Summary
In Germany the direct marketing and the on-farm processing showed a
clear increase since the mid of the eighties. Regional focus points are
South- and West Germany as well as the some regions in East Germany. The
mostly offered products are eggs, potatoes and slaughter poultry from conventional
farms and potatoes and vegetables from organic working farms.
In Germany the direct marketing is less popular in disadvantaged areas
than in others, although especially this marketing way is frequently the
recommended concept.
Regarded from the economical point of view, only for a little group
of farmers, the direct marketing and the on-farm processing can be considered
as a competitive alternative to the conventional agriculture with multistage
marketing.
1. Focus points of direct marketing and on-farm processing
In Germany, direct marketing is far more popular than in the UK, but still has not yet reached the same importance than in France. There are not any exact data available about the number of direct marketing farms. Assuming 25,000 direct marketing farms (without the numerous farms with farm gate sale of milk, seasonable poultry or honey), in other words more than double than the data base of our department has registered, this would be 4.5% of all farms (550,000 in 1995) in Germany. However, this comparison does not show the actual economic importance of direct marketing, as the part of part-time farming is much less within direct marketing farms than in the general number of farms.
The annual turnover in the direct marketing including the direct sales
to large-scale consumers (catering) and retailers accounts a self estimated
amount of DM 4 thousand millions and more. This would be roughly 7% of
the total agricultural sales. Considering this, the direct marketing is
more than a niche existence. The direct marketing in Germany is more spread
over South- and West Germany than over North Germany. In East Germany as
well, in some regions (around Berlin, in Saxony and Thuringia) there is
a relative strong development toward direct marketing favoured by the fact
that here numerous big farms - mainly co-operatives) entered especially
the direct marketing of meat (WIRTHGEN/SCHEUMANN, 1995).
The high increase in direct marketing can be explained by supply and demand:
A survey of 200 direct marketing farms presents that in 1994/95 nearly 28% of the participated farms with all the land are situated in disadvantaged areas. (KUHNERT, WIRTHGEN, 1997). In comparison to that, in West Germany there were 57% of the full-time farms situated in less favoured areas, while most of them are forage-growing farms with a high part of grassland and density of dairy cows (BMELF 1996, p. 24).
The reasons for the occurrence less than the average in disadvantaged
areas are that certain activities of the direct marketing depend on locality.
Economic advantaged places with buying power over the average favour the
direct marketing. Places in disadvantaged areas - compared to other regions
- require much higher sales effort by the establishment of direct marketing.
2. Product assortment
'One-product-enterprises' are an exception for direct marketing farms
in Germany. Referring to the above quoted survey (n = 200) more than 80%
of the German direct marketing farms offer additionally on-farm processed
food (KUHNERT/WIRTHGEN, 1997).
The most usual on-farm produced products
- of conventionally working farms are:
· Eggs and
· Potatoes in the same strengths, followed by
· Slaughter poultry and
· Fruits
- and of organic farms are:
· Potatoes,
· Fresh vegetables,
· Cereals (corn) and
· Fresh beef.
The strongest products contributing to the turnover of direct marketing products
- of conventional working farms are:
· Eggs (13% of the participated farms),
· Potatoes (9.6% of the farms)
· Fresh beef and
· Asparagus.
- and of the organic working farms are:
· Fresh vegetables (22% of the participated farms),
· Fresh beef (20% of the farms),
· Cheese, as well as
· Potatoes and wine.
The strong differing product assortments of the conventional and organic working farms present the various consumption habits of the consumer groups as well as the sales problem within the multistage marketing of the organic products.
Listing the direct marketing products of the on-farm processing, registered
in the direct marketing data base (see footnote 1), the following four
product groups should definitely be named:
1. Pork and beef,
2. Poultry,
3. Cereal products (bread, cakes, pastries, and pasta) and
4. Milk products (from cows, goats and sheep).
The first named product group (pork and beef) offered by approximately 60% of the direct marketers (including bought-in products) and therefore roughly three times more than the other product groups.
In disadvantaged areas, especially products from the product groups 1 and 4 play an important role:
- beef as well as
- dairy products from cows, goats and sheep.
Aiming the stronger support of disadvantaged areas and its agriculture,
new innovative distribution and marketing ways need to be developed.
Currently there are the following obstacles:
The sale directly from the farm, offered by nearly all direct marketers,
contributes usually too small annual turnovers in disadvantaged areas;
an exception are high touristic less favoured regions.
3. Economic relevance of direct marketing
The direct marketing and the on-farm processing offer a possibility of additional income for numerous farms, and create jobs for the region. The "average" direct marketing farm employs approximately one worker in the direct marketing. This person realises with direct marketing on average approximately annual turnover about DM 150,000. The 'upper quarter' of the questioned farms (n = 47) in Germany reaches per worker a turnover of approximately DM 200,000 with direct marketing, while the 'lower quarter' (n = 44) only records less than DM 60,000 (WIRTHGEN, KUHNERT, 1997).
Generally in Germany the part of the value added from the turnovers
in direct marketing is on average a little higher than from the remaining
agriculture. This shows that the direct marketing can be a competitive
alternative to the conventional marketing way, in particular if the direct
marketer works like the farms of the 'upper quarter'.
References
BMELF 1996: Agrarbericht der Bundesregierung 1996.
KUHNERT, Heike und Bernd WIRTHGEN, 1997: Die Bedeutung der Direktvermarktung als Einkommensalternative für landwirtschaftliche Betriebe in der Bundesrepublik Deutschland - Eine Situationsanalyse. Forschungsbericht BMELF (unveröffentlichtes Manuskript).
KUHNERT, Heike und Bernd WIRTHGEN, 1996: Hofeigene Verarbeitung von Fleisch auf konventionell und ökologisch wirtschaftenden Betrieben. Berichte über Landwirtschaft, 74 (4).
WIRTHGEN, Bernd, 1996: Direktvermarktung: Nutzen oder schaden Lebensmittelskandale. DGS (Die Geflügelwirtschaft und Schweineproduktion) 51/52, p. 6.
WIRTHGEN, Bernd und Uwe SCHEUMANN, 1996: Ausgewählte Aspekte der Fleisch- und Wurstdirektvermarktung in ostdeutschen landwirtschaftlichen Großbetrieben. In: Direktvermarktung und hofeigene Verarbeitung im In- und Ausland. Hrsg. B. Wirthgen, H. Kuhnert, R. Bokermann. Arbeitsberichte zur angewandten Agrarökonomie, Nr. 21, GhK-Witzenhausen, p. 41-48.
WIRTHGEN, Bernd, Bertil SYLVANDER und Irene MELET, 1996: Verbraucherakzeptanz von Produkten aus hofeigener Lebensmittelverarbeitung. Ein Vier-Länder-Vergleich anhand nationaler Verbrauchererhebungen 1994. In: Direktvermarktung und hofeigene Verarbeitung im In- und Ausland. Hrsg. B. Wirthgen, H. Kuhnert, R. Bokermann. Arbeitsberichte zur angewandten Agrarökonomie, Nr. 21, GhK-Witzenhausen, p. 87-97.