The benefits of benchmarking
DCA-Markets
makes different quotations or reference prices. We make quotations for example of
dairy products but also for potatoes, onions, pork, manure, etc.
Parties can
benefit from this because they have insight in the price formation process, the
price level and the spread of prizes. This insight is for individual parties
often difficult to gain and only at high "search costs.". Smaller
parties also have more here trouble with this than larger ones. Disclosure of
that information ensures that fewer costs are incurred and that parties can
negotiate more equally, so that, from a macroeconomic perspective, there is
more efficient pricing and better allocation of goods.
That is why
the EU Commission Veerman advised that there should be more transparency in
agriculture. Because this is good for the sector as a whole and farmers in
particular because they are the once who have a information backlog.
Another
advantage of quotations and that also true for the larger parties is that they
can serve as a benchmark.
Parties can
compare themselves with the market (benchmark) and see where they are doing
better or where there is room for improvement. The latter point ensures
innovation and a culture of constant improvement. Parties that benchmark are
the "out performers" of the near future.
Governments
are therefore increasingly focusing on price transparency and benchmarking.
This is done explicitly from the EU and in the field of agricultural markets.
Exactly as former Minister Veerman advised the EU in 2016. You can read more about
this in an earlier article from DCA-Markets: DCA-Markets:
the-consequences-of-eu price transparency policy
(https://www.dca-markten.nl/nieuws/artikel/46/de-gevolgen-van-het-euprijstransparantiebeleid).
Are you
curious how we as DCA approach and guide the above? Or would you like to ‘spar’
with us about it using benchmarks in your "supply chain". Then call
0320 269 523 or mail to contact@dca-markets.com.