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Cooperatives' shares in farm industries: Organizational and policy factors

Author

Listed:
  • Richard E. Caves

    (Harvard University)

  • Bruce C. Petersen

    (Assistant Professor of Economics, Northwestern University)

Abstract

Cooperatives compete in farm-supply and marketing industries with investor-owned enterprises. Cooperatives' shares should depend on their distinctive organization: dealing “at cost” with members whose equities are tied to their current transactions with the cooperative. We show how this ownership structure affects cooperatives' activities and investment decisions, how it interacts with the public policies affording cooperatives special tax and antitrust status, and what these factors together imply for cooperatives' market shares and the extent of their vertical integration. Available data permit only informal tests of these predictions, but the evidence seems to confirm them strongly.

Suggested Citation

  • Richard E. Caves & Bruce C. Petersen, 1986. "Cooperatives' shares in farm industries: Organizational and policy factors," Agribusiness, John Wiley & Sons, Ltd., vol. 2(1), pages 1-19.
    • Handle: RePEc:wly:agribz:v:2:y:1986:i:1:p:1-19
    DOI: 10.1002/1520-6297(198621)2:1<1::AID-AGR2720020102>3.0.CO;2-0
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    References listed on IDEAS

    as
    1. Jensen, Michael C & Meckling, William H, 1979. "Rights and Production Functions: An Application to Labor-managed Firms and Codetermination," The Journal of Business, University of Chicago Press, vol. 52(4), pages 469-506, October.
    2. Pinhas Zusman, 1982. "Group Choice in an Agricultural Marketing Co-operative," Canadian Journal of Economics, Canadian Economics Association, vol. 15(2), pages 220-234, May.
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    5. R. Carson, 1977. "A Theory of Co-operatives," Canadian Journal of Economics, Canadian Economics Association, vol. 10(4), pages 565-589, November.
    6. Andrew McGregor, 1977. "Rent Extraction and the Survival of the Agricultural Production Cooperative," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(3), pages 478-488.
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    Citations

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    Cited by:

    1. Deininger, Klaus, 1995. "Collective agricultural production: A solution for transition economies?," World Development, Elsevier, vol. 23(8), pages 1317-1334, August.
    2. George Hendrikse & Li Feng, 2013. "Interfirm cooperatives," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 26, Edward Elgar Publishing.
    3. Yuanyuan Peng & H. Holly Wang & Yueshu Zhou, 2022. "Can cooperatives help commercial farms to access credit in China? Evidence from Jiangsu Province," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(4), pages 325-349, December.
    4. Yuling Gao & Zuhui Huang & Qiao Liang, 2018. "Service Realization And Determinants In Agricultural Cooperatives In China: Evidence From Zhejiang, Sichuan And Heilongjiang Provinces," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1205-1225, December.
    5. Bhuyan, Sanjib & Royer, Jeffrey S., 1992. "Cooperative Incentives for Vertical Integration: The Bilateral Monopoly Case," 1992 Annual Meeting, August 9-12, Baltimore, Maryland 271391, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Dan Yang & Zimin Liu, 2012. "Study on Chinese farmer cooperative economy organization and agricultural specialization," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(3), pages 135-146.
    7. Han, Saim Woo, 1992. "A production and pricing decision model for the Korean agricultural cooperatives," ISU General Staff Papers 1992010108000010995, Iowa State University, Department of Economics.
    8. Hailu, Getu & Goddard, Ellen W. & Jeffrey, Scott R., 2005. "Do Decision Makers' Debt-risk Attitudes Affect the Agency Costs of Debt?," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 6, pages 1-18, May.
    9. Hailu, Getu & Jeffrey, Scott R. & Goddard, Ellen W., 2004. "Impact Of Decision Makers Divergence In Risk Attitudes And Perceptions On Co-Operative Management In Canada," 2004 Annual meeting, August 1-4, Denver, CO 20246, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Royer, Jeffrey S., 2012. "Implications of the Cooperative Organizational Form for Vertical Expansion," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2), pages 1-20.
    11. Cook, Michael L., 1994. "The Role of Management Behavior in Agricultural Cooperatives," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 9, pages 1-17.
    12. Royer, Jeffrey S. & Bhuyan, Sanjib, 1993. "Formula Price Contracts as an Alternative to Forward Integration by Farmer Cooperatives," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 8, pages 1-11.

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