A Framework for Vertical and Horizontal Supply Chain Integration in Cooperatives: COPAG Case

Agro-food supply chain integration plays a growingly important role in the stable and sustainable development of agriculture. However, it is challenging for core firms to integrate the small-scale cooperatives and scatted farmers due to complex transaction processes and volatile relationships. Agricultural co-operatives are organizations that unite farmers’ power and help them achieve economic benefits. As a result, Agricultural cooperatives requires constantly researching new methods and strategies to make their operations sustainable. This study analyzes how COPAG, Morocco’s largest dairy cooperative, leverages vertical and horizontal integration to enhance supply chain resilience, market access, and socioeconomic equity for smallholder farmers. Drawing on empirical fieldwork from previous studies, the research evaluates COPAG’s dual integration model: vertically controlling milk production, processing, and distribution while horizontally partnering with smaller cooperatives to pool resources and negotiate collectively. Using mixed methods—including interviews with COPAG managers, annual reports and policy documents—the study reveals that vertical integration reduced post-harvest losses through centralized quality control and stabilized farmer incomes via fixed-price contracts. Horizontal integration diversified revenue streams, enabling collective bargaining power and bulk procurement of inputs, which lowered costs. Membership in COPAG increased farmer incomes with smallholders transitioning to medium/large-scale operations through access to shared infrastructure and training programs.