*Article* **Can Family Farmers Thrive in Commodity Markets? Quantitative Evidence on the Heterogeneity in Long Agribusiness Supply Chains**

**Thiago de Carvalho Verano 1,\*, Gabriel da Silva Medina <sup>2</sup> and João Ricardo de Oliveira Júnior <sup>3</sup>**


**Abstract:** *Background*: Family farmers' participation in marketing channels has prompted debates on the types of market best suited to this type of farmer. Commodity production by rural communities and the role of agribusiness long marketing channels for family-based farmers are the subjects of numerous qualitative studies. However, quantitative studies capable of assessing the relevance of long channels to family-based farmers are scarce. Therefore, this study intends to assess the relevance of long marketing channels for family farmers. *Methods*: We compiled the data from the survey responses of family farmers from 155 municipalities in a state in the central region of Brazil. *Results*: (1) There was an economic concentration of some marketing channels, namely, the sale of commodities occurred in 35% of the municipalities and included 4.15% of the sampled family farmers. The income derived through these channels represented 2.13% of the farmers' total income included in the study. (2) There is a low diversity of market types. On average, we found 2.95 long marketing channels per municipality. (3) Family farmers' participation is low in most commodity long channels. Between 0.11% and 4.15% of the family farmers in the sampled municipalities participate in these channels. Long channels linked to the cattle production chain showed more relevant capacity for inclusion. *Conclusions*: Contrary to the expectations of those behind initiatives to promote the marketing and sale of locally-sourced commodities within rural communities, agribusiness long marketing channels provide limited opportunities for family farmers to market their goods.

**Keywords:** rural development; agri-food systems; alternative models; agriculture; Brazil

#### **1. Introduction**

Family farmers' participation in commodity supply chains has considerably increased in South American countries in recent years, due to the increase in worldwide demand for agricultural produce and the increase in the prices of such products in global markets [1]. This process has contributed to the emergence of a group of highly technified family farmers integrated into the markets. However, it has promoted other developments in the agrarian market's dynamic, such as the weakening of the rural communities involved due to a greater dependence by farmers on external resources, with a related reduction in their autonomy [1].

Studies have shown that the only way for small-scale agriculture to survive the modernization process is to adopt new technologies and participate in large commodity markets [2]. Others studies point to the weaknesses of this process of inclusion in modern agro-industrial systems [3]. However, there is a lack of research that quantifies the social and economic relevance of the processes mentioned above to family farmers. Studies have shown several potential bottlenecks of this inclusion process [4,5], but the lack of

**Citation:** Verano, T.d.C.; Medina, G.d.S.; Oliveira Júnior, J.R.d. Can Family Farmers Thrive in Commodity Markets? Quantitative Evidence on the Heterogeneity in Long Agribusiness Supply Chains. *Logistics* **2022**, *6*, 17. https://doi.org/ 10.3390/logistics6010017

Academic Editor: Robert Handfield

Received: 30 December 2021 Accepted: 4 February 2022 Published: 22 February 2022

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**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

quantitative investigation has made it difficult to deepen the analysis of the role of different markets in the rural development process. Thus, this study seeks to help fill this gap.

This study focuses on the opportunities and limitations for inserting family farmers in long commodity marketing channels. We sought to investigate to what extent such channels can promote the inclusion of family farmers. Thus, this study aimed to assess the capacity of long marketing channels to include and generate income for family farmers.

The specific research objectives of this study were to: (1) identify and spatialize the diversity of long marketing channels available to family farmers in the municipalities of the Brazilian state of Goiás; (2) quantify the participation of family farmers in different long marketing channels; and (3) assess the economic relevance of this type of commercialization to the income of family farmers in Goiás.

#### **2. Literature Review**

#### *2.1. Concepts: Long and Short Channels, Agribusiness and Family Farming*

Long channels are agro-industrial supply chains that involve an extensive network of intermediary agents that generate standardized products without identity through weak or non-existent relationships between producer and consumer and production and consumption [6]. We can characterize short supply channels (which, in the relevant literature, are called short food supply chains) according to two dimensions. The first relates to the organizational structure through which the product is marketed and can be of three types—direct sales, spatial proximity, or spatially extended. The second dimension relates to the qualitative definition of the product itself (organic, agroecological, healthy, local, regional, traditional, among others) [7].

Short supply channels are not necessarily an alternative to long channels [8], nor are they the antithesis of long channels, or in a diametrically opposite position in agri-food systems [9]. In the same way, we cannot analyze short channels and long channels through the lens of dichotomy [9], as agribusiness and family farming are not necessarily antagonistic social and productive categories either [10].

Despite the construction and consolidation of the concept of agribusiness being the subject of a complex political, academic, and social dispute [11], we can understand agribusiness to be the set of operations and transactions that occur downstream, upstream, and within agricultural units. Therefore, they involve both the production of inputs and machinery, services, processing, and marketing, as well as agricultural production itself [12].

In Brazil, to be legally classified as a family farmer, it is necessary to meet the criteria established by Law 11,326/2006 and the MDA Ordinance n. 102/2012 [13]. In general, we can deem a family farmer as a person who mainly employs family labor, whose family income comes mainly from agricultural production generated within a rural household, and whose farming area does not extend beyond four fiscal modules. According to the municipality, a fiscal module in the state of Goiás varies between 16 and 70 hectares.

#### *2.2. The Productive Inclusion of Family Farmers in Markets*

Promoting the development of family farms in Brazil presents several obstacles. First of all, the implementation of public policies can limit the potential of family farmers, as different groups are treated as equals. Few regions have favorable conditions for developing modern family farms, and few farmers are in a favorable position vis-à-vis the established markets. Such conditions may explain the fact that less than 25% of Brazilian family farmers are integrated into these markets [14].

Market integration can be a driving force behind family farming, as the more significant the integration, the greater the income in this category [14]. In recent years, there has been a concomitant increase in the production of various agricultural products (mainly agricultural commodities) in Brazil and a decrease in the number of rural establishments producing such products. This demonstrates that a concentration process has taken place in these production systems, explained by the need to specialize production to reduce costs and increase scale. This is reflected in many family farmers' departure from production chains, such as those linked to integration systems with large agribusinesses and contract agriculture [15].

The inclusion of family-based farmers in marketing circuits as a strategy for promoting rural development seems to be something crystallized in the literature [16,17]. The discussion about the types of commercialization that value family farmers and promote the endogenous development of rural communities [18] must also take into account factors that (in the context of national rural development) weaken some chains by having a large part of the links transnationalized [19,20]. Thus, it is necessary to deepen studies on the relevance of the productive inclusion of family farmers in long marketing channels and the consequences of this process in rural development.

We can find three strands in the literature that analyze the insertion of family farmers: the first defends the thesis that it is necessary to insert family farmers in conventional production chains and provide support so that they can compete with large producers—long marketing channels [21]; the second current defends the need to strengthen and create new marketing channels based on reciprocity, territoriality and trust—short sale channels [6]; and the third current presupposes an analysis of the inclusion of family-based farmers under the lens of interaction and coexistence between short and long channels—the coexistence of markets [9].

We can consider the strategy, by some theorists, of including family farmers in long production and marketing channels (commodity chains, for example) as the easiest and fastest alternative for the productive inclusion process of this category and the poverty reduction of rural populations [22]. Therefore, viable marketing channels for family farmers would be the large hegemonic chains (however, we would condition this participation to articulation in associations and cooperatives) and market niches. However, we know a significant portion of this category cannot enter such marketing modalities [23]. The inclusion of family farmers in long marketing channels has been greatly encouraged through public policies of the Brazilian State, mainly in support of soybean cultivation for the production of biodiesel [24].

We also know that family farmers sell their products in different marketing modalities and that long channels are one of these modalities. One of the factors that condition the ability of family farmers to enter and remain in the long channel is the specialization and technification of their production systems [2]. In Brazil, these characteristics are not recurrent among family farmers [25]. From this context emerges the hypothesis that the long channels cannot include many Brazilian family farmers.

Moreover, we can explain the difficulty of family farmers to access markets by the lack of access to production and communication technologies [14]. With the emergence of advanced technologies in agriculture and supply chains, this difficulty can be increased, especially when it comes to the inclusion of family farmers in long channels.

#### *2.3. Advanced Technologies and the Participation of Family Farmers in Agricultural Markets*

The use of advanced technologies in different links of the supply chain is growing. Blockchain technology is one of the prominent examples of this process that presents both potential and challenges, especially when it comes to the inclusion of small-scale farmers. This technology guarantees transparency in transactions, traceability of products and production processes, and helps in the governance of supply chains. It has great potential to help family farmer cooperatives increase their competitiveness in inserting their products into long marketing channels. However, such technology is still not very accessible, and demands an extensive information infrastructure and know-how that are not always present in family farmer organizations [26].

#### *2.4. Family Farmers in Long Channels: Lessons and Experiences from Other Countries*

The long channels operate with different logics in different countries, presenting differences and similarities regarding the participation of agents from rural communities. Thus, it is necessary to review the literature on the subject in the different realities of

countries to understand how family-based farmers participate in long channels, and to identify their challenges and opportunities. Family farmers' participation in long marketing channels occurs in very heterogeneous ways, and is different in each country in the world.

The vertiginous increase in soy-planted areas in South America has brought several environmental, social, and political consequences to the territories of these countries. In Argentina, it has impacted ways of life of rural communities, provided the reconfiguration of work processes for members of rural families, and contributed to family farmers leaving their agricultural activities in search of wages on soy farms, causing new population flows between regions [27].

Encouraging the insertion of Paraguayan family farmers into the soybean chain led to the differentiation of this social category into two groups: (1) few technified farmers capable of leasing more and more areas; and (2) many indebted farmers who lost their land to pay debts incurred to enable soybean production [1].

The strengthening and growth of large dairy and milk processing companies have, to a certain extent, led to a process of loss of identity for Canadian family farmers who produce milk. Milk and its derivatives, which were previously products that symbolized the approximation between people from the countryside and the city (through the construction of the social value of the products), became impersonal and standardized foods, distancing producers from consumers [28].

Rising global demand for Mexican tequila has contributed to mergers of large beverage companies and acquisitions by transnational corporations of local ventures. Thus, with the growing demand, some Mexican family farmers started to implement agave monocultures, reducing their productive diversity, and others rented their land to large producers, losing autonomy [29].

In South Africa, large supermarkets are increasingly becoming the leading players in the fruit, vegetable, and processed food markets. Although this commercialization channel was not able to include a significant portion of family farmers in that country, it demonstrated the ability to create strategies, protocols, and a chain governance model that promoted the professionalization and productive inclusion of a relatively large number of farmers who were previously excluded from the markets [30].

In some societies, the middleman or intermediary figure in the marketing channels is seen as harmful to agri-food systems, as it supposedly appropriates a large part of the farmers' profit margin. In Papua New Guinea, the population increase in urban centers and the increase and differentiation in demand for food provided a more significant insertion of intermediaries in agri-food systems. This process was necessary to dynamize the mercantile food exchange processes and productive specialization and reduce transaction costs for family farmers. On the other hand, it reduced the earnings of some farmers and excluded others from participating in city fresh food markets [31].

In all previous experiences, family farmers' participation in long channels affected their livelihoods. Some mentioned the consequences of this process in territorial configuration, others in the professionalization of family farmers, others in the dynamization of supply chains, but none addressed the ability to include family farmers in different long channels.

#### *2.5. Gaps in Previous Studies and Contributions of This Research*

Studies on family farmers' participation in long marketing channels address the challenges and opportunities of this process without quantifying the capacity of this type of channel to include small farmers. This gap makes it difficult to understand the real potential that these channels represent for the development of Brazilian family farmers. This study addresses this gap by quantifying the capacity of agribusiness long supply chains to include family farmers. This is considered for each of the different long marketing channels, and thus we seek to contribute to the literature by revealing the heterogeneity of long channels and the importance of channel diversity (long and short).

#### **3. Materials and Methods**

The low availability of data in the Brazilian Agricultural Censuses regarding the commercialization of family farmers is an obstacle to rural development studies. The 2017 Agricultural Census, as well as the previous ones, gathered data related to different production types (plant extraction, agroindustry, fruit growing, horticulture, temporary farming, permanent farming, and livestock), taking into account aspects of production such as volume produced, technologies used, value and sales volumes, and the profile and condition of the farmer. However, no data were collected concerning how products are marketed. Thus, it is possible, for example, to know the milk volume produced in a particular region or municipality, the sales volume from milk, and the technology used in production. However, agricultural censuses do not generate information that indicates how the milk was sold. Therefore, territories with great economic dynamics are invisible to the public authorities.

The geographic outline of this study is the state of Goiás, located in the central region of Brazil. Goiás is a state that has incentives from the national government for the production of large-scale commodity crops such as soy, corn, cotton, and sugarcane, as well as for dairy and beef cattle raising. All of these farming systems are capitalist [32]. However, family farming is also a relevant segment within the state, and is responsible for 38% of the gross agricultural value production (IBGE, 2017). Therefore, we decided to investigate the importance of long marketing supply chains in developing family farming in the state of Goiás.

Discussions were initially held with researchers in the field of rural studies to define the profile of the survey respondents. We defined that they should be figures who worked with family farmers in the municipalities. After informal conversations with family farming leaders, we concluded that the Goiás Agency for Technical Assistance, Rural Extension and Agricultural Research of Goiás (EMATER/GO) would be an institution with the capillarity and the ability to gather information regarding the marketing processes of family farmers in the 246 municipalities in the state. Thus, through a partnership between *EMATER* and the Graduate Program in Agribusiness at the Federal University of Goiás (PPGAGRO-UFG), an action plan was designed to collect data on the marketing practiced by family farmers in the state of Goiás.

Meetings were initially held between the research team and the directing board of EMATER to show the relevance of the research in the context of rural development in the region. Then, we held meetings with the coordinators of each EMATER regional office. Such meetings were fundamental to identifying the different types of marketing channels in the municipalities. Accordingly, the regional coordinators categorized each channel as short or long. During this process, a survey was developed with contributions from EMATER regional coordinators and the board of directors, and then sent to field technicians at the EMATER Local Units (LU). The regional coordinators held training meetings with technicians from the local units to categorize the marketing channels available to family farmers.

We instructed the LU technicians to identify the family farmers' leaders from each of the commercialization channels in each municipality. Thus, the responses to the survey for each municipality were collectively constructed from the communication between the LU technicians and the key informants of each sales channel.

We e-mailed the survey to LU technicians via the Google Forms platform. We divided the survey into two sections: (1) long marketing channels available to family farmers in the municipality, and (2) short marketing channels available to family farmers in the municipality. The most frequent long and short channels in the state were listed, and respondents answered two questions for each channel: (1) whether or not family farmers participated in the channel, and (2) how many family farmers participated in the channel. We obtained a response from 155 of the 246 municipalities in Goiás. Among the 155 municipalities that sent the completed survey, we selected 75 to respond to the second survey referring to the economic performance of each sales channel. Of these 75 municipalities, only 58 responded. In this economic performance survey, we made just one question per marketing channel: how many Brazilian reals (gross income) does the set of family farmers in the municipality participating in the channel receive per month? In turn, the sum of the income obtained by the set of family farmers sampled in each channel was obtained with the data obtained from this question. The sums obtained by sales in all short and long channels were considered the income universe (100%). Therefore, this percentage variable was called productive income from each channel, which expresses the share of income obtained in each channel compared to the total income obtained in all channels.

Next, the research step obtained data referring to the presence of marketing channels and family farmers' participation from 63.01% of the municipalities in Goiás. Economic performance data of the marketing channels were obtained from 37.41% of the sampled municipalities, representing 23.57% of the municipalities in Goiás. We used the number of rural family households obtained in the 2017 Agricultural Census of the Brazilian Institute of Geography and Statistics (IBGE) as the universe in each municipality. Many farmers participated in more than one marketing channel, making it impossible to gather information regarding the number of family farmers participating in long channels. For this reason, the "number of long-channel marketing posts occupied by family farmers in each municipality" variable was created, which we calculated through the sum of the number of family farmers participating in each long channel modality in the municipality.

We collected the data between August 2020 and March 2021. We also used some strategies to ensure the quality of the data collected by LU technicians. After receiving the completed forms, calls were made to each of the LU technicians to check whether the data entered was faithful to the municipality's reality. During the calls, it was possible to assess whether local technicians had understood the research concepts properly. We did not consider the filled-in forms by technicians who did not understand the concepts. During the calls, it was also possible to understand if some outliers represented the reality of the municipality or if their data were collected in the wrong way, and therefore should not be included in the final database.

We completed the data processing as follows: we initially analyzed the municipalities regarding the diversity of marketing channels and family farmers' participation in each channel. Then, the marketing channels were analyzed, with their occurrence in the municipalities of Goiás and the participation of family farmers. In this study, we used means, deviations, and standard errors to measure some variables.

We also used the Qgis platform to prepare a map specializing in the number of long channels present in each municipality. We elaborated the maps using data collected during the study and information from the State Geoinformation System of the State Government of Goiás (SIEG).

The methods and tools mentioned allowed us to answer questions on the participation of family farmers in each of the commodity supply chains available in the Brazilian state of Goiás.

#### **4. Results**

#### *4.1. Geographical Distribution and Diversity of Long Marketing Channels Available to Family Farmers*

There is little diversity of long marketing channels available to family farmers in the sampled municipalities. Few municipalities had more than five channels, as shown in Figure 1. Southeast Goiás was the region with the most significant number of municipalities with many long channels. The central region of the state (around the capital Goiânia), the southwest region, and the region around the Federal District also had some municipalities with many long channels. The north and northeast of Goiás had few municipalities with many long channels.

**Figure 1.** Map of the number of long marketing channels available to family farmers in Goiás.

The average number of long marketing channels available to family farmers, and an average number of marketing posts of the long channel-type available to family farmers, was low compared to the average number of rural family establishments in the sampled municipalities (Table 1).


**Table 1.** Mean, standard deviation, and standard error of the quantities of long canals, commercialization posts, and rural family establishments in the sampled municipalities.

Source: Data collected in the study and IBGE, 2017.

Regarding the diversity of long commercial channel modalities existing in the municipalities of Goiás and the participation of family farmers in the channels, it was noticed that: (1) there are on average 2.95 long channels available to family farmers in each municipality; (2) there are on average 195.94 long marketing posts occupied by family farmers in each municipality; (3) in total there are 30,371 long-term commercialization posts occupied by family farmers in the sampled municipalities; and (4) the ratio between long-term

commercialization posts and the number of rural family establishments is 42.47%. It should be noted that 42.47% of family farmers cannot be said to be part of long channels, as many participate in more than one marketing channel.

Figures 2 and 3 show the geographic distribution of the different long marketing channels existing in Goiás with family farmers' participation. There is a certain similarity between the maps of the channels for sales of milk to dairies and sales of cattle to slaughterhouses. The sales channel to agricultural market hubs was concentrated around Goiânia and around the Federal District. The sales channel to large supermarket chains was only presented in the horizontal strip located in the state's central portion of the southern region. The sales channel of agricultural commodities proved to be recurrent throughout the central–southern portion of the state and in part of the north and northeast of Goiás. Sales of extractive products from the Cerrado to middlemen were more recurrent in the state's north, northeast, and central–west regions. The presence of other long sale channels did not show a clear trend.

**Figure 2.** Presence of long sales channels with family farmers' participation (sale of milk to dairies, sale of cattle to slaughterhouses, sales to agricultural market hubs, and sales to large supermarket chains).

**Figure 3.** Presence of long sales channels with family farmers' participation (sale of agricultural commodities, sales in integration systems, sales of extractive products to middlemen, and sales in other long channels).

#### *4.2. Participation of Family Farmers in Different Long Channels*

Table 2 reveals a more significant share of family farmers in the long sales channel for the sale of milk to dairies and a small share in the sales channels of agricultural commodities and sales in integration systems.

The most recurrent channels in the municipalities and with the highest inclusion rate of family farmers are sales of milk to dairies, which occur in 92.21% of the municipalities and include 27.58% of family farmers, and sales of cattle to slaughterhouses or middlemen, which occur in 77.40% of the municipalities and include 11.79% of family farmers. The least recurrent long channels with the lowest inclusion index are sales to large supermarket chains, which occur in 7.33% of the municipalities and include 0.11% of family farmers, and the integration systems in 10.96% of municipalities, including 0.23% of family farmers. Furthermore, except for the channel for selling milk to dairies, the data revealed that the long marketing channels in Goiás are not very capable of promoting the productive inclusion of family farmers and not very capable of promoting such farmers in the agri-food systems of the studied municipalities.


**Table 2.** Participation of family farmers and occurrence of long marketing channels in the municipalities of Goiás.

#### *4.3. Economic Relevance of Long Channels to the Group of Family Farmers*

Regarding the economic performance of the different commercialization channels (Figure 4), the data revealed that: (1) the set of long channels is responsible for 75.35% of the gross income arising from the productive activities of family farmers; and (2) the long channels with the greatest economic weight were sales of milk to dairies and sales of cattle to slaughterhouses and middlemen, respectively, representing 33.30% and 21.15% of gross revenues from the productive activities of the group of family farmers sampled. It is also noted in Figure 4 that the short sales channels represent almost 25% of the productive income of family farmers in Goiás.

**Figure 4.** Participation of different marketing channels in the gross productive income of family farmers.

In analyzing Table 2 and Figure 4 together, we can see that although the sales channel in integration systems demonstrates specific economic relevance (representing 10.29% of the income of the sampled family farmers) and spatial relevance (occurring in 16 of the 155 municipalities sampled—10.96%), only 0.23% of family farmers participate in this type of commercialization. In other words, it is a channel that generates significant income, but only for a few farmers.

The long sales channel for commodities showed little economic relevance, representing only 2.75% of the productive income of the sampled family farmers, with low participation of farmers (4.15%), and significant occurrence in municipalities being present in 35.53% of the municipalities sampled.

#### **5. Discussion**

Few municipalities sampled had more than three types of long marketing channels with family farmers' participation. This is due to two reasons: first, the success and sustainability of these farmers' participation in these channels over time depend on chain coordination and state support [30]. The coordination and governance of long chains take place vertically, meaning without the participation of all actors. In addition, state support for family farmers in Brazil occurs intermittently, varying according to the managers who assume the municipal, state, and federal public powers. These factors make the participation of family farmers subject to specific realities. Another possible reason for the low diversity of long channels is the precarious infrastructure conditions of the municipalities. The operations of these channels largely depend on a configuration that facilitates logistical aspects of the production, distribution, and consumption processes.

Large agri-food chains force participating family farmers to specialize their production and reduce their productive diversity [29]. Due to the small scale of family-based production, their relevance in long channels is minor, meaning they are not protagonists in these exchange processes. The search for recognizing family farmers as a category and social group in society involves their participation in markets capable of explaining their specificities and potentials [18].

The discourse of dairy aptitude in Goiás as something consolidated and indisputable is striking in several meetings, events, and actions with agents of public power and organized civil society. However, such discourse does not usually go beyond the issue of fresh milk. When discussing municipal inspection systems, agro-industrialization, and milk processing, the main difficulty for family farmers is perceived as operationalizing the milk chain so that the family farmer is not a mere milk supplier to large dairies. A factor that corroborates this hypothesis is the low occurrence of special cheeses with specific characteristics of the territories (only Cabacinha cheese in the Parque das Emas territory) and the shallow index of municipalities with the Municipal Inspection System in operation.

The long channel with the greatest occurrence in the municipalities and the greatest participation of family farmers was the sale of milk to dairies. However, even though it is the channel with the greatest participation, there was a lower rate than expected (27.8% of family farmers in the sampled municipalities), since the state's great dairy aptitude is a culturally well-established attribute in Goiana. These data support several hypotheses: the first is that many family farmers are inserted into the milk chain, but few are inserted into the long sales channel of selling milk to dairies, meaning there is a lot of milk production being sold and consumed, but it remains invisible. Another factor that may explain this fact is that the modality of selling milk to dairy products promotes an impersonalization of products produced by family farmers [29], which, together with the high production costs and the low earnings of the activity [7], economically and culturally discourages family farmers from selling their products through this channel.

A significant portion of municipalities have family farmers selling their products to middlemen, with 41.72% to intermediaries who resell in agricultural market hubs, and 32% to intermediaries who buy and resell fruits and products from the Cerrado. This demonstrates the importance of this agent in the agri-food systems of municipalities, especially those that are not close to urban consumer centers. Such intermediaries play a relevant role in the supply of municipalities and significantly interfere in food dynamics. They supply municipalities with products from agricultural market hubs and supply agricultural market hubs with products from municipalities. To a certain extent, this practice hinders the consolidation of alternative food networks and the construction short marketing channels, enabling the productive inclusion of farmers who do not have a commercial profile.

However, these marketing channels occur more frequently in municipalities located on the margins of major state and federal highways, restricting the participation of farmers from more remote municipalities. Although they occur in many municipalities, long channels centered on the figure of the middleman present a very low participation of family farmers, demonstrating the need for the productive specialization of farmers and an improvement in the coordination of chains [31].

Among those investigated, the two long channels that attracted the most attention about family farmers' participation were the sales of agricultural commodities and sales in integration systems. Family farmers' participation in these channels was greatly encouraged through public policies. In recent years (2017 and 2018), 40% of the funding resources allocated to the National Program for Strengthening Family Agriculture (*PRONAF*) were allocated to financing soybean crops [1]. Another great public power incentive for the insertion of family farmers in long channels was the Biodiesel Social Seal, which encouraged many farmers to start planting soybeans [24]. In other words, the contribution of public resources and the incentive by the state to insert family farmers in these channels did not necessarily generate a greater inclusion of farmers.

Family farmers' participation in these long marketing channels, which force intense production specialization and decrease the diversity of agroecosystems in family units, generates intense socio-territorial transformations and other negative impacts [1,27]. The data from this study revealed that these impacts, already discussed in the literature, are not compensated by the production of significant income for the group of family farmers.

Only 3.64% of the productive income of the sampled family farmers comes from participation in agricultural commodity chains, meaning that it is a channel that generates little income for the category. Moreover, in addition to generating little income for local family farmers, it mostly moves the economy of transnational companies downstream and upstream of production [19,20]. In other words, the long channels with greater support from the state and greater political appeal (under the discourse of efficiency, productivity, and income generation) were those with the lowest economic participation in the productive income of the group of sampled family farmers.

The data revealed that short sales channels, even in a state markedly hegemonized by large-scale production [32], are relevant for the economic reproduction of family farmers. The set of short channels accounted for 24.65% of the productive income of the group of sampled family farmers, and the set of long channels accounted for 75.35%. This data supports the hypothesis of coexistence between long and short sales channels. In some moments, they feed back and converge, and in others, they dispute and diverge [9].

Family farming and agribusiness are not antitheses [10], but there is a great diversity of social, environmental, and productive conditions that interfere with the performance of family farmers in the marketing channels [14]. For a portion of family farmers, who have more technical ability and greater competitive attributes, long channels are a possibility [2]. Nevertheless, agribusiness and agro-industrial chains are not open to participation for a much larger portion of family farmers. The cited studies discuss the reasons for not inserting a portion of this category and some impacts that such insertion can cause. On the other hand, the results of this research quantitatively reveal the inability of agribusiness agro-industrial chains to include and generate income in a significant way for family farmers. The results also reveal that short channels are configured as a potential alternative for inclusion and income generation for family farmers excluded from long channels.

#### **6. Conclusions**

This study presents empirical evidence of the heterogeneity of food supply chains that are better suited to family farmers, and how this affects farmers' capacity to market their agricultural goods. Agribusiness long marketing channels are different from those expected by initiatives promoting commodities as a solution for the development of rural communities, as they provide limited opportunities for family farmers to market their goods.

A large part of the sampled municipalities had less than three types of long marketing channels in which family farmers could participate, and only a small portion of the municipalities had more than five long marketing channels, revealing few options for family farmers to outflow production via long channels. The sale of commodities occurred in 35% of the municipalities, 4.15% included local family farmers, accounting for 2.13% of the sampled farmers' income from farming activities.

The only long marketing channels with a large participation of family farmers were the sale of milk to the dairy industry and the sale of cattle to slaughterhouses, or middlemen. All other agribusiness long channels proved to be fairly closed to the participation of family-based farmers, with a participation rate ranging from 0.11% to 4.15%.

Despite being present in 35.53% of the municipalities in the state of Goiás, the commodity long marketing channels were relevant to only 2.75% of the sampled family farmers. The sales channel in integration systems showed greater economic participation, but with a reduced number of participating family farmers, revealing a concentration in the long marketing channels.

As a whole, long channels are hardly capable of including a large portion of family farmers and are responsible for a low percentage of farming income for these farmers. These findings reveal the need to explore the possibilities of non-commodity goods in short food supply chains, in which farmers market directly to consumers as a complementary development approach. An important starting point for this effort is to recognize the heterogeneity of food supply chain arrangements (including both long and short supply chains) in terms of opportunities for family farmers to market their agricultural goods.

This study focused on quantifying the participation of family farmers in commodity supply chains and the economic relevance of such channels for family farmers' income. Causal relationships that explain the level of family farmers' participation in each type of long channel were not established in this research, which is a possible agenda for future studies. Another challenge for future research is to quantify the capacity that short food supply chains have to include family farmers and generate income for these farmers.

**Author Contributions:** Conceptualization, T.d.C.V.; methodology, T.d.C.V.; investigation, T.d.C.V.; data curation, T.d.C.V.; analyses and draft preparation, T.d.C.V.; writing—review and editing, T.d.C.V.; literature review, T.d.C.V.; methodology, G.d.S.M.; data curation, G.d.S.M.; writing—review and editing, G.d.S.M.; literature review, G.d.S.M.; methodology, J.R.d.O.J.; data curation, J.R.d.O.J.; writing—review and editing, J.R.d.O.J.; literature review, J.R.d.O.J. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** The study was conducted according to the guidelines of the Declaration of Helsinki, and approved by the Institutional Review Board of Goiás Federal University—UFG (protocol number 2.718.246, date of approval 18 June 2018).

**Informed Consent Statement:** Informed consent was obtained from all subjects involved in the study.

**Data Availability Statement:** Data presented in this study are available upon request to the author for correspondence. The data are not publicly available yet, as they will be used in future studies that will be submitted to journals that require originality.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **References**


### *Article* **The Logic of Collective Action for Rural Warehouse Condominiums**

**Amanda Cristina Gaban Filippi 1,2,\*, Patricia Guarnieri 1, Cleyzer Adrian da Cunha <sup>2</sup> and Alcido Elenor Wander 2,3**


**Abstract:** *Background:* Given several bottlenecks in Brazil in distribution logistics, mainly in transport and warehouse activities, some new forms of collective action have appeared. The Condominiums of Rural Warehouses was conceived of to overcome these bottlenecks and provide better income and competitiveness to small producers in agribusiness. This article aims to analyse aspects of collective action with the focus of Rural Condominiums in the context of Brazilian agribusiness. *Methods:* We conducted exploratory, descriptive and qualitative research under the Theory of Logic of Collective Action lens for this purpose. Besides conducting a literature review, we conducted a semi-structured interview with the managers of the Rural Warehouse Condominiums. We analysed the data through a Categorial Content Analysis. *Results:* The main results show an approximation of the rural model of the Condominiums of Rural Warehouses with the Theory of Logic of Collective Action, mainly for small producers. *Conclusions:* We highlight the feasibility of the warehouse structure collectively, as it strengthens and provides greater efficiency to rural business and producers, inserts and integrates the industry into a competitive market environment, provides economic and social benefits, leads to cost reduction, and increased profit. The economic, social and logistical determinants show the product's commercialisation, logistical gains, and the producers' association regarding the development and growth of rural collective action. This paper can be helpful for practitioners and researchers interested in this field.

**Keywords:** collective action theory of logic; collective actions; rural warehouse condominiums

#### **1. Introduction**

Agriculture is subject to constant economic, social, political, and technological changes. Many of these changes arise to solve problems in the field of agribusiness, to increase the profitability of the system and its competitiveness, and to reduce costs. In this context, agriculture starts to be perceived in a systemic way, with the agricultural business, through relationships intertwined in a complex system of activities and participants, called agribusiness [1,2].

In Brazil, agribusiness accounts for about 43.2% of the country's total exports, providing economic growth, development, and competitiveness [3]. Despite the great representativeness and importance, Brazilian agribusiness faces some difficulties, problems and risks in terms of rural activity [4–7]. The worldwide growing demand for Brazilian commodities, driven by countries with large populations such as China [8], at the same time creates opportunities for Brazilian farmers in emerging markets [9] and challenges them to overcome the logistic obstacles.

Among these obstacles and particularities are: (i) the bottlenecks caused by inefficient and inadequate distribution logistics and infrastructure problems [10–14]; (ii) exclusion and social conflicts [15]; (iii) numerous, small, poorly organised, distributed and distant rural producers throughout the territory [2]; (iv) production seasonality [2,16]; (v) perishability

**Citation:** Filippi, A.C.G.; Guarnieri, P.; da Cunha, C.A.; Wander, A.E. The Logic of Collective Action for Rural Warehouse Condominiums. *Logistics* **2022**, *6*, 9. https://doi.org/10.3390/ logistics6010009

Academic Editor: Robert Handfield

Received: 11 November 2021 Accepted: 14 January 2022 Published: 20 January 2022

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

of agricultural products [2]; (vi) weather, pests and diseases; variations in supply and demand; and (vii) difficult price and production predictability [16].

Given this, Rural Collective Actions present themselves to face and circumvent the difficulties and particularities of the agricultural business and to achieve gains and advantages. Rural collective action can: (i) promote social, technological and innovative development; (ii) add value and create wealth [17–24]; (iii) assist in decision making; (iv) maximise the profit of associates and provision of goods or services [25]; (v) is more efficient than disorganised individual actions [26]; (vi) generate the dilution of activity costs [27,28]; (vii) assist in the commercialisation of and access to production resources for small farmers, provide technical assistance to members, access to market information, and provide an advantage with transport and storage [29]; and (viii) provide a market advantage in the commercialisation of production [30].

Thus, different models of Rural Collective Actions emerge [8,9,22,29–31], and each type of model has its characteristics and specificities. The variation may be due to the forms of association, size, incentives adopted [25,26], or dynamic nature [32], and it is essential to understand the reasons for the variability between the different forms of Collective Actions [32,33].

Specifically, in this study, the collective actions are formed by social actors or groups that act as a collective [17,19], who can use experience for guidance, understanding, and set rules for actors participating in the action [19], by considering common goals [26]. These joint actions attempt to constitute a collective good, more or less formalised and institutionalised, through people who aim to achieve common goals through cooperation and competition with other collectives [19].

Thus, the objective of this study is to investigate the emerging form of collective action of Condominiums of Rural Warehouses [22,31] under the lens of the Theory of Logic of Collective Action proposed by Mancur Olson (1965). In the context of rural collective actions, the inefficient distribution logistics and the shortage of warehouses in the country are the primary motivations for this study.

Mainly, this study empirically evidences collective actions and those social actors and/or rural producer groups that present themselves as collective subjects. It also provides evidence and criteria to guide, understand, and govern actions based on shared objectives. Thus, for the participants of this study, the joint effort is an attempt to constitute a collective good, more or less formalised and institutionalised, with people who seek to achieve common goals through cooperation and competition with other groups in distinct collective actions.

The Condominiums of Rural Warehouses is a unique collective action model in Brazil, which does not fit the characteristics of other forms of collective action. Usually, the problems of cooperation and free-riding arise in managing collective resources. The new model of rural collective actions, with an associative and cooperative character formed by neighbouring farmers, minimises the two previous problems. Rural producers collectively contribute financial and physical resources. Then, after constructing the warehouse, they share the structure by dividing them into storage quotas. This structure of shared financial quotas makes it possible to reduce the warehouse deficit and other logistical bottlenecks, mainly related to transportation. Besides that, co-producers reduce unnecessary costs, trade production without intermediaries and obtain advantages from the condominium and storage system [11,27,28,31,34]. The paper shows that this collective rural warehouse management model succeeds because it follows the theoretical model of Olson's Collective Action Logic. Literature on the subject is still scarce, and no study has, as of yet, analysed Brazil's issue. Finally, Olson's Collective Action Logic Theory explains the new rural management model related to the condominiums of rural warehouses.

#### **2. Theory of Logic of Collective Action**

Mancur Olson was an American economist and social scientist who studied social and political phenomena from economic models. "The Logic of Collective Action—Public Goods and the Theory of Groups" from 1965 stands out among his famous works. For Olson, the logic of collective action is based on the main idea that when there are common economic interests, individuals will come together to achieve common goals [26] jointly.

In addition, common economic objectives are realised with greater strength and effectiveness through collective action and by promoting members' interests [26]. Collective actions are social interactions driven by collective goals, which generate joint actions to achieve them [35].

For Maeda and Saes [36], the logic of collective action occurs when economic agents, under cooperation, seek to maximise their satisfaction. The gain from collective action must be higher than that of an individual effort. In addition, the authors describe that the success of collective action has other factors, such as the size of the group. According to the authors, small groups present more satisfactory results for members, thanks to the ease of control and agility of actions.

Wenningkamp and Schmidt [24] explain that the interests that Collective Action promotes must be attractive to all members, that is, members should share common interests. Collective actions aim to combine efforts through the joint action of individuals to achieve common goals [24].

According to Olson [26], smaller groups tend to achieve a collective benefit more easily and promote individual interest in the collaborative form. The larger the group, the more likely it is that the individual will reach the optimum goal of obtaining the collective benefit. Furthermore, the less likely he is to act to obtain even a minimal amount of that benefit. In short, the larger the group, the less it will promote its common interests [37].

Thus, smaller groups have more advantages than large groups [26]. According to the author, this is explained by small groups' cohesion and greater efficiency and their social incentives and rational behaviour.

Smaller groups have greater strength of cohesion and efficiency, as individual efforts will influence the final results more so that individuals will contribute more to obtain or improve the benefits. If the group is larger, the strength of cohesion and efficiency of each participant will decrease, and the individual effort or contribution will not have much effect on the larger group [37]. Because of these reasons, Olson reports that large organisations often seek subdivisions within the overarching organisation, creating small leadership groups in the form of committees and subcommittees.

In addition, economic incentives are not the only motivators for collective action. People are also driven by the "desire for prestige, respect, friendship and other social and psychological objectives" [37]. These social incentives also work best in small groups, as people have greater proximity and knowledge between them. This proximity influences the individual to perform his duty or social role in collective action and to value his "friend", social status, personal reputation, and self-esteem. Thus, small groups are favoured in two ways, first by economic incentives and second by social incentives [26].

Maeda and Saes [36] identified similar economic and social incentives characteristics during a Brazilian Rural Collective Action study. Economic incentives include economies of scale, increased bargaining power and dilution risk. As for the social incentives, the desire for prestige, respect, friendship and other social and psychological factors also appeared. It is worth mentioning that the economic incentives prevailed over the social ones in this study. The economic gain with the action is the main factor in maintaining the rural group [36].

Moreover, Olson discusses the famous free-riders, when an individual group is favoured within the structure without contributing to the overall gain. In the study by Maeda and Saes [36], they found that the occurrence of the free-rider is inhibited by the small group size and social incentive. Thus, the social pressure on the small rural group leads all members to comply and participate in actions to achieve collective benefit.

Wenningkamp and Schmidt [38] found economic and social incentives to act collectively and environmental, cultural, and political motivations. For example, we can emphasise waste management and preservation of the environment, power in influencing decisions, commercialisation with the collective model, and recognition and rights in legal/political matters.

Olson [37] briefly describes groups fighting for legislation favourable to their members, specifically for Rural Collective Actions. This is currently the case in Brazil, with large rural organisations, as an example of the strength of the ruralist bench, which has the power to influence politicians in Congress, the Organization of Cooperatives of Brazil (OCB), Brasilia, Brazil, or the National Confederation of Agriculture (CNA), Brasilia, Brazil, which exercise power over Brazilian cooperatives and agribusiness. However, it is not just for this reason that Brazilian Rural Collective Actions fight, motivate or structure themselves.

Iglécias [23] and Ribeiro, Andion and Burigo [20] discuss some historical aspects that influenced these changes. Iglécias [23], in a study on the forms of collective actions and political articulation in Brazilian agribusiness, reports that Brazilian rural collective actions have been transforming since the late 1980s and early 1990s, due to a greater integration of the Brazilian economy with the world economy. Due to this reason, the country became more exposed to international competition, and as a result, farmers strengthened their positions through collective action. Ribeiro, Andion and Burigo [20] state that from the 1980s, structural and socio-political changes began to occur in Brazilian agribusiness due to the re-democratization of the country and the promulgation of the 1988 Federal Constitution. Such changes passed more power to states and municipalities, increasing participation of society in the economy and politics and discussing such issues as social inequalities and preservation of the environment.

Olson's theory approximates the new Brazilian Rural Collective Action model, called the Condominiums of Rural Warehouses. There is a shortage of warehouses for storing grain after harvesting in Brazil. Investments in storage are high and require a high level of financial resources. Farmers, after harvest, sell the harvest at the day's prices so as not to incur losses. It would be possible to store the crop and to sell the produce at a later time. Given the supply risks in substantial crop failures and losses, the lack of grain warehouses is a food security problem. Thus, the Condominiums of Rural warehouse condominiums have emerged as a collective model to solve the problem. However, in collective resources, there is a free-rider problem. We discuss the model of the Rural warehouses condominiums in the following sections.

#### **3. Materials and Methods**

We carried out an applied, exploratory, descriptive and qualitative study. Besides conducting a literature review to gather the main variables related to the phenomenon studied, we conducted a case study associated with the Condominiums of Rural Warehouses. We conducted semi-structured interviews with the managers/owners of Condominiums of Rural Warehouses to collect data. We analysed the results through a Categorial Content Analysis under the Theory of Logic of Collective Action by Mancur Olson, also analyzing the results in relation to some studies related to the topic [22,27,28,31].

In related studies, such as a project supported by the Foundation of Support of Research of Distrito Federal—FAP-DF, Brasilia, Brazil [11], the authors did not find any geographic record of the collective action model Condominiums of Rural Warehouses in Brazil. The leading Brazilian associations related to warehouses also were not aware of Condominium of Rural Warehouses, except those existing in Parana and Rio Grande do Sul, Brazil, which were the subject of our study [11]. Thus, the interviews were conducted by considering the representativeness of the existing condominiums obtained by documental analysis, mainly via the Internet and by phone, located in the States of Parana and Rio Grande do Sul, Brazil. The choice of the study participants was made following the criteria of convenience sampling and accessibility. Prior contact was made by telephone, and the best day and time was scheduled, and the interviews were conducted in person. Condominiums of Rural Warehouses are disseminated by people who know the model and some reports are available on the Internet. When we interviewed the managers of

the existing condominiums of Rural Warehouses in Parana and Rio Grande do Sul States, Brazil, we asked if they knew of other condominiums.

We carried out seven interviews in loco with the managers/owners of the Condominiums of Rural Warehouses in the municipalities of Palotina (C, E, F and G), Mercedes (B) and Francisco Alves (D) in the State of Paraná, and Ipiranga do Sul (A) in the State of Rio Grande do Sul, in Brazil. There is a greater concentration of this type of Collective Action in these municipalities.

We recognise that the choice of the participants of the study is a limitation of this paper; however, considering the difficulty in Brazil to have responses from questionnaires sent by e-mail [11], the accessibility criteria had proven to be the more adequate in this case, considering the qualitative approach of our study. The results from the project's final report supported by FAP-DF, Brasilia, Brazil, were also considered for the data collection and for accessing the study participants. We analysed the data through the lines and cluster meanings of texts through the categorical content analysis [39]. The questionnaire was derived from the seminal works by Filippi [27] and Olson [26].

Finally, the selection of participants occurred through a pre-selection criterion that inhibited selection and information biases. The interviews were conducted impartially according to the questionnaire, were recorded and the interviewees' testimonies were used to discuss the results.

In this sense, the Content Analysis had three stages: (i) pre-analysis; (ii) exploration of the material; and (iii) treatment, inference and interpretation (Figure 1) [39].


**Figure 1.** Applied Content Analysis.

Pre-analysis is the material organisation stage, a careful and organisational phase, which aimed: (i) the choice of documents on the topic of Condominiums of Rural Warehouses, for which literature on the subject is restricted; (ii) formulation of hypotheses and objectives, which is based on the Theory of the Logic of Collective Action for Condominium of Rural Warehouses and, (iii) elaboration of indicators and creation of semi-structured interview script to conduct the interviews with managers/owners. The exploration of the material aims to manage decisions through coding, discounting systematically or enumeration operations. In this second phase, the text of the interviews or documents is set into smaller units, with later categorisation. The categorisation is an operation that aims to classify common elements in sets, done before (*a priori*) or after (a posteriori) data collection [39].

The smaller units were the context of Condominiums of Rural Warehouse gathered from documents and primary data obtained with in loco interviews.

This study conducted categorisation after field research (a posteriori), elaborated on after the interviews. The categories proposed are (1) Collective Action Model of Condominiums of Rural Warehouses; (2) Rural Collective Actions; (3) Economic and Social Incentives for Condominiums of Rural Warehouses; (4) Small Groups and Large Groups; (5) Determining Factors of Condominiums of Rural Warehouses; and (6) Perspectives of Condominiums of Rural Warehouses. Finally, the last step was the treatment of the results and the presentation and discussion of the data.

The last stage of content analysis comprised the treatment of results, inference and interpretation of data through qualitative analysis, including the transcription of primary data interviews, analysis of documents provided by condominiums of rural warehouses, and a discussion of the results in light of the theory of Collective Actions.

Moreover, we triangulate data to compare results from different instruments of data collection (interviews, observation, documents and theory) and the opinions of the other managers/owners of the condominiums of rural warehouses. Among the advantages of triangulation is the establishment of truth, improvement of theories, confidence, accuracy, quality, elimination of bias [40] and more robust contributions [41]. We present the results in the following section.

It is noteworthy that there is still no national registry of Condominiums of Rural Warehouses. Thus, the sampling took place for accessibility and convenience. In Brazil, a national registry shows the warehouse units in the territory. Such registration is conducted by the Brazilian government's National Supply Company (CONAB), Brasilia, Brazil. However, CONAB's registration differs between cooperative, private or official warehouse units. There is still no specific survey or classification regarding Condominiums of Rural Warehouses.

We found that the knowledge on Condominiums of Rural Warehouses in Brazil is still insufficient, considering the perceptions of some entities, producers or associations dealing with agribusiness and warehousing. The data from "Project financed by the Foundation of Support to Research in Distrito Federal, Brasilia, Brazil (FAP-DF) carried out between 2017 and 2019 in the Distrito Federal and surroundings corroborated this information. This model of collective action is best known in the Southern Region of Brazil, and more specifically in the city of Palotina, in the State of Paraná. Based on television reports or informal contact, some farmers or entities seek information in the area of Palotina or scientific publications.

In the case of the Brazilian Agriculture Confederation (CNA), Brasilia, Brazil, an entity representing rural producers in the country conducted a meeting to present the Condominiums of Rural Warehouses model, by researchers from universities to 27 representatives of Farmers' Federations in the 1st half of 2019. The representatives were optimistic about the model and became aware of the new Brazilian Rural Collective Action model.

Furthermore, we found that the Ministry of Agriculture, Livestock and Supply of Brazil (MAPA) and the Technical Assistance and Rural Extension Company (EMATER headquarters, located in Brasilia, Distrito Federal, Brazil), were not aware of the topic. It is essential to point out that the Condominiums of Rural Warehouses model is relatively new. There is insufficient knowledge about the country's territorial extension and a poor dissemination of information among producers, entities, researchers, and the government. Thus, the model is better known in the country's Southern Region. From 2016 to 2019, in Palotina, Paraná, Brazil, a further three Condominiums of Rural Warehouses were built, totaling six in Paraná by 2019. Thus, this study considered seven Condominiums of Rural Warehouses known in the country: (a) Warehouse Condominium "A" in the city of Ipiranga do Sul, Rio Grande do Sul; (b) Warehouse Condominium "B" in the city of Mercedes, Paraná; (c) Warehouse Condominium "C", "E", "F" and "G" in the city of Palotina, Paraná; and (d) Warehouse Condominium "D" in the city of Francisco Alves, Paraná.

#### **4. Results and Discussion**

*4.1. Model of Collective Action Rural Warehouse Condominium*

The first category aims to present the collective action model of the Rural Warehouse Condominium.

The collective action of the Rural Warehouse Condominium is an association of farmers that share the same objective, storage. In the specific case, the model aims to store grain production in warehouses, shared among all partnering farmers and divided into storage quotas through internal regulations and a set of rules (statute). In addition, the partner farmers own the unit, which comprises the storage units (Metal Silos) and the administrative building, reception and scale, warehouses (hoppers, cleaning machines, dryer, tipper, furnace, etc.), and another small area available. The whole complex is the Rural Warehouse Condominium in approximately 6 hectares.

Initially, the Condominium assumes that farmers alone cannot make the Warehouse financially viable. Additionally, when they come together collectively, the viability of the Warehouse becomes possible since the costs are shared among all partners.

Olson [26] reports that the formation of groups begins with a common and primary purpose, in this case, the collective storage structure for the Warehouse Condominiums. In addition, the creation of the Condominium corroborates the economic objectives that can be realised with greater strength and effectiveness through collective action.

The model achieves other common goals by collectively making the storage structure viable. Obtaining more significant profit from the sale of the product, minimising costs, adding value to the product, strategic marketing of products, by reducing logistical bottlenecks, rural activity and commercialisation are other incentives for the formation of the collective group Rural Warehouse Condominium, which meet the economic objectives of the Theory of Logic of Collective Action. Table 1 exemplifies some of these statements.

**Table 1.** Interviewees' statements about the Condominiums of Rural Warehouses model.


It is worth mentioning that the strategic commercialisation of production is one of the main factors in creating the Rural Warehouse Condominium reported by the interviewees. When marketing their products without the Condominium, farmers reporting having had a reduced profit margin and were often forced to sell the product right after harvest since they did not have places to store their products. Thus, with an ample supply of the product on the market, usually during harvest periods, the prices of the products end up being lower than in the off-season due to supply and demand.

In addition, the price paid to the producer to deliver the product to third-party warehouses is less than that negotiated at the Condominium. The price received for the product through the Condominium is around 11 to 20% higher. In addition, the sale through the Condominium excludes middlemen. The deal is carried out directly with the buyer or trading company, and the profit increases for the farmer.

In addition, respondents noted the importance of the small number of farmers in each Condominium. Each condominium has around 8 to 24 farmers, with an average of 16 farmers for storage condominium and the productive area around 4500 hectares storage capacity revolving around 450,000 bags of 60 kg (27,000 tons).

As in the case of Condominiums of Rural Warehouses, small groups have more satisfactory results due to the ease of control, agility of actions, greater cohesion and greater efficiency, and achieving the collective benefit more quickly. Other aspects such as respect, friendship and characteristics of a social and psychological background are also incentives for collective action and the good functioning of Collective Action [37].

In addition, the existence of a small and restricted group is a determining factor for success for the Rural Warehouse Condominiums model. At the point of deciding to set up the Condominium, the farmers had already known each other, had confidence among themselves, and had similar profiles and ideas that contributed to the smooth running of the model's activities.

In this context, the small group must be well structured and organised, financially stable, and have prior knowledge and/or experiences in collective actions for the model's success.

Another vital characteristic of Condominiums is the profile of the farmers. Small and medium farms prevail in the Condominiums. It is worth explaining that the profile of farmers in Brazil is different, especially when comparing the South region and the Midwest region, the central grain-producing regions in the country.

The small and medium producers in the South region can vary between 100 to 300 hectares. The large farms are over 1000 hectares. In the Midwest region, small farms have at least 1000 hectares. Thus, the Southern region is characterised by farms with small agricultural areas. This characteristic is for forming a Condominium of Rural Warehouses, as a prominent owner of the Midwest region, in economic terms, can easily make his storage viable. However, in the South, this would not be possible.

This fact is reflected in the incentives for making the model viable. Still, it does not exclude other motivations, such as the social and economic ones that the model provides and will be discussed in the third category.

#### *4.2. Rural Collective Actions*

The second category reveals perceptions and characteristics regarding the different rural Brazilian collective actions.

Among the different Brazilian rural collective actions, the interviewees know the Associations, Cooperatives and Rural Warehouse Condominiums. As for the Cerealists, the interviewees know. However, it is not considered a rural collective action, as only one owner buys and sells grain.

Respondents also reported the prevalence of large Cooperatives in Palotina/Parana and Rural Associations, Brazil. There are fewer rural condominiums, with around six in Palotina/Parana and one in Ipiranga do Sul/Rio Grande do Sul, Brazil. Associative and cooperative culture is predominant in the country's Southern Region, which creates and develops collective actions.

As for the diversity of agricultural activities in Rural Condominiums, most interviewees know only about the storage segment. Interviewee A reported some form of a Swine Condominium in Salete, state of Rio Grande do Sul, Brazil, but that the Collective Action did not work due to administrative problems, and today it is private. Interviewee B reported knowledge of the Agroenergy Condominium in the municipality of Marechal Rondon, state of Parana, Brazil (Ajuricaba Condominium) and another Agroenergy Condominium that began recently in the municipality of Entre Rios do Oeste, state of Parana. Both transform pig waste into bioenergy through a biogas plant. In the literature, it is possible to notice recent studies with Condominiums of Agroenergy [42,43].

Slightly different from bioenergy production from swine manure, interviewee C reported building a Solar Energy Condominium to reduce the electricity costs of the Warehouse Condominium and supply the rural properties themselves.

In contrast, interviewee F commented on the idea of a Silage Condominium sharing Silage machines, which would reduce investment costs and bring greater efficiency to the production process. On the other hand, Interviewee E reported only hearing about a Milk Condominium in Mangueirinha, Parana, Brazil, which delivers the product to the Cooperative.

In the literature, it is possible to notice a diversity of Rural Condominiums. Noteworthy activities include agroenergy [42,43], logistics (warehouse) [11,22,27,28,31,34], coffeegrowing [44], dairy [45–49], and pig farming [47,50,51]. However, studies on the subject are still recent and few.

In addition, among the different rural collective actions, around 80 to 90% of the farmers in the Condominiums of Rural Warehouses participate in other models, such as Credit Cooperatives and Agroindustrial Cooperatives. There are cash loans (financing), purchase of inputs, and sale of products in these relationships.

We noted that rural producers need to associate themselves with collective rural action. Interviewees C and B added: "Now, not associating with anything is bullshit ... ", "rural collective actions for agribusiness are critical, there should be more", respectively. In the Theory of Logic of Collective Action, collective action is more efficient than disorganised individual action. Thus, the rural activity carried out collectively is more efficient to the processes and objectives of everybody.

Fonseca and Machado-da-Silva [52] and Garrido and Sehnem [4] also corroborate the importance of Collective Actions in competitive and fierce business environments to face competitive scenarios and the survival of institutions strategically.

For Saes [25], collective action achieves the individual interests of each person. The objectives are more easily achieved, and the associates' profit is maximised, goods or services are provided, the "rules of the game" are changed, and conflicts are resolved.

Thus, the interviewees' unanimously asserted the importance of collective rural actions for agribusiness and the whole production chain. We can highlight the security, aggregation of value to the product, generation of jobs, dilution of costs, a gain of scale, quality of food, marketing increase in profit and use of technologies as main advantages.

With this, interviewee E commented on the importance of farmers staying together because rural collective actions cannot be achieved if there is no union. Likewise, interviewee G said that soon he sees the formation of an Association between Condominiums of Rural Warehouses to ensure greater representativeness of the category and seek better financing conditions, such as lower interest rates, as different needs may arise.

In addition, for the rural producers of the Condominiums, the viability of the storage structure and the extra profit obtained from direct sales and strategic marketing were only possible thanks to the cooperative union of producers. "I was always very accountable and was not viable alone. I was going to have a high maintenance cost to play alone, and in this collective way, I think it went well" (interviewee B); " ... what changes are for the groups that make it up, who manage to have a slightly higher final gain in his currency, which is the grain" (interviewee A).

The "surplus" with the sale of the products (grains) directly to the market, without intermediaries in the transaction, and the possibility to sell the product at any time of the year, especially in the off-season when the price of the product is best, are the main benefits. This condition is possible considering the Condominium's capacity of storage.

In addition, the rural collective action models differ from each other. The Condominiums of Rural Warehouses differ from the other collective actions because it is driven to a smaller, non-business group, with a limited warehouse share, and less bureaucratic. Table 2 summarises the advantages of the Rural Warehouse Condominium model over other rural models.

**Table 2.** Interviewees' statements about the advantages of the collective rural model of Condominiums of Rural Warehouses compared to other types.


In addition, the difference between the Condominiums of Rural Warehouses and other Brazilian Rural Collective Actions is that the farmer owns his grains, since the warehouse is his and he can choose the best time to sell his product and product quality. Complementarily, the participants of condominiums of rural warehouses have greater decision-making power in meetings. Concerning their product, they also have the autonomy to decide when it will be sold and to whom, that is, they can negotiate better prices for it, as opposed to selling at over-the-counter prices offered in other rural collective actions without negotiation.

Decisions and management in smaller collective action models are also faster and more agile, as in Warehouse Condominiums. There are tax advantages over other models, as they are not companies; condominiums do not receive discounts.

Concerning the problems of agro-industrial logistics, such as deficits in warehouses and queues for loading and unloading, the Condominiums of Rural Warehouses avoid these problems. Considering that there are few partners in the Condominium, the flow of loading and unloading in the silos does not generate queues. In addition, each partner has their share of storage, so each producer knows the space available to store their products in the Condominium silos. Suppose space is lacking, depending on the crop years or increases in production. Farmers can use the quota of another partner. When the managers/owners of the Condominium decide it is possible to expand the storage capacity they can construct new silos.

#### *4.3. Economic and Social Incentives for Rural Warehouse Condominiums*

The third category discusses the role of Economic Incentives and Social Incentives in front of Rural Warehouse Condominiums, motivating bases for forming groups according to the Theory of Logic of Collective Action.

First, respondents almost unanimously agreed about Economic Incentives relating interest rates to warehouse financing (Table 3). When asked about the role of Economic Incentives in forming groups, we discussed two relations: Governmental economic incentives and market-based economic incentives.

**Table 3.** Interviewees' statements about the Economic Incentives of the rural collective model Condominiums of Rural Warehouses.


The governmental economic incentive applies because the Government restricts contributions with financial incentives to the collective action model of Condominiums of Rural

Warehouses. Mainly to incentive programs for the construction or expansion of Warehouses with competitive interest rates for small and medium rural producers.

Currently, the central government program available for Warehouses is the PCA— Program for the Construction and Expansion of Warehouses—with interest rates ranging from 6% to 7% per year, 6% for investments with a grain storage capacity of up to 6000 tons and 7% above that [53]. According to the interviewees, interest rates for farmers are high. They have risen over the last decade, mainly for small and medium farms, being a disincentive for structuring new Warehouse Condominiums and new construction of storage units in the country.

It is worth remembering that there is a storage deficit in the country and obsolete storage units that need modernisation. At a more favourable time, the lack of warehouse spaces still implies not enjoying storage benefits, such as product conservation and commercialisation.

In addition, we asked the interviewees about the non-knowledge about the model of Condominiums of Rural Warehouses by the Government. So, we perceive a need for greater articulation between governmental economic and social agents to learn about the country's reality and outline economic and social incentives for this emerging Brazilian rural collective action model. This articulation is essential given the model's contribution to reducing the warehouse deficit, greater product competitiveness, regional growth and development for agribusiness and municipalities, and money turnover in the country's economy.

In addition, on the economic incentives of a market order, the extra profit that rural producers have when marketing production with the Rural Warehouse Condominium is exemplified: "The main differential, economic incentive, would be the spread, which the Condominium gains with selling the grains owned by farmers" (Interviewee G).

This characteristic shows the extra gain with the owner's product when selling his production through the Condominium, without an intermediary in operation. Even stored, the producers keep the property of the produce (grains) because the participants own the silos. This gain can vary between 11 to 20% more per grain bag, depending on the time of year.

It was also verified that Government economic incentives are unattractive and insufficient for the country's construction and development of Condominiums of Rural Warehouses. However, concerning market economic incentives, mainly about the extra gain with the product in strategic marketing, there are favourable scenarios for Rural Collective Action, solid determinants for the rural model.

In the Theory of Logic of Collective Action, economic incentives are paramount for forming groups. If there are no economic incentives, a group does not survive long term, and there is no reason for the activity to remain in the market. Thus, producers' additional gain in marketing the product through the Condominium is a condition for the organisation to survive and promote its members' interests. However, high-interest rates for the financing of condominium warehouses have hindered the rural model.

Maeda and Saes [36] consider that Economic Incentives are superior to Social Incentives. Thus, the economic gain from the rural activity is a fundamental condition for the group to survive in the market.

Economic Incentives are not the only determinants for forming groups under the Theory of Logic of Collective Action. There are also Social Incentives, such as prestige, respect, friendship and social and psychological characteristics that encourage people to organise themselves into groups. These characteristics are evident in the collective actions of the Rural Warehouse Condominiums. Table 4 illustrates the social incentive.

**Table 4.** Interviewees' statements about the Social Incentives of the rural collective model Condominiums of Rural Warehouses.


Social incentives were highlighted by the interviewees, including greater interpersonal relationships; exchange of knowledge, information; technical and professional growth; job creation; learning among the Condominium's professionals and farmers, etc. Note the diversity of social incentives generated with the Condominiums of Rural Warehouses, which strengthen the rural movement and benefit from the interaction between all model members.

The Logic of Collective Action describes the "social pressure" in-group behaviour with Social Incentives. There is a set of rules in Condominiums of Rural Warehouses Condominiums, which is the model's Statute. The farmers' efforts and the model follow the Statute. In addition, each producer and/or employee is willing to help and collaborate with whatever is needed in the Condominium of which he is part. The demands are not binding, but rather, because the rural producers own this model and know each other, everyone collaborates in meeting the needs that may arise.

In addition, at Condominium meetings, everyone freely expresses their ideas, respects themselves and actively participates in the model. Interviewee A also reports that the rules and responsibilities are more "easily enforceable" in the smaller group, the Condominium.

For Olson, "social pressure" makes it easier to fulfil individual obligations in smaller groups due to the appreciation of the company of friends and colleagues and the zeal for social status, social prestige and self-esteem. The author reports that the social incentives and "social pressure" only work in small groups so that each member has "face to face contact with all others" [37]. In this sense, Social Incentives favour Condominiums in smaller groups.

#### *4.4. Small Groups and Large Groups*

The fourth category analyses the characteristics of rural collective actions between small and large groups. According to the Collective Action Logic Theory, smaller groups have more advantages over larger groups, smaller groups are more efficient and effective, and social incentives work better in small groups. Table 5 delineates the main aspects regarding the rural collective action model of Condominiums of Rural Warehouses, notably a small group.

**Table 5.** Interviewees' statements about the perspectives of the rural collective model Condominiums of Rural Warehouses in Brazil.


It is possible to notice characteristics that distinguish small and large groups and that stand out in small groups. Small groups are treated in this study as groups of up to 25 people (production around 4500 hectares, that is, 315,000 bags of 60 kg, with 70 bags yield per hectare on average). Large groups would already have 100 and 200 members (around 2.5 million bags of 60 kg).

This distinction is considerable for the development of Rural Warehouse Condominiums since this condition implies the efficiency of the progress of all Collective Action activities, including the financial return to maintain the model itself. According to interviewee A, a Condominium of Rural Warehouses can be small or large. Since it is tiny, and has low production it would be unfeasible to pay for the entire structure of the Condominium, which includes expenses such as energy, employees, maintenance, etc. On the other hand, a large producer could have its storage structure on his farm. In this way, he would make the installation costs viable individually. It is worth remembering that the Condominium model brings other advantages, not only the feasibility of own storage.

The small group still presents the advantage of the social characteristic for all members, a strong point described in all statements and meets the Theory of Logic of Collective Action regarding Social Incentives. Smaller groups achieve collective benefit more easily than larger groups; Social Incentives work best in small groups. Since the smaller the group, this fact occurs, the easier it is to reach the optimum point of getting the collective benefit. That is why larger organisations form small groups, smaller subdivisions [26].

According to the testimonies, a group with fewer people has fewer different opinions. Thus, it is easier to reach a consensus, and more occasional disagreements will arise.

In addition, small group participants start from the same common goal more simply. This aspect is more satisfactory in smaller groups. Smaller groups are more easily controlled, people know each other better, organisation and communication are easier, and the small group is more united and of greater affinity.

Other advantages prevail in small groups, such as in Warehouse Condominiums. The main benefits of the model are as follows: greater agility in decisions, speed in unloading and absence of queues at the silo, higher profit margin (product quality and direct sales), better prices and conditions in the purchase of inputs, express their opinions in the group for being smaller, logistical proximity to storage with ownership, and being the "owner of your product" provide freedom in marketing.

Individual action is also better recognised in smaller groups. In the Theory of Logic of Collective Action, this occurs since, in large groups, the typical participant knows that their efforts will not influence the result too much. He will be affected in the same way by the final decisions. Thus, individual effort in larger groups will not influence the decision. In smaller groups, the personal effort reflects more on the final decision.

Another fact identified in the collective rural models was the market competition between small and large groups. Even before the existence of Rural Condominiums in the region, large groups prevailed, which held 100% of the sales and associates. With smaller groups in the area that are similarly competitive or more, there is more competition among the different associative forms. This fact is positive for the end customer since, in more competitive markets, groups must always seek their best quality products and strive to be a more efficient and effective organisation. Otherwise, the client or associate will look elsewhere for these qualities.

Furthermore, for small groups, access to rural credit and bargaining power may be more challenging to achieve. Financing requires guarantees from the rural producers. Therefore, they must come together to fulfil this criterion needed for the banks to finance the storage structure. High-interest rates aside for small producers. Together, to gain more bargaining power and scale, smaller producers must come to achieve these goals. In larger groups, such aspects are more easily achieved.

Finally, it is possible to highlight the main differences between small and large groups according to the Rural Collective Action of Rural Warehouses Condominiums and the Theory of Logic of Collective Action (Figure 2).

**Figure 2.** Differences between Small Groups and Large Groups.

Based on the results, we verified that in small groups, such as the ones forming Condominiums of Rural Warehouses, the economic and social objectives, the control and agility of actions, the promotion of individual interests, cohesion and efficiency, and the results are more satisfactory than in large groups. Additionally, it is noteworthy that there are no free-riders in small groups, since everyone participates actively, knows each other and are driven by friendly relationships alongside Social Incentives, which are more easily attainable in smaller Collective Actions.

Finally, for a small group to be successful compared to larger groups, it must be well structured, organised, and financially supported. In the case of Condominiums of Rural Warehouse, the rural partner producers already belonged and/or knew models of collective actions, such as Cooperatives and other types of Associations. In this way, they already had practical and prior knowledge about collective effort to make the collective action Condominium of Rural Warehouse model works correctly.

#### *4.5. Determining Factors of Rural Warehouse Condominiums*

The fifth category qualitatively discusses the main determining factors for Condominiums of Rural Warehouses.

Some factors repeated the testimonies of charges and went against Economic Incentives and social conditions for forming groups. The advantages with the product commercialization, direct sales and superior profitability—the added value, the logistical gains, no queues, less flow and proximity of the storage unit to the rural property—and the social gains from the model of collective action are decisive benefits for Rural Warehouse Condominiums. Figure 3 presents the significant economic, social and logistics determinants for forming the condominiums of rural warehouses.


**Figure 3.** Determinants of Rural Warehouse Condominiums.

In the economic determinant group, one of the main motivating characteristics for structuring rural collective action is illustrated, which is the economic gain with such activity. This characteristic is remarkable for forming groups according to the Logic of Collective Action. Having its warehouse structure, understood as an extension of rural property, allows the rural producer to sell his products directly, without intermediaries in commercialisation, and at a reasonable time for him, causing an increase in his profit and adding value to the product, through the collective model and the best quality of the grain. It is worth remembering that the warehouse also belongs to the rural producer, which means that it is his property. This characteristic differentiates the Condominiums from other Brazilian Rural Collective Actions. Additionally, it guarantees the power of negotiation of the producers and dilution of costs between all partners.

We obtained these characteristics through the following main motivating economic factors highlighted by the interviewees: "security of having your product in your warehouse", "adding value", "storing and selling the product", "economic gain", "increased profitability" and "product commercialisation" (Table 6).

As social determinants for the structuring and development of Rural Warehouse Condominiums, the main factor is the importance of unity among producers. This characteristic is a condition for the creation and development of Condominiums. All producers act as partners with each other, have good relationships and share the same ideas. Common goals are essential for the business to be entirely successful.

Along with these social aspects, the rural producers belonging to the Condominium gain from exchanging information and experiences, thereby generating knowledge. Throughout such activities, producers still enjoy personal maturity and strengthen rural activity, which also leads to advantages in local growth and development. Again, Olson [26] describes that social incentives are more easily achieved and work better in small groups, as with Condominiums.

Finally, as to the logistical determinants, the Rural Warehouse Condominiums circumvented some logistical bottlenecks faced by rural producers, such as queues at third-party storage units, mainly in peak seasons. Thus, the model provides better efficiency in the loading and unloading flow and reduces the storage and logistics deficit.



#### *4.6. Perspectives of Rural Warehouse Condominiums*

The sixth and final category comprised the rural collective action model Rural Warehouse Condominium in Brazil.

The knowledge of the Condominiums of Rural Warehouses is restricted to the South of the country, mainly in the region of Palotina in the state of Parana, Brazil. Even the Condominium managers are unaware of other Warehouse Condominiums in other cities or areas of the country, including the Ipiranga Condominium and the Condominiums in the Palotina region, which are not known.

However, there are favourable scenarios for implementing new Rural Warehouse Condominiums, mainly for small and medium producers and places where there are logistical bottlenecks and storage deficits. This would be useful for rural producers who aim to enjoy the advantages of the condominium model, such as storage itself.

The interviewees provide some critical characteristics for the success of collective action of Condominiums of Rural Warehouses and for them to develop in other regions, such as (i) profile of the rural producer, producers who are unable to make their storage structure viable, or who seek be in some Rural Collective Action; (ii) regions with an associative culture and/or places where cooperatives or rural collective actions already exist; (iii) the group must have confidence and an entrepreneurial spirit; (iv) all farmers will be responsible for the smooth running of the model; (v) have a neutral, reliable figure with knowledge in agribusiness and marketing to manage and sell the products of the farmers (Condominium manager); and (vi) ascertain the production and storage needs of each partner before setting up the Condominium. Table 7 summarises some excerpts from the interviewees' statements on these aspects.

**Table 7.** Interviewees' statements about the perspectives of the rural collective model Rural Warehouse Condominium in Brazil.


In turn, the Condominiums of Rural Warehouse model is more sought after by people from the regions of origin of the Condominiums. Still, there are also interested parties from other areas of the country. The target audience is usually made up of farmers who have heard of the model, are looking to visit the existing Condominiums of Rural Warehouses to understand how it works, and to assess its viability.

Interviewee C reported interest and visits from different persons to learn about the model, from farmers, people from other states, and companies that sell silos. Interviewee D also reported the disclosure of Condominiums by companies that sell silos and reported having been visited by students from the Federal University of Paraná (UFPR), Parana, Brazil so that they could learn about electrical specificities as students of Electrical Engineering and agricultural colleges in the region, acting as temporary interns.

Complementarily, there was an expansion of this rural collective action in other municipalities in the South region. The interviewees are aware of new Condominiums of Rural Warehouses under construction. Some of them are in the vicinity of Marechal Cândido Rondon (Parana, Brazil) and Não-Me-Toque (Rio Grande do Sul, Brazil), and in the municipalities of Nova Santa Rosa (Parana, Brazil), Terra Roxa (Parana, Brazil) and Sapezal (Mato Grosso, Brazil). However, other states have already sought information, such as Minas Gerais and Mato Grosso do Sul. The interviewees cannot say whether Warehouse Condominiums have been established in these locations.

Furthermore, regarding the long-term success of the model, it is crucial to define the set of condominium rules (by laws), the issue of leaving members or family succession/death of a partner. It was noted that the topic could generate conflict between partners if it is not managed in a transparent and equal way among all. Thus, it is vital to set clear rules regarding whether the Condominium allows the sale of the storage quota, its valuation and who has the privilege of buying, for example, if another partner can purchase the quota or if external member of society can.

Finally, Government economic incentives become motivators for the creation and development of Condominiums of Rural Warehouses, mainly via financing programs for storage, which is in line with the profile of the rural producer and compatible interest rates. Together, the profile of the rural producer is consistent with the model, since smaller rural producers who are unable to access a storage structure are eligible to become part of the Rural Warehouse Condominium model and can enjoy the other advantages that the collective action brings.

As a dimension of the rural model Condominiums of Rural Warehouses, we suggest that collective action should meet the productivity needs and static storage capacity of partner producers, should have the capability to expand and should be financially viable for all members.

Considering the perspectives of the managers/owners of Condominiums of Rural Warehouses and some findings of this study, we identified the owners' demands and perspectives with other types of Rural Condominiums. Some examples include the Energy Condominiums to reduce energy costs from a sustainability perspective; the Silage Condominiums share machines and generate greater efficiency and reduce costs. Both models do not yet exist. Only Agroenergy Condominiums transform animal waste into bioenergy; thus, we suggest technical and financial feasibility studies on the topics.

#### **5. Condominiums of Rural Warehouse under the Lens of the Theory of Logic of Collective Action: A Reflection Based on Content Analysis**

The Logic of Collective Action theory clearly shows that collective action can arise at the moment that a number of individuals have common economic objectives. This argument is clear to the Rural Warehouse Condominiums.

The small group of rural producers with common economic objectives is present through storage in the rural collective action model. Rural producers, with the objective of establishing warehouse structures, taking advantage of the condominium system and storage, and circumventing logistical bottlenecks led to the creation of rural collective action in Brazilian agribusiness through the sharing of storage quotas.

The model is suitable for a small group, of between 8 and 24 rural producers, who produce in an area of 4557.14 hectares on average, and capable of generating revenue through the sale of production and storage. Thus, there is a financial and economic condition to make the storage structure viable and maintain the Condominium costs over the long term.

In addition, the producers who belong to the Condominium already had experience and/or knowledge in other forms of collective actions, and many farmers were already part of different types of cooperative models. However, the Condominiums of Rural Warehouse differ from other models by making the warehouse structure a common asset for all rural partner producers. Besides that, promoting the strategic commercialisation of production, direct sales of the products (grains), superior profit from the sale, its characteristic as a less bureaucratic model, greater decision-making power over their product, reduced queues in the loading/unloading of the warehouse and enter the unit. The producers own the storage structure itself, and individually. The warehouses would not be viable for small and medium producers outside the model.

In this context, small, restricted and closed groups, as in the Condominiums of Rural Warehouses, is a determining factor for the success of collective actions. Relationships of trust and friendship between the partners, with similar profiles and ideas, contributed to the smooth running of the model's decisions and activities. Small groups of rural grain producers organising themselves in Condominiums of Rural Warehouses are more likely to overcome their latency when realising that the benefits of cooperation outweigh the costs of achieving the physical storage structure. In this way, everyone assumes the cost of providing the collective warehouse.

Notably, the structure, good organisation and transparency, together with a neutral figure to manage the model, and financial and economic conditions, promote Condominiums of Rural Warehouses' longevity and growth and competition in Brazilian agribusiness.

It is worth noting that the country's political and economic conditions can encourage the structuring and expansion of this model. However, particularities related to each region should be considered. Government incentives, such as interest rates, rural credit and financing programs for the warehouse and the profile of small and medium-sized rural producers, are incentives for the viability of Condominiums of Rural Warehouses.

With the Collective Action Logic Theory, Condominiums of Rural Warehouses, formed by a small group, have greater benefits than larger groups. Olson [26] argues that small groups reach the optimum point of obtaining the collective benefit more easily.

Thus, economic objectives, cohesion and efficiency, control and agility of actions, collective benefit, promotion of individual interest, social incentives, results and the mitigation of free-riders are more satisfactory in small groups. The small group also has fewer opinions, diverges less, is easier to control and organise, and decisions are more agile and easier to make. Therefore, small groups have more advantages over larger groups.

#### **6. Conclusions**

Under the lens of the Theory of Logic of Collective Action, this article discussed and analysed aspects of rural collective action Condominiums of Rural Warehouses in the context of Brazilian agribusiness. An approximation of the Condominium Rural Warehouse concept is observed with the Theory of Logic of Collective Action, mainly considering the logic and characteristics of small groups.

Condominiums of Rural Warehouse under the analysis of group formation provide numerous advantages, such as making the warehouse structure collectively viable, strengthening the collective, providing greater efficiency for rural businesses and producers, allowing for the insertion and integration in a competitive market environment, economic benefits, a reduction of costs and increased profit.

The theory explains that besides the non-existence of free-riders, in small groups, the economic objectives, cohesion and efficiency, control and agility of actions, collective benefit, social incentives, results and the promotion of individual interest are more satisfactory.

In addition, based on the Content Analysis, it was possible to establish categories to analyse and discuss the model Condominium of Rural Warehouses under the lens of the Theory of Logic of Collective Action. The warehouse is revealed as the core of the common goal to all farmers. Some benefits are the feasibility of the warehouse structure, dilution costs, realisation with greater strength and the effectiveness of economic goals, obtention of greater profit (direct sales and strategic marketing), reduction of costs and logistical bottlenecks, and aggregation value to the final product. In addition, the Condominium of Rural Warehouses model is formed by a small, restricted and closed group, with a profile of producers ranging from small and medium to the Southern Region, with experience in other models of rural collective actions, as well as relationships of trust and similar ideas.

Regarding the different collective actions in the Brazilian agribusiness, the Cooperatives and Rural Associations that work in storage, agricultural, livestock and rural credit activities stand out. In addition, there are Rural Condominiums, a little-known and lesserproportioned rural collective action, which operate in different rural industries, such as storage, dairy, pork, coffee and agroenergy. The associative and cooperative culture is predominant in the country's Southern Region, which creates and develops collective actions. Additionally, we see the importance of uniting and forming collaborative groups for local growth, development and agribusiness so that individual objectives under collective action are more easily achieved and more efficient, promoting advantages for the individual, the business and the whole value chain.

Among the main differences between the Warehouse Condominiums and the other rural collective actions, the following stand out for the Condominiums: strategic marketing, direct product sales, higher profit from the sale, owning the storage structure itself, a less bureaucratic model, efficient, greater decision-making power for rural producers, and a reduction of queues for loading and unloading.

Government Economic incentives restrict Condominiums of Rural Warehouses due to the uncompetitive interest rates and high profile for small and medium farmers. In addition, interest rates have increased over the years, discouraging the viability of new warehouses and making storage financing "expensive". It is worth remembering that a storage deficit persists in the country. The lack of warehouses leads to a failure to enjoy the advantages of storage and causes stagnation in the storage sector, silos and similar companies, and for any collective actions involved.

On the other hand, market economic incentives include extra profit provided by direct sales—without intermediaries—and commercialisation at any time of the year. Financial Incentives are essential for the formation and survival of groups in the market, as the activity itself maintains itself and generates profit over the years.

Social Incentives are also achieved in Condominiums, by establishing Warehouses unity among producers through collective action that reflects interpersonal skills, knowledge exchange, technical and professional growth, job creation, and learning. Thus, personal social and psychological characteristics, such as respect and friendship, encourage individuals to organise themselves in groups. In smaller groups, social incentives and 'social pressure' are more easily achieved and efficient, favouring the Warehouse Condominiums.

Furthermore, small groups have more advantages over large groups and are more efficient and effective. Social Incentives work best, and the collective benefit is achieved more efficiently, as claimed by Olson [37]. In addition, small groups have fewer opinions and thus differ less, are more easily controlled and organised, and make decision making more agile and easier.

Furthermore, individual actions in smaller groups are better recognised. Individual efforts will influence the group's final results in small groups more so than in large groups, and there are no free-riders. Thus, in small groups, economic and social objectives, control and agility of actions, promotion of individual interests, cohesion and efficiency, and the results are more satisfactory than in large groups. It is worth mentioning that there may be competition in the market between small and large groups. These are beneficial for the organisation to be efficient, effective and to promote improvements.

Regarding economic determinants, financial gain is a major benefit, the product's commercialization—direct sale and superior profitability—is also a considerable benefit, as is the addition of value, and equity in the form of a warehouse. The logistical constraints provide logistical gains offered by the lack of lines, less flow, and proximity of the storage unit with the rural property. Social conditions are exemplified in the unity of rural producers in creating and developing collective action, exchanging information, personal maturation, and strengthening activity and freedom with the product's sale.

Finally, the model concerns small and medium rural producers, and places with logistical bottlenecks and storage deficits. Rural producers who wish to enjoy the advantages of an association (of collective actions), as well as storage itself, are also targets. There is little knowledge about the Condominium model outside Palotina, Parana, Brazil. The model is generally not known of throughout the country and by Government and Brazilian agribusiness stakeholders.

Rural collective action has recently expanded, mainly in the country's Southern Region, tackling salient issues associated with farming.

In this study, neither quantitative analyses nor statistical programs were used, which act as limitations of this study. Thus, we suggest it for future studies. It is also worth noting that considering that the study has a qualitative approach, it was not intended to produce generalised results. So, we suggest that future studies conduct a comprehensive survey across the country to identify if there are condominiums of rural warehouses in other Brazilian regions and other countries, by using a quantitative approach.

The selection of the study participants can also be recognised as a limitation because it occurred considering the criteria of representativeness, accessibility and convenience, and we interviewed the managers identified using documental analysis, mainly across the Internet and in reports of Brazilian Associations and the report of the pioneer project supported by FAP-DF, Brasilia, Brazil. We suggest that future studies consider other methods to select participants, such as the snowball sampling method in the case of qualitative studies, or quantitative sampling calculations in the case of quantitative studies.

Furthermore, the study has limitations associated with the size of the studied group of rural grain producers. However, there are few collectives of this type in the Southern Region of Brazil. In this way, we managed to analyse production and organisation experiences that represent the recent phenomenon, although limited by the chosen sample. There is a restriction on the extrapolation of results to other Brazilian contexts due to the sample size, the exploratory nature of the research and the particularities of each region in Brazil.

For future studies, we suggest: (i) analysing and discussing the Condominiums of the Rural Warehouses model under the focus of Transaction Costs Theory; (ii) conducting a technical analysis and economic feasibility studies for Silage and Solar Condominiums; (iii) developing a methodology for measuring the cost (value) of the storage quota, considering the possibility of a partner leaving the model, selling the quota or family succession; (iv) measuring the reduction in logistics costs using the Rural Warehouse Condominium model; (v) measuring agricultural marketing margins through Rural Warehouse Condominiums; and (vi) to apply mathematical models to determine the conditions of Brazilian rural collective actions.

**Author Contributions:** Conceptualization, A.C.G.F.; methodology, A.C.G.F.; software, A.C.G.F.; validation, A.C.G.F.; formal analysis, A.C.G.F.; investigation, A.C.G.F.; resources, A.C.G.F.; data curation, A.C.G.F.; writing—original draft preparation, A.C.G.F.; writing—review and editing, A.C.G.F., P.G., C.A.d.C., A.E.W.; visualization, A.C.G.F., P.G., C.A.d.C., A.E.W.; supervision, P.G., C.A.d.C.; project administration, P.G.; funding acquisition, P.G. All authors have read and agreed to the published version of the manuscript.

**Funding:** This study was supported by National Council for the Improvement of Higher Education (CAPES) and Foundation of Support to Research in Distrito Federal (FAP/DF).

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** Not applicable.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **References**


## *Article* **A Multi-Methodological Analysis of Jabuticaba's Supply Chain in an Agricultural Cooperative Production**

**Natallya Levino \*, Madson Monte, Carlos Costa and Walter Lima Filho**

Faculty of Economics, Business, and Accounting, Federal University of Alagoas, Maceio 57072-900, Brazil; madson.monte@feac.ufal.br (M.M.); carlos.costa@feac.ufal.br (C.C.); walter.filho@feac.ufal.br (W.L.F.) **\*** Correspondence: natallya.levino@feac.ufal.br

**Abstract:** *Background:* In the late 1990s, the idea of fighting drought gave way to the concept of how to live with drought in the Brazilian semi-arid region. From this perspective, the Brazilian Federal Government's investment in social technology and education encouraged local agricultural production and subsistence agriculture began to have a surplus for commercialization and income generation. However, there are still difficulties in the development of the productive chain, as perceived in Alagoas, Brazil, with the jabuticaba fruit and its derivatives. In this locus, problems related to the creation of value and distributions of the product were identified. *Methods*: This study proposed a participant observation in a rural producers' association and a multimethodological approach based on VFT (Value-Focused Thinking) and SWOT analysis aiming to structure the problem, identify communities' objectives and develop alternatives to solve these problems so that they can get more out of their production. *Results:* showed that the product has marketing potential due to its differential, but the producers are limited in the process of distributing the goods. *Conclusions*: So, this study was able to analyze the problems of this productive system in a structured way, generating suggestions for actions to achieve the strategic objectives of the cooperative.

**Keywords:** supply chain; structuring problem; family farming; multimethodology

#### **1. Introduction**

Balancing environmental sustainability with economic and social growth is a challenge for current and future generations. The high consumption rates of the world population, along with population growth, have driven the production of various industrialized products in recent decades. However, at the same level, a chain based on conscious food consumption has grown through a sustainable production system [1].

For [2], agriculture and the food systems it supports are at a crossroads. Despite recent technological advances in food production, almost one-third of food produced for human consumption, equivalent to a total of 1.3 billion tons, is lost during the production process up to the food processing stage or wasted at the food service and consumer level [3].

Given this scenario, there is a need to discuss sustainability and supply chain management practices [4]. Sustainable supply chain management (SSCM) refers to the management of resources within a company and the collaboration of members along the supply chain, taking into account the three dimensions of sustainable development that are required from customers and other stakeholders [5].

Brazil is one of the world's leading food producers and an important supplier of commodities to the global market [6]. However, the sector has high levels of food waste, with Brazil being among the top ten food-wasting countries in the world [7]. This demonstrates the importance of the theme and the need to analyze this chain.

The semi-arid region of Brazil is the one with the highest rainfall index in relation to other semi-arid spaces in the world [8]. However, it is one of the least developed in terms of appropriate technologies, and became so during the 2000s due to actions by the Brazilian

**Citation:** Levino, N.; Monte, M.; Costa, C.; Filho, W.L. A Multi-Methodological Analysis of Jabuticaba's Supply Chain in an Agricultural Cooperative Production. *Logistics* **2022**, *6*, 5. https://doi.org/ 10.3390/logistics6010005

Academic Editors: Karim Marini Thomé, Michael Bourlakis and Patricia Guarnieri

Received: 10 November 2021 Accepted: 5 January 2022 Published: 10 January 2022

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

federal government and the Articulation of the Brazilian Semi-arid (ASA), guided by the perspective of living with the semi-arid [9].

Institutionally, from the 1900s to the 1990s, the State was the actor with the greatest prominence in actions, specifically those to combat drought and those focused on technical aspects for cultivation and animal husbandry [10]. Between the 1990s and 2000s the Community, another institutional actor, composed of family farmers, cooperatives and associations, begins to legitimize its actions aimed at coexistence with the national semiarid [11].

To support family farming, the Community started to have food for subsistence and also to sell to State programs (National School Feeding Program (PNAE) and the Food Acquisition Program (PAA). Linked to the perspective of autonomy of the family farmer [12], to fix him even more in the Brazilian semiarid region, the insertion of the logic of the market has encouraged the opening of urban fairs composed of products from family agriculture, in which many have even started to seek, according to [13], organic certification.

Considering such aspects, there is an example of a cooperative in the semi-arid region of Alagoas, Brazil, that produces several agricultural products, but has stood out with the production of jabuticaba fruit. With this opportunity to commercialize their products, but with the inefficient logistics aspect, this study proposed a combination of SWOT analysis and Value-Focused Thinking (VFT) with the objective of structuring the problem, identifying the communities' objectives and developing alternatives to solve these problems so that they can get more from their production.

As contributions of this work, we can highlight: (a) better understanding of the problem situation through the steps of SWOT analysis and Value-Focused Thinking (VFT); (b) understanding of the operational techniques and the chain of small rural producers; (c) support for decision-making in the development of alternatives to solve these production problems.

Section 2 shows a brief literature review addressing food supply chain issues and recent publications related to the methodology applied in this study. A description of study locus and problem situation is presented in Section 3. The construction of the methodology applied with the cooperative is presented in Section 4, whose results are detailed in Section 5 along with the discussion and implications of the study. The last topic has a conclusion about the studies and ideas for future work.

#### **2. Literature Review**

This topic presents the theoretical elements that will guide the proposed discussions. Thus, we present the concepts of the Food Supply Chain and some application cases.

#### *2.1. Food Supply Chain*

Within the agri-food scenario the creation, functioning and evolution of food-supply chains, as well as studies on the unfolding of this reality, have become a key dimension in the development of new patterns of the rural production process [14,15]. In this regard [16] define that the food supply chain can be divided into five stages, including agricultural production, post-harvest handling, processing, distribution (retail or service) and consumption.

The phenomenon starts to be observed under the scope of food chains defined as alternatives, which are networks presented from a new policy and from aspects arising from an interest and demand for foods considered "more natural" and healthy [14,17]. This policy is responsible for distancing itself from the production of food with an industrial focus, essentially globalized, a mechanism that finds some limitation when consumer concerns with safe food are identified, together with perceptions from cultural dissonances that interfere in food tradition, limiting the action of globalization and leading to a reflection of changes in the commercialization of agricultural products [17], being centered since the beginning in the conjugation of initiatives appropriate for this approach such as "organic agriculture, fair trade, local products, and short food supply chains" [18].

This approach tends to cause discontinuity in the long industrial chains, which are naturally permeated by a common complexity and organization typical of this conglomerate with global reach, leading to production based on associative networks that differ from the traditional supply chain [19–21] relate that the ability to re-socialize and re-spatialize are peculiar to short food supply chains, as they allow consumers to make value judgments about the relative desirability of food based on their own knowledge, experience, or perceived image, thus dynamizing the existing relationship between producer and consumer.

Producer–consumer relations are important in this scenario because it is from this significant interaction that increasingly complex and diversified interfaces between these players are designed, in terms of the types of relations and organizational characteristics that they exhibit [21].

According to [15], the instances acting in this sector face complex issues, occasioned by additional marketing uncertainties and a shorter product shelf life, demanding the formulation of specific planning models that incorporate issues such as harvest policies, marketing channels, logistic activities and even risk management. Short supply chains can be identified as expressions of attempts by both producers and consumers to match new types of supply and demand [21].

#### *2.2. Background*

With the attention focused on the supply chain of agricultural products in recent years [15], when analyzing the essays that address the food supply chain theme, it can be noticed that its authors use several contexts to develop their approach about the subject in question.

Applied through the concept of circular economy, a food supply chain analysis is viewed from the perspective of the barriers encountered to establish the practice of this economic approach in food supply chains in the studies of [22]. In this manuscript, barriers are identified in the context of food-supply chain as the following: "cultural", "business and corporate finance", "regulatory and governmental", "technological", "managerial" and "supply chain management", with the development of practices allusive to Industry 4.0 being proposed as a way to overcome such challenges encountered.

Anchoring in discussions around circular supply chains, [1] in turn infers that the practice can exponentially generate value-added food, identifying that in this there are also considerable risks, suggesting the Internet of Things and an efficient management system within a supply chain as ways to ensure high transparency, interconnectivity and therefore efficiency in the process.

Still under this perspective of analysis of agri-food systems through the supply process, [23] performs, from a comparison of olive oil food supply chains, the inference that there is a greater appreciation among the compared agricultural products, from short supply chains, confirming trends and perspectives already observed in the literary context of the study in evidence.

Following this line [24], through Community-Supported Agriculture (CSA), which consists of shortening the food-supply chain, based on the understanding of this as a practice that goes beyond the maximization of profit derived from the family model, identifies through analysis of the applicability of this methodology in aquaculture management in the Barycz Valley, located in Poland, that the practice can become a necessary support for the sale of the product despite the local conditions not being favorable, in their entirety, to its development.

When conducting a study on the logistics of a short food-supply chain, ref. [25] point out the importance of logistics in the performance of short food-supply chains, as this is a challenge and is seldom discussed among researchers in the field, besides inferring that a series of actions should be considered in the itinerary of the implementation of this supply modality, such as the need to make sustainable environmental choices during all stages of food distribution, optimization of the location of the nodes in the supply chain, improvements in the distribution route and restructuring of the supply chain, as well as contributions by farmers, ranging from the adoption of open approaches to the application of innovative distribution systems to vertical and horizontal collaboration and even cooperation with researchers.

Focusing on the understanding of the developments caused by food chains in forest regions, [26] reference the discussion if the policies found in the supply chain implementation interfere in the livelihood results. They identify that certification and code of conduct policies applied to the research units of analysis interfere with positive outcomes through increased farm income for some businesses, although when simultaneously comparing cases of conservation and livelihoods, they did not identify evidence of trade-offs between these factors.

In part of the recent articles it is common to find discussions and propositions by scholars about the innovation that can be implemented within the supply process of a food chain, whether in its technical or practical aspects. In this way [27], p. 14, understand that the innovations brought by means of digital technologies were able to provide an improvement in the links between the stakeholders of the agri-food chain, since "consumption, production and distribution are the segments of the agri-food chain where most of these digital technologies operate".

The works by [28,29] carried out a survey of the key factors in the production chain of Brazilian family farming: discontinuity in product supply and production scale; demand; production outlets and commercialization channels; credit structure; government support and technical assistance; technologies; market information and market competition, among others. Some of these factors will be analyzed in the object of study in question.

Refs. [30,31] use a SWOT analysis to identify the aspects that influence small producers in sustainable development practices regarding their production. Meanwhile, Patidar, Agrawal and Pratap (2018) identify the development strategies aiming at the sustainability of the Indian supply chain as weakness and strengths through SWOT analysis.

The VFT method has been used in several contexts, including those related to rural and environmental issues; refs. [32,33] use VFT for structuring problems and discoveries of difficulties in the reverse logistics process of manufacturing coffee capsules.

The literature has shown the importance of using sustainable tools incorporated in the production process in the food-supply chain, using different approaches and analyzing different contexts in an attempt to measure these impacts. There is also emphasis on the need for analysis in shorter and more rudimentary chains, as is the case of the object of this study.

The literature review allowed for a better understanding of the problem and indicated the similarities of techniques and results found. This demonstrates that there are no works that classify the "values" of the VFT from the SWOT analysis in similar contexts. Although they are not new methods, it is a different approach which reflects the paper in a practical context.

#### **3. Problem Situation**

The cooperative object of study called Cooperativa Mista de Produção e Comercialização Camponesa do Estado de Alagoas (COOPCAM), which opened in 2011, is located in the following border communities: Serra das Pias, Serra Bonita and Monte Alegre. All are part of the rural area of the municipality of Palmeira dos Índios and are composed of 15 families that operate in three main fronts regarding the commercialization of products: vegetables; plants—especially the succulents—and the jabuticaba processed products, from the liquor (produced since 1970), the fermented (produced since 2018) and the sweet (produced since 2020). For these three fronts, from cultivation, harvest, elaboration to commercialization, the actions are carried out by the community itself.

Regarding the geographical space, there are about 815 (eight hundred and fifteen) jabuticaba trees irregularly scattered. The curious thing is that none of these were planted

by local people, whose local records indicate that there has been human presence for more than 100 (one hundred) years. The whole scenario of this flora was formed naturally, mainly due to the movement of the birds and local animals that consume the fruits and leave the seeds in the area, considered to be an agroforest, since jabuticabeira, jackfruit, orange, cashew, umbuzeiro and coffee trees coexist in the same space.

The relationship of these residents with the processing of jabuticaba fruit dates back to the mid-1970s, when an employee of the state agency, the National Institute for Colonization and Agrarian Reform (INCRA), provided a recipe to a resident who started producing what is locally called jabuticaba wine. Figure 1 is a flowchart that summarizes the stages of the supply chain of its production.

**Figure 1.** Jabuticaba supply chain in Palmeira dos Índios.

This community production process involves the participation of local residents from the harvest. From preparation to tasting, it has historically been much more symbolic, immaterial and cultural. However, since 2015, the residents have approached the market logic, starting to market—in local fairs and in state and regional events, both linked to the semiarid theme—the hitherto named jabuticaba wine.

Looking at the supply chain considering the post-production stages, it is verified with respect to the sale that there is: (i) the so-called Peasant Space, built in 2016 on the side of the road, for the disposal of their production. In this space, the logic is for the consumer to travel to this specific place to buy the products. Still under this logic, the products are also marketed when (ii) interested parties seek out the residents in the community itself to purchase the products. In order to bring the products closer to the consumers, (iii) the residents themselves take the products for sale in local fairs. However, in situations where displacement is necessary on the part of producers, they face the difficulty of not having a vehicle to transport this production and, therefore, are always below the local potential.

When the focus is on the stages preceding the production of wine, besides the production and harvest of jabuticaba, there is a local campaign for the donation of wine bottles, which are sanitized in buckets and then bottled using cork stoppers bought by the farmers. In this sense, the limitations are about the dependence on donations of bottles and the purchase of cork stoppers which, currently, counts on only one supplier.

#### **4. Methodology**

This research can be classified as descriptive and qualitative because it describes the characteristics of the phenomenon and uses a qualitative approach to analyze the problem and to propose an objective framework and alternatives. This study also contributes to the literature in the field of management, because it considers and respects the locus as a realm of singularities. Its participants understand and act on a given context, from which historically was constructed as satisfactory, considering its own contingencies and complexities [34]. Based on this assumption, the tools and theory in management (the inputs) are not imposed, but they are inserted on their own merit, that is, based on empirical demands.

Values-Focused Thinking [35] and SWOT analysis form the methodological basis of this study. Data collection is based on participant observation and interview (Appendix A). In the participant observation phase, one of the authors participated in immersion with the entire production process, from the harvesting of the Jabuticaba fruit to the sale of the products. The producers are asked generative questions, that is, when a question is asked to the participant in order to instigate him to narrate, with a historical–temporal trajectory, the situations that correspond to local characteristics of the order participants [36]. Thus, the generative question for each participant was: We tell, freely, your trajectory—from the beginning to the present day—to organize the production and marketing of jabuticaba derived products.

The participant observation is the result of an extension project of the Federal University of Alagoas with rural producers since 2018. In order to understand the phenomenon of production and the difficulties faced by producers, some studies have been conducted since then through direct observation. The interviews developed for the present manuscript were conducted in 2021. Figure 2 summarizes the steps to achieve the research objectives.

**Figure 2.** Research flowchart.

Afterwards, interviews were conducted in two stages with four participants—community leaders in relation to local management, harvesting, production and marketing—when investigations were made according to VFT and SWOT. Thus, part of the framework was designed from participant observation and part from interviews. The interviews aimed at a more comprehensive understanding of the situation considering the farmer's own view and also aimed at validating the results.

The author of VFT points out that common thinking about situations, where the decision-maker first thinks about the problem and then thinks about what he wants to achieve, reasoning is limited to obvious solutions and new opportunities go unnoticed. He classified these methods as Alternative Focus Thinking. In contrast to these methods, when a decision-maker structures the situation by prioritizing the understanding of his own goals and how to achieve them, it is called values-focused thinking. The method developed by Keeney is its namesake [35].

Thus, VFT is developed in order to define and organize the objectives of the people involved in this decision environment. Thus, it can be divided into three steps: identifying objectives; connecting related objectives and classifying them; developing alternatives that best fit these objectives. The third step is the key point of VFT since it directs actions towards the realization of its objectives, rather than just solving a problem.

The identification of goals was achieved by asking "what do you want to achieve?", "where do you want to go?", "is there something wrong?", "what is preventing you from achieving them?", and so on. These are the main interview questions.

The second step, by connecting the related objectives, allows you to build a representative framework and classify the objectives into means objectives (necessary to achieve another objective), both fundamental (issues central to the situation) and strategic (aspects central to the organization's strategy). By looking at the structure of the objectives, alternatives/actions can be developed in order to achieve them one at a time or sometimes a single alternative can also benefit several objectives at the same time.

However, some aspects relevant to achieving these objectives may not necessarily be under the control of the decision-maker. For this reason, a SWOT analysis was implemented on the exploration phase of the VFT objectives by classifying key means and objectives as related to a Strength, a Weakness, an Opportunity or a Threat [37–39]. In this way, the course of action to be designed to achieve the objectives takes on different characteristics:


Following the above description, the next section describes the results obtained and presents a discussion about them.

#### **5. Results and Discussion**

This topic presents the elements obtained through participant observation, the application of the VFT method, and the SWOT analysis to understand the problem and propose alternatives.

#### *5.1. Results from Participant Observation*

The participant observation data demonstrated the compositions of the Jabuticaba fermented productions in 2019 and 2020. It was verified that the 2020 production had a sharp increase compared to 2019, taking into account the good harvest obtained in the respective fiscal year. Therefore, the production had a positive variation of 152.86% (1770 L) in 2020, as opposed to the 2019 production (700 L).

In addition, the behaviors of the finished product losses were observed. It was seen that the finished product loss had a positive variation, that is, an increase of 12.39% (525 L) between 2019 and 2020, an elevation caused by the following relationship found: proportionally, the more one produces, the greater the loss of the product produced.

Thus, it is notable that the lack of mechanization and the adoption of rustic methods to the production process of COOPCAM in the production of Jabuticaba wine causes this loss of product to be intensified. Moreover, the cooperative no longer commercializes this quantity of wine, which results in an increase in the cost of the liter produced, considering this loss as "normal" within the production process.

Regarding the finished product for sale, it was observed that despite the increase in production between 2019 and 2020, the quantity of product sold suffered a decrease. This occurred mainly due to the fact that the jabuticaba fermented fruit has a dry-type flavoring, since sugar and cachaça, both used in the production of jabuticaba liqueur, were removed from the production process. Choosing to produce a fermented wine caused the sales positioning to be redirected to a more urban public that also appreciated dry wine.

Besides structural issues, the difficulty encountered by local farmers is in relation to the distribution of their products derived from jabuticaba, because they need the following:


The survey of key factors in the production chain in Brazilian family farming during the participant research was performed by classifying them according to elements pointed out by literature. The authors mention recurrent problems in family farming, some of which were also identified in the present case, as described below.

• Discontinuity in product supply and production scale.

The jabuticaba liqueur had been produced since 1971 (although it was always called jabuticaba wine) for their own consumption in the June parties in the rural area of Palmeira dos Índios. The production of the wine itself started in 2019 and occurs only in the months of March to June and depends on the rains in the region. It is planned for 2021 to create new products derived from the jabuticaba fruit, such as the sweet of the fruit and the sweet of its peel, in addition to the fermented fruit and the liqueur.

• Demand, production outlets and commercialization channels.

Limited demand for the product due to difficulties in transportation to the commercialization sites. Product has demand; however, the cooperative does not yet have good logistic capacity for its distribution. The labels do not yet meet the required standards, which makes it difficult to deliver the product and sell it in larger centers. Sales are mainly due to the participation in agroecological fairs and from clients who already know the product. For now, sales take place in the current physical space, at fairs and/or by order.

• Credit Structure.

The resources for the actions and investments come from the MPA (Small Farmers Movement) and from COOPCAM (Cooperativa Mista de Produção e Comercialização Camponesa de Alagoas), in addition to the resources from the sales of vegetables, liqueurs and fermented products that are being used to build the production space and to acquire new production equipment.

• Government support and technical assistance.

Government support is provided through technical assistance from the following agencies: EMBRAPA Alagoas, Sebrae, the Alagoas Maior Program [Alagoas government], the ECOFORTE project with AAGRA (Alternative Farmers Association) and research from UFAL (Federal University of Alagoas).

• Technologies.

The production process is going through a modernization process. Stainless steel barrels were purchased for the fermentation of the beverage, and a cistern was built to catch water, which is scarce in the production space. The organization of the production system was started, identifying processes and organizing flowcharts.

Several aspects were related in the participant observation. In order to organize the problem situation, the next section describes the results of the VFT as a tool for structuring problems and defining strategic decision elements.

#### *5.2. VFT-SWOT Situation Structuring*

Once the description of the environment was made, one could see that several problems are faced simultaneously. In order to organize the constituent elements of this problem and transform them into objectives, the information was organized according to the Value-Focused Thinking methodology. Thus, with participant observation it was possible to identify elements related to what is wrong and the constraints of the activity, which were already converted into objectives to adjust or eliminate them. In other words, it comprises part of the first VFT stage of identifying objectives.

This step was then complemented with questions to identify the objectives, as described in the methodology, as well as with questions directed at the identification of strengths, weaknesses, opportunities and threats. In this way, we identify the objectives that represent the internal and external factors to the organization, that is, what is and what is not under the control of the community itself, respectively.

Therefore, the SWOT analysis has the role of balancing the result of VFT on the creation of alternatives and decision opportunities, since the method of acting by the organization is different in face of the objective that is being considered, as stated in the methodology. Therefore, the SWOT analysis is a robust and extremely effective technique; it is found to be very helpful to clearly point out the current flaws and provide future direction [39]. Figure 3 presents the identified objectives already with their relations and classified as medium, fundamental or strategic and as to the SWOT quadrants. Thus, Figure 3 is a result of the problem structuring, which facilitates the understanding of this complex environment through a graphical representation. Furthermore, it serves as a guide for the proposition of solutions.

**Figure 3.** Flowchart of VFT objectives and SWOT analysis.

The means objectives are those necessary for the achievement of the fundamental objectives. Market research is necessary to understand consumer behavior regarding the acceptance of current products and the new products to be developed, as well as to measure the size of this market, essential for planning production capacity. The dimensioning of production, as well as the feasibility of trading the community's products, depends on the understanding of costs and the consequent definition of prices in a way that at least covers the production costs and expenses, besides providing a profit margin.

Note that some production and product problems may be related to the lack of specific technology and equipment, as well as to the increase in production capacity to serve current and new markets. There is also the serious problem of the lack of vehicles, which makes it impossible to sell even though we have the production capacity and expectation of demand. For such investments, it is necessary to have more financial resources available.

Labeling products, including their specifications, is necessary to explore new markets. For some occasions, such as air transport, it is mandatory. Furthermore, they can take advantage of this need to create a label and turn it into an opportunity to improve the appearance of the products, which increases the demand for products of the region, making it also better known.

The support from the government and other institutions influences the dissemination of the community, can support fundraising, but also promotes interinstitutional cooperation, making it have more technical and technological support for the development of its activities, and adjust production and agricultural technology.

At the center of the objectives are the strategic ones. They are considered so because, according to the answers given, they are central issues and are not being considered so that it is possible to achieve other objectives. It is understood as the purpose of the business, therefore, to make the production and commercialization of organic products viable, to highlight the community as well as women's work, and to bring a better financial condition to the community. With good financial planning it is also possible to reinvest in production. However, this is a later stage that depends beforehand on the achievement of the means and fundamental objectives.

With the objectives defined, these were segmented into the quadrants of the SWOT analysis. According to [40], the elements that compose the SWOT analysis must be understood according to the following elements: "S + W" factors include: (1) management ability; (2) technological ability; (3) financial ability; (4) organization; (5) operations "O + T" factors include: (1) social and political context; (2) economic context; (3) market opportunities; (4) competition mechanisms.

The objectives were then grouped into internal and external factors, and again grouped into strengths, weaknesses, threats and opportunities. With this defined, the process becomes clearer for the establishment of alternatives. It is worth noting that according to [35], the first alternatives created are generally the most obvious, those that have been used before in similar situations and those that are already widely available. The development of alternatives is initially based on the means objectives themselves and by combining them in order to develop alternatives that satisfy more than one objective simultaneously.

The alternatives can be seen in Table 1, and are classified according to the control capacity (external or internal factor to the community) and related to one or more objectives. These alternatives, since they are created based on intermediate objectives, are considered for a quick start (short term), since not reaching these objectives can delay the achievement of the organization's strategic objectives.

A1 is a course of action that is considered external because it depends on the approval of another institution to be confirmed. The region has public university centers, as well as public institutions that promote projects aimed at improving productive systems. A2, in turn, depends exclusively on the cooperative itself. Understanding the production costs of the products is fundamental for a correct definition of the operational result and calculation of the profit of the cooperative. Costs are also used to make decisions about production mix and investments. If managers do not have knowledge about costing tools, the partnerships reported in A1 are also suggested for this activity.

Although currently, due to various restrictions, it is not possible to meet all the perceived demand, the market study is necessary (A3) since making investments without a better commercialization perspective can be risky for the cooperative. Therefore, it is interesting that this is one of the first actions to be taken. Furthermore, market research can be used to attract investors or justify public funding needed to expand and improve production and logistics activities (A4).

**Table 1.** Alternatives identified.


A similar reasoning of A2 can be applied to A5. Besides establishing a cost structure, it is necessary to study the financial and budgetary capacity of the organization in order to evaluate the reinvestment capacity. This alternative gains even more importance in a possible denial of the external investment alternatives. It is worth pointing out that in this issue one faces a dilemma, since the income of the communities that are part of the cooperative is also a strategic objective. Then, this reinvestment must be discussed internally so that this investment possibility does not harm the community's income at this time.

A6 refers to the interinstitutional support in the various stages of the jabuticaba production chain. The difference between A6 and A1 lies in A6's long-term vision. While A1 refers to the adjustment of an already commercialized product, with punctual improvements. A6 refers to studies and actions that will bring returns later. As examples, green production techniques, both agricultural and manufacturing, can be applied to increase productivity, marketing to increase brand value, logistic organization and other actions in partnership with specialists.

These alternatives are not prioritized. It is understood that they are urgent actions for the organization. The prioritization may be the result of another study, but concerning the activities that will be carried out to achieve the fundamental objectives. It is worth mentioning that this work was limited only to the proposition of alternatives, which will be presented to the rural producers; however, their application and analysis is beyond the scope proposed here.

#### **6. Conclusions**

Family farming has improved the quality of life of several small producers throughout the Brazilian territory, by offering an income expectation through the commercialization of their products. However, a series of barriers have been presented by these producers throughout their production chain, as is the case portrayed in this article.

The methodology proposed in this article sought to identify the main problems presented in the production chain of the jabuticaba fruit, through participant observation. With this, it was possible to understand that despite the great potential presented by the product for commercialization, the producers presented problems in the production, sale and delivery of the goods.

The use of the VFT approach combined with the SWOT analysis made it possible to identify the main objectives (means, fundamental and strategic), categorize them in the internal and external environments and, at last, propose some alternatives that could subsidize the decision process from short- to long-term. With this, producers can clearly identify the actions to be taken for operational, managerial and strategic improvements. The methodologies are especially useful and easy to reapply to similar contexts and situations.

The alternatives or actions recommended in this study aim, therefore, at concentrating efforts to meet the objectives indicated by the cooperative members themselves. The recommendations of this study aim, therefore, at concentrating efforts to meet the objectives indicated by the cooperative members themselves, but also deepening this vision from the participant research. This step, along with the VFT and SWOT, made it possible to see problems and alternatives whose relationships and importance were not necessarily clear. With this, producers can clearly identify the actions to be taken for operational, managerial and strategic improvements. The methodologies are especially useful and easy to reapply to similar contexts and situations.

The main limitation of the work is due to the characteristic of decision support methods, since a result is valid only for this particular situation, at this moment and with this group of decision-makers who answered the questions. Changes in these aspects of the decision environment may lead to different results. For future work, the use of the multicriteria decision support approach is suggested for bidding the weights and criteria of the producers, as well as in the ordering and prioritization of alternatives, especially when the means objectives are being met.

**Author Contributions:** Conceptualization, N.L.; data curation, C.C.; formal analysis, N.L.; methodology, M.M.; validation, C.C.; visualization, C.C.; writing—original draft, M.M. and W.L.F.; writing review and editing, N.L. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Ethical review and approval were waived for this study, due to this research aims at the theoretical deepening of situations that emerge spontaneously and contingently in professional practice, as well as not reveals information that could identify the participants.

**Informed Consent Statement:** Informed consent was obtained from all subjects involved in the study.

**Data Availability Statement:** Not applicable.

**Acknowledgments:** The authors thank COOPCAM (Cooperativa Mista de Producao e Comercializacao Componesa do Estado de Alagoas) for their collaboration and UFAL (Universidade Federal de Alagoas) for their support in carrying out the research.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **Appendix A**

#### **Questionnaire**

Objective: The questions were designed to identify the operation of the production chain of items produced with jabuticaba fruit.

These must be answered in the following aspects (Q1 and Q2):


(d) Operation.

#### **Q1: What are the strengths of the production of items related to jabuticaba?**


#### **Q2: What are the weaknesses of the production of items related to jabuticaba?**


These must be answered in the following aspects (**Q3 and Q4**):


#### **Q3: What are the opportunities Farmers can explore to produce jabuticaba fruit and its by-products?**


#### **Q4: What are the threats that Farmers might face when in production of jabuticaba fruit and its by-products?**

1.9 What external obstacles do Producers see in the production?

#### **References**

