Does Financial Power Lead Farmers to Focus More on the Behavioral Factors of Business Relationships with Input Suppliers?

Developments in agriculture is reshaping the agribusiness landscape, altering farms’ bargaining power and strategic positioning within supply chains. These dynamics raise important questions about how financial strength influences farmers’ preferences for different components of business relationships with input suppliers. The primary objective of this study is to examine the relationship between a farm’s financial power and the importance it assigns to the behavioral dimension in such relationships. To address this objective, we employ a two-stage research design. In the first stage, qualitative interviews with farmers were conducted to identify the key attributes contributing to relationship value, encompassing economic, strategic, and behavioral dimensions. In the second stage, a quantitative survey was administered to 249 farmers, supplemented with financial data from the Farm Accountancy Data Network (FADN). The Maximum Difference Scaling (MaxDiff) method was applied to assess the relative importance of these attributes, followed by statistical analysis linking the observed preferences to a composite indicator of financial power. The results indicate that financially stronger farms place greater emphasis on economic factors while attaching less importance to behavioral aspects. Among less financially powerful farms, two distinct patterns emerge: one characterized by opportunistic, price-oriented behavior, and another reflecting a relational orientation that values trust, communication, and long-term cooperation alongside economic conditions. These findings contribute to a better understanding of business relationships in agribusiness by explaining how financial power shapes the trade-off between economic and behavioral components.