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Avoiding Double Marginalisation in Agro-Food Chains

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  • Giraud-Heraud, Eric
  • Soler, Louis-Georges
  • Tanguy, Herve

Abstract

This paper proposes a model for vertical relationships in several agribusiness sectors for which differences in terms of quality exist in the end-market. Intermediaries justify their position on the grounds of their exclusive access to a market segment (high quality), whereas producers retain the right to supply the low-quality market directly. Our model takes into account the diversity of consumers' tastes, and a possible extra marketing cost for direct access to the market by the producer. We demonstrate that when the producer can commit in advance to supplying the available capacity in full, then in certain conditions the efficiency of a vertically integrated sector can be restored (level of production and allocation to qualitative segments). Copyright 1999 by Oxford University Press.

Suggested Citation

  • Giraud-Heraud, Eric & Soler, Louis-Georges & Tanguy, Herve, 1999. "Avoiding Double Marginalisation in Agro-Food Chains," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(2), pages 179-198, June.
    • Handle: RePEc:oup:erevae:v:26:y:1999:i:2:p:179-98
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    Citations

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    Cited by:

    1. Eric Giraud-Héraud & Yves Surry, 2001. "Les réponses de la recherche aux nouveaux enjeux de l’économie viti-vinicole," Post-Print hal-01200932, HAL.
    2. Jean-Marc Callois, 2006. "Quality labels and rural development : a new economic geography approach," Post-Print hal-01201116, HAL.
    3. Gaucher, Séverine & Soler, Louis-Georges & Tanguy, Hervé, 2002. "Incitation à la qualité dans la relation vignoble-négoce," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 62.
    4. Jean-Marc Callois, 2006. "Quality labels and rural development : a new economic geography approach," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 78, pages 31-51.
    5. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    6. Séverine Gaucher & Louis-Georges Soler & Hervé Tanguy, 2002. "Incitation à la qualité dans la relation vignoble-négoce," Post-Print hal-01200937, HAL.
    7. Giraud-Héraud, Eric & Surry, Yves, 2001. "Les réponses de la recherche aux nouveaux enjeux de l’économie viti-vinicole," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 60, pages 1-5.
    8. Giraud-Héraud Eric & Yves Surry, 2001. "Les réponses de la recherche aux nouveaux enjeux de l’économie viti-vinicole," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 60, pages 5-24.
    9. Smith, David & Trant, Michael, 2002. "Performance in the Food Retailing Segment of the Agri-Food Chain," Agriculture and Rural Working Paper Series 28028, Statistics Canada.
    10. Olmos, Marta Fernández & Grazia, Cristina & Perito, Maria Angela, 2011. "Quality and Double Sided Moral Hazard in Share Contracts," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(1).
    11. Olivier Saulpic & Hervé Tanguy, 2004. "Comment la structure financière influence-t-elle les choix stratégiques ? Étude de cas dans l'industrie du vin," Économie rurale, Programme National Persée, vol. 281(1), pages 39-58.
    12. Callois, Jean-Marc, 2006. "Quality labels and rural development : a new economic geography approach," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 78.
    13. Olmos, Marta Fernandez & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "On the co-existence of spot and contract markets: an analysis of quality," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6082, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Vickner, Steven S. & Davies, Stephen P. & Fulton, Joan R. & Vantreese, Valerie L., 2000. "Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 31(2), pages 1-13, July.
    15. Séverine Gaucher & Louis-Georges Soler & Hervé Tanguy, 2002. "Incitation à la qualité dans la relation vignoble-négoce," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 62, pages 7-40.
    16. Olmos, Marta Fernandez & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "The yield/quality trade-off and contractual choice," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6065, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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