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Bargaining Associations in Grower-Processor Markets for Fruits and Vegetables

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  • Iskow, Julie
  • Sexton, Richard

Abstract

Fruit and vegetable bargaining associations representing 36 commodities have an average market share of 60 percent and an average membership of 310 growers. In addition to raw product price, the terms of trade most frequently bargained for are “time and method of payment” and “quality standards.” The buying industries faced by growers appear to be quite concentrated. Forty percent of the associations reported having less than five processors in their market area, and 67 percent indicated that the four largest processors purchase more than 75 percent of their association’s production. Higher prices and more stable prices were the most frequently cited objectives of the participating associations. Lack of volume control and failure to get adequate membership were reported as the most common obstacles encountered by associations in achieving their objectives. Limited alternatives are available if bargaining fails. The most frequently cited course of action was to take legal action to enforce “good faith bargaining” laws where applicable.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:urdbrr:279811
    DOI: 10.22004/ag.econ.279811
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    References listed on IDEAS

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    1. 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.
    2. E. M. Babb & S. A. Belden & C. R. Saathoff, 1969. "An Analysis of Cooperative Bargaining in the Processing Tomato Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(1), pages 13-25.
    3. Biggs, Gilbert W., 1982. "Status of Bargaining Cooperatives," Research Reports 312961, United States Department of Agriculture, Rural Development.
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    Cited by:

    1. Griffith, G.R., 2000. "Competition in the Food Marketing Chain," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 171911, Australian Agricultural and Resource Economics Society.
    2. Marcus, Gerald D. & Frederick, Donald A., 1994. "FARM BARGAINING COOPERATIVES: Group Action, Greater Gain," Research Reports 279983, United States Department of Agriculture, Rural Development.
    3. Torgerson, Randall E. & Reynolds, Bruce J. & Gray, Thomas W., 1990. "Evolution of Cooperative Thought, Theory and Purpose," Cooperatives: Their Importance in the Future Food and Agricultural System - FAMC 1990 Conference 265908, Food and Agricultural Marketing Consortium (FAMC).
    4. Edward Oczkowski, 2006. "Nash Bargaining And Co‐Operatives," Australian Economic Papers, Wiley Blackwell, vol. 45(2), pages 89-98, June.
    5. 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.
    6. Griffith, Garry R., 2000. "Competition in the food marketing chain," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(3), pages 1-35.
    7. Salas, Paula Cordero, 2012. "Does Contract Enforcement Limit the Distribution of Bargaining Power? An Experimental Study," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124503, Agricultural and Applied Economics Association.
    8. Jiaoju Ge & Alfonso Flores-Lagunes & Kilmer, 2015. "An analysis of bargaining power for milk cooperatives and milk processors in Florida," Applied Economics, Taylor & Francis Journals, vol. 47(48), pages 5159-5168, October.
    9. 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.
    10. Jos Bijman Jan Brusselaers & Krijn Poppe & Tomas Garcia Azcarate, 2014. "Dp Policy Measures Impact the Position and Performance of Farmers' Cooperatives in the EU?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(4), pages 531-553, December.
    11. Mahesh Nagarajan & Yehuda Bassok, 2008. "A Bargaining Framework in Supply Chains: The Assembly Problem," Management Science, INFORMS, vol. 54(8), pages 1482-1496, August.
    12. Lang, Mahlon & Swank, Chuck & Franklin, Donald K. & Torgerson, Randall & Welty, John, 1994. "Agricultural Bargaining: In a Competitive World," Service Reports (SR) 280692, United States Department of Agriculture, Rural Development.
    13. 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.
    14. Chin, Ming-Chin & Weaver, Robert D., 2004. "Forward Contracting Specification Through Collective Bargaining," 2004 Annual meeting, August 1-4, Denver, CO 20006, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Banaszak, Ilona & Beckmann, Volker, 2010. "Compliance with Rules and Sanctions in Producer Groups in Poland," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 38(1), pages 1-15.
    16. Cordero Salas, Paula, 2016. "Relational Contracts and Product Quality: The Effect of Bargaining Power on Efficiency and Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-19.

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    Keywords

    Crop Production/Industries; Marketing;

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