activity-basedcosting and distribution logisticsmanagement. International Journal ofProduction Economics. 41:327-333.

PorntipaOngkunaruk (2009) Supply chain

management for agricultural industry.For quality. 16(143):58-61.

Poulin D., Montreuil B., et Gauvin S (1994)Lentreprisereseau:batiraujourdhuilorganisation dedemain.Publi-Relais, Montral, Qubec.

PRTM (1984) Third Annual Supply ChainPerformance Benchmarking Study.Pittiglio Rabin Todd and McGrath(PRTMs)

Punch, K (1998) Introduction to SocialResearch: Quantitative and QualitativeApproaches, London, Sage.

Rovinelli, R. J., &Hambleton, R K (1977) Onthe use of content specialists in theassessment of criterion-referenced testitem validity. Dutch Journal ofEducational Research.2:49-60.

Ryu, K., Han, H., and Kim, TH (2007) Therelationships among overall quick-causal restaurant image, perceivedvalue, customer satisfaction, andbehavioral intensions. InternationalJournal of Hospitality Management.12(3):23-25.

Salin, V (1998) Information technology in agri-

food supply chains. International Foodand Agribusiness Management Review.1(3):329334.

Simatupang, T.M., R., Sridharan (2002) TheCollaborative Supply Chain.TheInternational Journal of LogisticsManagement. 13(1):15-30.

Spekman, R., T. Forbes, L. Isabella en T.MacAvoy (1998) Alliance management:a view from the past and a look to thefuture. Journal of Management Studies.35(6):747-772.

Stank, T.P., S.B., Keller, P.J. Daugherty (2001)

Supply chain collaboration andlogistical service performance. Journalof Business Logistics. 22(1): 29-48.

Stewart Gordon (1995) Supply chainperformance benchmarking studyreveals keys to supply chainexcellence.Logistics InformationManagement. 8(2):38-44.

Taylor, T (1998) Better loyalty measurementleads to business solutions. MarketingNews. 32(22):41

Teerayout Wattanasupachoke (2005) Strategicmanagement and Competition.

Chulalongkorn University press.


14/14


515

TossapolTassanakulpan (2011) Contractfarming and out of poverty. MathichonOnline. [Online].Available:http://www.matichon.co.th/news_detail.php?newsid=1307455177&gr

pid&catid=02&subcatid=0207Turton Andrew (1987) Production , Power and

participation in rural Thailandexperience of poor farmers groups.Geneva Switzerland, United NationResearch Institute for socialdevelopment.

Van der Vorst, J.G.A.J (2000) Effective foodsupply chains: generating, modellingand evaluating supplychain scenarios.ProefschriftWageningen [Online].

Available:http://www.library.wur.nl/wda/dissertations/dis2841.pdf]

Vereecke, A., S., Muylle (2006) Performanceimprovement through supply chain

collaboration in Europe. InternationalJournal of Operations & ProductionManagement. 26(11):1176 - 1198.

Vijay Sardana (2012) Common Mistakesdecision makers make in AgribusinessEnterprises.Process food industry.

W.G. Cochran (1977) Sampling Techniques, 3rd

edition. John Wiley & Sons, Inc.Yamane, Taro (1967) Statistics, An Introductory

Analysis, 2nd Ed., New York.

sweet corn grower - buyer relationship performance

Documents