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Agricultural and Food Economics

Box 2 Case B

From: Alignment between vertical and horizontal coordination for food quality and safety in Indonesian vegetable chains

Vertical coordination

Specialised wholesaler 1 has contractual arrangements with local individual farmers regarding the supply of vegetables to modern retailers. In terms of contractual arrangements, wholesaler 1 sets out intrinsic quality product specifications. Farmers should meet the intrinsic quality requirements regarding size, appearance, colour and shape. Quality monitoring is carried out by wholesaler 1, as it sorts vegetables before delivering them to the modern retailers. Wholesaler 1 offers no technical assistance or farming inputs to contracted farmers to help them achieve quality standards.

Horizontal coordination

No PO is involved in this chain.

Quality performance

Vegetables delivered to wholesaler 1 by the farmers meet intrinsic quality requirements

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