The aim of this research was to provide a better understanding of factors influencing the performance of (small) agricultural producers. Considering the importance of agricultural producers, not just for maintaining a steady supply of products but also for the preservation of the population (and cultural tradition) of rural areas, the development of sustainable agricultural business is a matter of public interest. This paper considers wine producers and their market channels, i.e., the factors

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... nfluencing the relationship between wine producers and market intermediaries, by applying ideas taken from agency theory. We developed a conceptual model with our defined measure of agency costs as the mediator variable between multiple regressors and the firms' financial and non-financial performance as regressions. We used the approach of Baron and Kenny to investigate whether agency costs act as a mediator variable. The data needed to test the proposed conceptual model were collected through questionnaires and contextual interviews with the Croatian wine producers (n = 124). We found that more self-reliance in the distribution process, supported by factors related to the bargaining strength, had a positive influence on wine producers' performance. The results also support the assumption that agency costs act as a full mediator variable between a producer's attributes and its performance.