THE POSSIBILITIES OF TOTAL QUALITY MANAGEMENT ON FAMILY FARMS
Agricultural Cooperative Development International
Volunteers in Overseas Cooperative Assistance
The demand for guaranteed quality goat milk products has recently increased. Therefore, many farmers and traders seek ways to produce or have these products produced in a great assortment and in good quality.
In Hungary neither the stock nor the traditions of livestock farming are appropriate to economically produce these products.
The following factors should be underlined when talking about the impediments of development:
The areas where there is an interest in farming livestock are mainly the most underdeveloped regions of Hungary. In these regions family economic units have access to limited resources, and this prevents the spreading of capital-intensive technologies. Consequently, only the extensive or semi-intensive technologies are traditional in these areas.
The following factors promote the resolution of these problems:
· The transition of the government policy for subsidizing, which will hopefully enhance the potential for marketable programmes in these regions to apply for funding.
· High prices that can be realized on the market motivate investment. The current prices make it possible to make the additional investments needed to meet the requirements concerning the quality under favourable conditions for profitability.
The objective of the survey
The objective of our survey is to establish economic units which can operate on a family basis and offer alternatives for both owners and farmers to join a regional production-servicing-marketing system. The pre-condition of such a system is that farms produce products of consistent quality through applying the same technology, thus creating trust both among themselves and on the market in their products.
When designing the TQM system, the following issues have been considered:
· providing for quality control;
· the conditions of quality assurance;
· the conditions for profitability;
· the sustainability of the system;
· stable markets for the products.
Goal: marketable model
Eneterprise where the net profit is minimum 100 000 HUF (approx. US$500) / month / two workers from the family
Guarantee for quality products
Forms of marketing channels
Forms of regional
Guaranties of sustainability
Chance of repetition
Model of the developed TQM system:
Results of the examinations
Analysis of the forms of enterprises
The optimum size of the family enterprises is at 40-50 heads (at intensive breeding technology)
Optimized products mix
Development of breeding technology and registration
Possibilities for regional cooperation
Catalogue of external and internal resources and examples of the usage of catalogue
Possibilities of the use of the model:
· enhances marketing opportunities;
· the network owner obtains extra profit without additional investment;
· promotes the establishment of private businesses;
· creation of new jobs at family level;
· improvement of the economy in underdeveloped regions;
· the quality control system provides for producer and the buyer protection;
· promotes introduction of modern management techniques;
· solicits outside resources;
· gives an example for regional cooperation.
Adaptation of the model
The operation mechanism between various organizations involved in the model has been elaborated.
Various patterns of cooperation have been outlined. These patterns also provide information on how much investment is needed as well as on opportunities for putting goods on the market and the relationship with banks.
The developed integration and cooperation system based on the family farms:
· franchise model with credit construction;
· cooperative ( production, marketing, supply);
· vertical and horizontal integration with shared capital investment.
We consider that the profitable production of goat milk products by family farms is feasible. The optimum farm-size is 40-50 female goats, considering the employment of two persons per family.
This farm size provides for the opportunity to economically ensure the conditions for TQM, as the enterprise's after-tax profits on the products produced is 150-200 thousand HUF.
Based on the above, the following statements can be made concerning the use of TQM:
Through the use of TQM
· the access to markets is enhanced;
· the competitiveness of the enterprise is improved;
· the opportunities for cooperation are enhanced;
· a communication channel is created between the producer and the consumer.