Institutional Changes in the Relationship Between Producers and Milk Processors: A Case Study in the States of Minas Gerais and Paraná

Abstract

The Brazilian dairy agroindustrial system underwent institutional changes between 1990 and 2018. The Normative Instructions for milk established by the federal government between 2002 and 2018 demanded from the agents new technical parameters of production that may impact the industrial organization of the sector. Based on this institutional change, this study aimed to answer the following question: what were the effects of institutional changes on the  relationships between rural producers and the milk industry in Brazil’s agroindustrial system? The aim of this study is to analyze the effect of the institutional changes NI 62 on the
specificities of the dedicated, temporal and locational assets, and their implications for the relationship between milk producers and processors. The study used a qualitative approach with questionnaires applied to dairy producers and interviews with the processors from two of the main producing regions of Brazil. In Ponte Nova-MG, a traditional milk producer, loyalty strategies with formal payment contracts for quality and technical assistance increased due to the growth of the competition, due to the changes in the specificity of assets in the relationships between producers and processors. In Castro-PR, the NI 62 did not change the relationship
between producers and processors.