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Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector

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  • Johannes Sauer
  • Matthew Gorton
  • John White

Abstract

Drawing on survey data, this paper identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova and Ukraine). We apply a multi-level modeling approach, specifically a bootstrapped and selectivity bias corrected mixed-effects linear regression model. The analysis suggests three main strategies for farmers to improve the price received for their output: consolidation, cooperation and stable supply chain relationships. While selling through a marketing cooperative has a significant and positive effect on farm gate milk prices, the majority of non-members are reluctant to join. The size of dairy operations, trust and contracting also impact positively on the prices received by farmers. Policy implications are drawn. Basierend auf Umfragedaten identifiziert diese Studie Faktoren für eine Variation im Rohmilchpreis für verschiedene CIS Staaten (Armenien, Moldawien und die Ukraine). Es wird ein multi-level Modellierungsansatz verwandt in der Form eines mixed-effects Regressionsmodells unter Berücksichtigung eines möglichen Sampleselektionsfehlers (sample selection bias). The Analyse zeigt die folgenden Strategien für eine mögliche Realisierung eines höheren Rohmilchpreises auf: Konsolidierung, Kooperation und stabile Supply Chain Beziehungen. Während der Verkauf über Marketingkooperative einen signifikanten und positiven Effekt auf den Rohmilchpreis aufweist, ist die Mehrheit der Nichtmitglieder nicht zu einem Beitritt bereit. Die Betriebsgrösse, Vertrauen sowie vertragliche Bindungen zeigen ebenso einen positiven Einfluss auf den vom Milchbauern erzielten Absatzpreis. Entsprechende Politikimplikationen werden formuliert.
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  • Johannes Sauer & Matthew Gorton & John White, 2012. "Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector," Agricultural Economics, International Association of Agricultural Economists, vol. 43(2), pages 165-177, March.
    • Handle: RePEc:bla:agecon:v:43:y:2012:i:2:p:165-177
    DOI: j.1574-0862.2011.00574.x
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    3. Petrick, Martin & Götz, Linde, 2017. "The expansion of dairy herds in Russia and Kazakhstan after the import ban on Western food products," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 261996, German Association of Agricultural Economists (GEWISOLA).
    4. Petrick, Martin & Götz, Linde, 2019. "Herd growth, farm organisation and subsidies in the dairy sector of Russia and Kazakhstan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 70(3), pages 789-811.
    5. Evert Los & Cornelis Gardebroek & Ruud Huirne, 2021. "Explaining output price heterogeneity in Dutch horticulture," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 891-914, October.
    6. Hanisch Markus & Rommel Jens & Müller Malte, 2013. "The Cooperative Yardstick Revisited: Panel Evidence from the European Dairy Sectors," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 151-162, December.
    7. Otsuka, Keijiro & Ali, Mubarik, 2020. "Strategy for the development of agro-based clusters," World Development Perspectives, Elsevier, vol. 20(C).
    8. Sauer, Johannes & Latacz-Lohmann, Uwe, 2012. "Efficient Innovation in Dairy Production - Empirical Findings for Germany," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137386, German Association of Agricultural Economists (GEWISOLA).
    9. Hanisch, Markus & Rommel, Jens & Mueller, Malte, 2012. "Variation In Farm Gate Milk Prices And The Cooperative Yardstick Revisited – Panel Evidence From The European Dairy Sectors," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137138, German Association of Agricultural Economists (GEWISOLA).
    10. Hao, Jinghui & Heerink, Nico & Heijman, Wim & Bijman, Jos, 2017. "Cooperatives Membership And Smallholder Farmers’ Welfare - Evidence From Shaanxi And Shandong Provinces, China," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260914, European Association of Agricultural Economists.
    11. Sauer, J. & Latacz-Lohmann, Uwe, 2013. "Efficient Innovation in Dairy Production - Empirical Findings for Germany," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158865, Agricultural Economics Society.
    12. Federica Di Marcantonio & Enkelejda Havari & Liesbeth Colen & Pavel Ciaian, 2022. "Do producer organizations improve trading practices and negotiation power for dairy farms? Evidence from selected EU countries," Agricultural Economics, International Association of Agricultural Economists, vol. 53(S1), pages 121-137, November.
    13. Fuentes Navarro, E. & Faure, G. & Cortijo, E. & De Nys, E. & Bogue, J. & Gómez, C. & Mercado, W. & Gamboa, C. & Le Gal, P.-Y., 2015. "The impacts of differentiated markets on the relationship between dairy processors and smallholder farmers in the Peruvian Andes," Agricultural Systems, Elsevier, vol. 132(C), pages 145-156.
    14. Malvido Perez Carletti Agustina & Hanisch Markus & Rommel Jens & Fulton Murray, 2018. "Farm Gate Prices for Non-Varietal Wine in Argentina: A Multilevel Comparison of the Prices Paid by Cooperatives and Investor-Oriented Firms," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-14, January.
    15. Getnet, Kindie & Kefyalew, Geremew & Berhanu, Wassie, 2018. "On the power and influence of the cooperative institution: Does it secure competitive producer prices?," World Development Perspectives, Elsevier, vol. 9(C), pages 43-47.
    16. Sauer, J. & Latacz-Lohmann, U., 2013. "Efficient Innovation in Dairy Production – Empirical Findings for Germany," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    17. Sultan, Tursinbek & Wolz, Axel, 2012. "Agricultural Cooperative Development in China and Vietnam since Decollectivization: A Multi-Stakeholder Approach," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2), pages 1-21.

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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P32 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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