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Exploring the Sustainability of the Cooperative Model in Dairy: The Case of the Netherlands

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  • Jos Bijman

    (Business Management & Organisation Group, Department of Social Sciences, , Wageningen University, Wageningen, 6706KN, The Netherlands)

Abstract

Dairy cooperatives have existed in the Netherlands for more than 130 years. They hold a joint market share of more than 80% since the 1950s. This suggests that cooperatives are durable organizations in the dairy industry of the Netherlands. However, the number of dairy cooperatives has declined tremendously, with only five processing cooperatives left in 2015. The paper explores the paradox of high cooperative market share over a long period of time with a steady decline in the number of cooperatives. This historical account of the Dutch dairy industry distinguishes four periods of cooperative evolution. Classical theoretical explanations for the existence of cooperatives, such as bargaining power and transaction costs economics, can explain the rise of dairy cooperatives. However, they cannot sufficiently explain the long term success of the cooperative model in the Dutch dairy industry. Additional explanations can be found in institutional theory, including the impact of an enabling institutional environment.

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  • Jos Bijman, 2018. "Exploring the Sustainability of the Cooperative Model in Dairy: The Case of the Netherlands," Sustainability, MDPI, vol. 10(7), pages 1-15, July.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2498-:d:158394
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    References listed on IDEAS

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    1. Jos Bijman & Markus Hanisch & Ger Sangen, 2014. "Shifting Control? The Change of Internal Governance in Agricultural Cooperatives in the EU," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(4), pages 641-661, December.
    2. Abigail M. Hind, 1999. "Co‐operative Life Cycle and Goals," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 536-548, September.
    3. Alessandro Bonanno & Carlo Russo & Luisa Menapace, 2018. "Market power and bargaining in agrifood markets: A review of emerging topics and tools," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 6-23, December.
    4. Frenken, Koen, 2014. "The evolution of the Dutch dairy industry and the rise of cooperatives: a research note," Journal of Institutional Economics, Cambridge University Press, vol. 10(1), pages 163-174, March.
    5. Condon, Andrew M. & Cotterill, Ronald W. & Rhodes, V. James & Shaffer, James D. & Staatz, John M., 1987. "Cooperative Theory: New Approaches," Service Reports (SR) 280614, United States Department of Agriculture, Rural Development.
    6. Jo H.M. Wijnands & Jos Bijman & Tanja Tramnitzke, 2017. "Analyses of the functioning of Milk Package provisions as regards producer organisations and collective negotiations," JRC Research Reports JRC107880, Joint Research Centre.
    7. George Hendrikse & Jos Bijman, 2002. "Ownership Structure in Agrifood Chains: The Marketing Cooperative," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 104-119.
    8. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    9. Valentinov, Vladislav, 2007. "Why are cooperatives important in agriculture? An organizational economics perspective," Journal of Institutional Economics, Cambridge University Press, vol. 3(1), pages 55-69, April.
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    Cited by:

    1. Elena Meliá‐Martí & Deolinda Meira & José Corberá Martínez & Rui Bertuzi, 2023. "Cross‐border cooperation: A response to the challenges facing agri‐food cooperatives in Southern European countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 981-1006, September.
    2. Jorge Luis Sánchez-Navarro & Narciso Arcas-Lario & Jos Bijman & Miguel Hernández-Espallardo, 2024. "The role of agricultural cooperatives in mitigating opportunism in the context of complying with sustainability requirements: empirical evidence from Spain," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 12(1), pages 1-24, December.
    3. Josefina Fernandez-Guadaño & Manuel Lopez-Millan & Jesús Sarria-Pedroza, 2020. "Cooperative Entrepreneurship Model for Sustainable Development," Sustainability, MDPI, vol. 12(13), pages 1-11, July.
    4. Constantine Iliopoulos & Vladislav Valentinov, 2018. "Cooperative Longevity: Why Are So Many Cooperatives So Successful?," Sustainability, MDPI, vol. 10(10), pages 1-8, September.
    5. Samal Kaliyeva & Francisco Jose Areal & Yiorgos Gadanakis, 2020. "Attitudes of Kazakh Rural Households towards Joining and Creating Cooperatives," Agriculture, MDPI, vol. 10(11), pages 1-20, November.
    6. Gea D.M. Wijers, 2019. "A comparison of cooperative ecosystems: what institutions can bring transformation?," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 18(2), pages 146-159, December.
    7. Iliopoulos, Constantine & Valentinov, Vladislav, 2018. "Cooperative longevity: Why are so many cooperatives so successful?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10(10), pages 1-8.
    8. Jos BIJMAN & Markus HANISCH, 2020. "Understanding the heterogeneity among agricultural cooperatives," CIRIEC Working Papers 2013, CIRIEC - Université de Liège.
    9. Xuesong Li & Yunlong Ding & Yuxuan Li, 2019. "M-Government Cooperation for Sustainable Development in China: A Transaction Cost and Resource-Based View," Sustainability, MDPI, vol. 11(7), pages 1-17, March.
    10. Bo Wang & Po-Yuan Cheng & Brian Lee & Lih-Chyun Sun & Hung-Hao Chang, 2019. "Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan," Sustainability, MDPI, vol. 11(18), pages 1-12, September.
    11. Annemarie Groot-Kormelinck & Jos Bijman & Jacques Trienekens & Laurens Klerkx, 2022. "Producer organizations as transition intermediaries? Insights from organic and conventional vegetable systems in Uruguay," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 39(4), pages 1277-1300, December.
    12. Jasper Grashuis, 2021. "A price premium for the farmer‐owned label? A choice experiment with milk consumers in the Netherlands," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 749-763, October.

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