Characterizing Producer Organizations: The case of organic versus conventional vegetables in Uruguay

Producer organizations (POs) are considered important for rural development in developing and transition countries. Scientific studies on POs mostly focus on their impact, but do not distinguish among different types. However, POs are a heterogeneous group. This paper explores the organizational characteristics that distinguish POs in the vegetables sector of Uruguay. In comparing organic and conventional vegetables chains, we have identified five types of POs and we have investigated their distinct organizational characteristics. We found, first, that POs in the organic value chain are responding to market incentives, whereas POs in the conventional value chain are responding to public incentives. Second, contrary to POs with a focus on social and political activities, POs with economic activities are small, they have a product focus, they require member investment, and they have a high formalization status. Third, POs with output-driven objectives have higher levels of horizontal and vertical coordination than POs with value-driven objectives. Our study contributes to the increasing body of literature on the internal and external conditions that explain the diversity of POs in developing and transition countries.