Paper info

Modelling buyer-seller relationships in agribusiness in South East Asia

Peter J. Batt

The paper was published at the 16th IMP-conference in Bath, U.K in 2000.

A model of buyer-seller relationships is developed to explain the nature of the long-termrelationships between Filipino potato farmers and their seed suppliers. Relational satisfactionis derived from the seed supplier's offer quality (seed quality, delivery intent and competitiveprice), relationship specific investments (adaptations, communication, education and trainingand reciprocal buying) and a reduction in uncertainty in the seed supply market. However,rather than satisfaction leading to trust, satisfaction has a more direct impact on a potatofarmer's desire to maintain a long-term relationship. Nevertheless, in the absence of a formalseed certification system and the nature of the long-term credit arrangements that often existbetween farmers and seed suppliers, including reciprocal purchasing arrangements, trustremains a key relationship building variable. Fortuitously, seed suppliers have an opportunityto build trust with potato farmers through making relationship specific investments.