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An Essay on Cooperative Bargaining in U.S. Agricultural Markets

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  • Hueth Brent

    (Iowa State University, Ames, Iowa, USA)

  • Marcoul Philippe

    (Iowa State University, Ames, Iowa, USA)

Abstract

We study the incidence and economic rationale for cooperative bargaining in U.S. agricultural markets. Bargaining is not just about increasing price paid to farmers; indeed, there is no empirical research indicating that cooperative bargaining has any direct influence on price. Nevertheless, the price negotiation process may be useful in itself as a form of price discovery in markets where there is uncertainty about market supply and demand conditions, and bargaining associations can play an important role in ensuring contract reliability. These and other benefits must be weighed against the organizational and on-going operational costs of a formal bargaining association when considering whether bargaining is appropriate for a given market environment. Even when the aggregate net benefits associated with bargaining are positive, the distribution of benefits across the various market participants may have an important influence on the political feasibility of bargaining

Suggested Citation

  • Hueth Brent & Marcoul Philippe, 2003. "An Essay on Cooperative Bargaining in U.S. Agricultural Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-15, March.
    • Handle: RePEc:bpj:bjafio:v:1:y:2003:i:1:n:10
    DOI: 10.2202/1542-0485.1020
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    References listed on IDEAS

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    1. Marcus, Gerald D. & Frederick, Donald A., 1994. "FARM BARGAINING COOPERATIVES: Group Action, Greater Gain," Research Reports 279983, United States Department of Agriculture, Rural Development.
    2. United States & Department of & Agriculture & Rural Development, 1980. "Cooperative Farm Bargaining and Price Negotiations," Cooperative Information Reports (CIR) 280498, United States Department of Agriculture, Rural Development.
    3. Thomas Worley & Raymond Folwell & John Foltz & Andrew Jaqua, 2000. "Management of a Cooperative Bargaining Association: A Case in the Pacific Northwest Asparagus Industry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 22(2), pages 548-565.
    4. Iskow, Julie & Sexton, Richard, 1992. "Bargaining Associations in Grower-Processor Markets for Fruits and Vegetables," Research Reports 279811, United States Department of Agriculture, Rural Development.
    5. Brent Hueth & Philippe Marcoul, 2002. "Information Sharing and Oligopoly in Agricultural Markets: The Role of Bargaining Associations," Center for Agricultural and Rural Development (CARD) Publications 02-wp313, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Sabine Duvaleix-Treguer & Carl Gaigné, 2015. "Producer organizations and members performance in hog production," Post-Print hal-02794642, HAL.
    2. Mahesh Nagarajan & Yehuda Bassok, 2008. "A Bargaining Framework in Supply Chains: The Assembly Problem," Management Science, INFORMS, vol. 54(8), pages 1482-1496, August.
    3. Kachel, Yael & Finkelsthain, Israel, 2009. "Antitrust Legislation and Cooperation in Fish Marketing," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2), pages 1-23.
    4. Shaoze Jin & Xiangping Jia & Harvey S. James, 2021. "Risk attitudes within farmer cooperative organizations: Evidence from China's fresh apple industry," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 173-205, June.
    5. Reynolds, Bruce J., 2010. "Choosing to Defect from Cooperation—the 2003 Collapse of California Pear Bargaining," Journal of Cooperatives, NCERA-210, vol. 24, pages 1-20.
    6. Lambare, Pierre & Derville, Marie & You, Gerard, 2018. "Quelles conditions d’accès au marché des éleveurs après les quotas laitiers ?‪," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 364(April-Jun).
    7. Dervillé, Marie & Allaire, Gilles, 2014. "Change of competition regime and regional innovative capacities: Evidence from dairy restructuring in France," Food Policy, Elsevier, vol. 49(P1), pages 347-360.
    8. Valentinov, Vladislav, 2009. "Third sector organizations in rural development: a transaction cost perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 18(1), pages 3-15.
    9. Nagarajan, Mahesh & Sosic, Greys, 2008. "Game-theoretic analysis of cooperation among supply chain agents: Review and extensions," European Journal of Operational Research, Elsevier, vol. 187(3), pages 719-745, June.
    10. Rosa, Franco & Weaver, Robert D. & Vasciaveo, Michela, 2015. "Structural Changes and Dairy Chain Efficiency in Italy," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 6(3), pages 1-21, July.
    11. Katchova, Ani L., 2010. "Agricultural Cooperatives and Contract Price Competitiveness," Journal of Cooperatives, NCERA-210, vol. 24, pages 1-13.
    12. Bodo E. Steiner, 2007. "Negotiated transfer pricing: Theory and implications for value chains in agribusiness," Agribusiness, John Wiley & Sons, Ltd., vol. 23(2), pages 279-292.
    13. Baoubadi Atozou & Lota D. Tamini & Maurice Doyon, 2022. "Bargaining power and risk from substitutability between products attributes the case of specialty eggs in Canada," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 155-169, January.

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