Abstract: Vertical integration is a means of increasing market power. For some agricultural products, it is easier for farmers to exert control over their product beyond the farm gate, but for others it is more difficult. Cases in the latter category have two main characteristics. First, the farmer cannot sell the respective product to final consumers without processing. Second, processing is capital-intensive. Consequently, farmers have limited sales channels, and vertical integration of the supply chain is complex and challenging. It implies cooperation among farmers to process the raw material at a profitable scale and to finance the installation of processing facilities. Thus, for these product categories, farmers are prone to market power issues, since they depend on private businesses that have the financial means to install processing facilities and the logistical capacities to organize the collection of large amounts of raw material. This paper aims to identify and analyze the role of supply chain integration for farmers who are already cooperating horizontally. Two case studies serve as the basis for the analysis: sugar beet in Flanders, Belgium, and oilseed rape in Hessen, Germany. The analysis is based on a qualitative research approach combining interviews, focus groups, and workshops with farmers and processors. While for sugar beet, the effects of market power are emerging only now with the termination of the quota system, farmers growing oilseed rape have been experiencing these problems since the 1990s. Our analysis concludes that most strategies to maintain or improve farm income have been exhausted. Even various forms of vertical integration supported by European policies do not necessarily work as a successful strategy.

Abstract: The environmental challenges have become increasingly integrated into the European Union's Common Agricultural Policy (CAP). The Europe 2020 CAP Framework defines new rules for farmers and targets on innovation, resource efficiency, economic viability, and environmental sustainability. Given the continual evolution of the CAP, it is relevant to focus on sustainable agriculture and which indicators can be employed to aid our understanding of the future farming strategies. This study examines the relationship between perceived sustainability and future farming strategies for three different commodities: sugar beet, dairy, and feta cheese. Survey data collected between 2017-2018 from 191 Belgian sugar beet farmers, 524 dairy farmers (from UK, Denmark, France, and Latvia), and 150 Greek sheep and goat farmers producing milk for feta cheese were analysed using multinomial logistic regressions. Our results show that the farmers' attitude towards sustainability affects intentions to implement specific farming strategies. Belgian sugar beet farmers who perceive their supply chain arrangements (SCAs) environmentally sustainable are less likely to reduce the scale of their farms' operations rather than to maintain them. Dairy farmers are more likely to change the existing scale than to maintain scale if they perceive that production choices affect environmental sustainability to a higher extent. Dairy farmers who perceive their SCAs economically sustainable are less likely to abandon farming. Greek sheep and goat farmers who perceive their SCAs economically sustainable are more likely to expand the existing scale. The observed differences at commodity-level show the importance of well targeted policy measures towards more sustainable farming systems in the European Union.