The choice of supply channels in the Hungarian fruit and vegetable sector - a case study

The agricultural reform in Hungary broke the previously vertically integrated agri-food system along various lines. The structures of agriculture, the food industry and food retailing have fundamentally changed, in ways that have also influenced the vertical governance structures in the sector. The aim of this paper is to investigate the choice of supply channels in the Hungarian fruit and vegetable sector available to farmers by employing the framework of transaction-cost economics. The authors' analysis is based on a survey of marketing-channel choices by fruit and vegetable producers in Csongrád County. A multinomial logit model is applied to reveal on the determinants influencing the choice among various supply channels. The results seem to contradict some of the basic propositions of transaction-cost economics.