Premium
Theory and Practice of Multi‐Product Farms: Farm Butcheries in Umbria
Author(s) -
Ventura Flaminia,
Milone Pierluigi
Publication year - 2000
Publication title -
sociologia ruralis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.005
H-Index - 84
eISSN - 1467-9523
pISSN - 0038-0199
DOI - 10.1111/1467-9523.00160
Subject(s) - product (mathematics) , scope (computer science) , production (economics) , transaction cost , business , economies of scope , capital (architecture) , agricultural science , economics , industrial organization , geography , marketing , microeconomics , finance , geometry , mathematics , environmental science , archaeology , computer science , economies of scale , programming language
This paper addresses the phenomenon of the on‐farm butcher shops that have become increasingly important in the Central Italian region of Umbria over the last decade. Theoretically, farm butcheries are analyzed as multi‐product farms that vertically integrate the primary production, processing and retailing of (mainly)beef and that considerably reduce the cost of each unit produced by jointly producing two or more interrelated goods or services. The practical value of farm butcheries lies in the preservation and valorization of the localChianina cattle breed and of local resources in general, including social capital and landscape. Farm butcheries contribute to an endogenous type of rural development with major macro‐economic returns and the case exemplifies the central position of the multifunctional farm in the renewal of the European countryside. The economic success of farm butcheries is explained in terms of the reduction of economic transaction costs and the achievement of economies of scope. The main conclusion of the paper is that the specificity of assets results in substantial competitive advantages for the organizational form of the multi‐product farm in processes of rural development.