Farmers’ Satisfaction and Intention to Continue as Members of Agricultural Marketing Co-operatives: A Test of the Neoclassical and Transaction Costs Theories

Agricultural marketing co-operatives are one among a myriad of options that farmers have to market their products, making survival of the co-operative formula to depend on its capability to compete for the farmers’ satisfaction and membership. This research uses Neoclassical Theory and Transaction Costs Theory to propose a number of antecedents of the farmers’ satisfaction with the co-operative and their intention to remain members in the long term. With data obtained from a sample of 320 producers of fruits and vegetables, members of agricultural marketing cooperatives operating in the fresh fruit and vegetable chain, the results obtained show that 1) the liquidation price is more important to predict the farmers’ satisfaction with the co-operatives than their intention to remain members; 2) transaction costs are important to explain satisfaction and to a larger degree the intention to continue the relationship with the co-operatives; and 3) that liquidation price is more effective upon satisfaction and continuity if transaction costs are lower.