ABSTRACT
Parmigiano Reggiano is a doubtlessly quality-oriented, sustainable agri-food. This section makes use of the theoretical background provided in previous chapters to show (1) why the production is managed and organized in a consortium, seen as an efficient transaction costs minimizing governance structure and (2) how economic efficiency of the organization, food quality, and environmental sustainability can self-enforce and cause no trade-off in the case of Parmigiano Reggiano. Those questions are addressed with the theoretical framework of TCE. TCE provides a rigorous theoretical framework for addressing two main questions: (1) Why do Parmigiano Reggiano Consortium and associated producers invest in excellence and quality? (2) How to organize and manage sustainable and quality-based agri-food sectors? Transaction costs mostly derive from uncertainty (markets with asymmetric information about the product quality; wheels aging); complexity (certification; monitoring of reputation and respect of quality standards), and asset specificity (brand name capital and high site asset specificity). These variables increase TC, benefitting from the “unicity” of the product and for the requirement to keep the quality standards. This affects the TC and the related organization of the transactions within the Consortium. In addition, by regulating quality the Consortium also preserves the sustainability. The Consortium is a TC-minimizing and environmentally sustainable governance structure.
