Farmers are at the source end of the agricultural value chain. Usually, many farmers are faced by a small number of firms demanding their products – the processing industry, retail, increasingly also energy producers (bioenergy, biofuels) and chemical industry (bio-based materials). There is a significant imbalance in market power against farmers.
In Germany and elsewhere, farmers increasingly have direct relationships to consumers, without the intermediation by retailers. This mostly happens via farm shops (German: Hofläden), community-supported agriculture, but also agritourism.
The relationship between farmers and the state is twofold: on the one hand, they are a powerful influence group, especially through farmers’ association (in Germany particularly the Deutscher Bauernverband, DBV), who act in political processes as lobby groups on their behalf. On the other hand, farmers are ‘receivers’ of a large number of rules, regulations and incentives that limit or at least modify their operational option space. An important intermediary group is advisors and extension services, which can be very differently organized (public, private, non-profit; Knierim et al. 2017). They support farmers with achieving both private and public goals.