Abstract: Belgian pork production has faced stagnating prices for decades. It remains unclear whether excessive market power from slaughterhouses or meat retailers has played a role in this trend. While market power studies can reveal some of the market dynamics in this setting, this type of research has not yet been applied to the Belgian pork market. The present paper investigates oligopolies and oligopsonies in the pork production sector. We build a new model that focuses on market power dynamics in the market for live pigs and distinguishes horizontal and vertical market power parameters, both for pig farmers and for slaughterhouses. The results follow from an empirical application using unique slaughterhouse data for 2001–2015. The results indicate that the farmers benefit from a significant power advantage in the live pig market, when very modest price demands are taken as a reference. The final market price of live pigs approaches the price requested by the farmers. On the other hand, the measured vertical market power also suggests that a pig farmer does not receive the (modest) full-wage-based salary. The market power of the slaughterhouses is also limited. Market power as a result of collusion—that is, horizontal market power—is present, but is not strong. However, there are significant differences between the slaughterhouses in terms of mark-up on the input prices. These differences reflect differences in company strategy, and this diversity further reduces the possibility to create sector-wide collusive behaviour.

Abstract: The importance of risk perception and risk attitude for understanding individual's risk behaviour are independently well described in literature, but rarely combined in an integrated approach. In this study, we propose a model assuming the choice to implement certain risk management strategies to be directly driven by both perceptions of risks and risk attitude. Other determinants influence the intention to apply different risk strategies mainly indirectly, mediated by risk perception and risk attitude. This conceptual model is empirically tested, using structural equation modelling, for understanding the intention of farmers to implement different common risk management strategies at their farms. Data are gathered in a survey completed by 500 farmers from the Flanders region in Belgium, investigating attitudes towards farming, perceived past exposure to risk, socio-demographic characteristics, farm size, perceptions of the major sources of farm business risk, risk attitudes and the intention to apply common risk management strategies. Our major findings are: (i) perception of major farm business risks have no significant impact on the intention of applying any of the risk strategies under study, (ii) risk attitude does have a significant impact. Therefore, rather than objective risk faced and the subjective interpretation thereof, it is the general risk attitude that influence intended risk strategies to be implemented. A distinction can be made between farmers willing to take risk, who are more inclined to apply ex-ante risk management strategies and risk averse farmers who are less inclined to implement ex-ante risk management strategies but rather cope with the consequences and diminish their effects ex-post when risks have occurred.