Enhancing environmental performance is a prospective way for increasing market inclusion, effectiveness and sustainability of small-scale farms in Eastern Europe and Central Asia. Nevertheless, with very few exceptions there are no studies on forms, factors and efficiency of ‘eco-driven’ market inclusion of smallholders in modern supply chains in Bulgaria. This paper presents the findings of a first large-scale study on state, driving forces, and efficiency of market inclusion of farms through enhanced eco-management in Bulgaria. First, we identify diverse forms of eco-management in farms with different sizes, market orientation, product specialization, and location. Second, we assess costs, effects, and efficiency of eco-management, including the extent it contributes to increased market inclusion of farms. Third, we specify critical personal, economic, contractual, institutional, etc., factors of managerial choice in the eco-active farms. Finally, we estimate perspectives of expansion of this particular mode of market inclusion, and suggest directions for improving public policies and business strategies of smallholders.

Enhancing environmental performance is a prospective way for increasing market inclusion, effectiveness and sustainability of small-scale farms in Eastern Europe and Central Asia and around the globe (Harris et al., 2001; Perez-Aleman, 2008; Taylor, 2008; Bitzer et al., 2009; Sharma et al., 2009; Vorley et al., 2009; Bachev, 2011a; Biénabe et al., 2011; Guidi, 2011; Torero, 2011; Murphy, 2012; Prato and Longo, 2012; Marscheke and Wilkings, 2014; and Silva et al., 2014). Eco-management improvement has been driven by market demands, requirements of vertical counterparts (suppliers, processors, retailers, exporters), institutional restrictions and opportunities (official eco-standards, public support measures), private initiatives and collective actions of farmers (professional codes of behavior), etc.

With very few exceptions (Bachev, 2011b and 2014), there are no studies on forms, factors and efficiency of ‘eco-driven’ market inclusion of smallholders in modern supply chains in Bulgaria.

Supply Chain Management Journal, Market Inclusion, Eco-Management, Environmental Management, environment-friendly agriculture, nongovernmental organization, Bulgarian Farms.