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Vertical Co-ordanitaion in Transition Agriculture: a Hungarian Cooperative Case Study

Author

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  • Imre Ferto

    (Institute of Economics of Hungarian Academy of Sciences)

  • Gabor G. Szabo

    (Institute of Economics of Hungarian Academy of Sciences)

Abstract

The agriculture is traditional risky business, but in transition countries agricultural producers should face some additional difficulties. The agri-food chains are still suffering from underdeveloped market institutions creating severe barriers for price discovery and high transaction costs to co-ordinate market exchanges. Co-operatives are usually neglected as a possible governance structure in recent empirical analyses. This study analyzes the advantages and limitations of cooperatives for establishing an appropriate vertical coordination forms in the framework of transaction cost economics. We present a case study to show that at the recent stage of development in Hungarian agriculture co-operatives can solve some problems arising from missing and embryonic market institutions. We argue that the co-operative is a good example, how an agricultural co-operative can achieve some of the potential advantages, solving many “traditional” TCE and agency problems and serving its members with a continuing growth.

Suggested Citation

  • Imre Ferto & Gabor G. Szabo, 2002. "Vertical Co-ordanitaion in Transition Agriculture: a Hungarian Cooperative Case Study," CERS-IE WORKING PAPERS 0210, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:0210
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    References listed on IDEAS

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    1. Gërdoçi, Blendi & Skreli, Engjell & Imami, Drini, 2016. "Determinants of Sustainable Relationships in the Albanian Apple Production Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 7(1), pages 1-16, February.
    2. Hanf, Jon H. & Török, Timea, 2009. "Are Co-operatives a Way to Integrate Small Farmers in Supply Chain Networks? Preliminary Thoughts on Hungary," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(1), pages 1-12.

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