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The Pro-Competitive Effect of Coffee Cooperatives in Chiapas, Mexico

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  • Milford Anna B.

    (Norwegian Agricultural Economics Research Institute)

Abstract

Imperfect competition among purchasers of coffee is a common problem for small scale producers. Producer-owned marketing cooperatives can reduce the market power of private purchasers and restore competition. Non-members as well as members of the cooperatives will then receive higher prices. In the present paper I carry out a theoretical and an empirical investigation into the effect of Fairtrade and organically certified cooperatives on local competition and coffee prices in Chiapas, Mexico. A theoretical model is presented which explains how the competitive effect may work in this particular setting, where cooperative membership implies certain costs that are perceived differently by different producers. Also, using both qualitative and quantitative methods, I present evidence that is consistent with the hypothesis of a pro-competitive effect of cooperatives.

Suggested Citation

  • Milford Anna B., 2012. "The Pro-Competitive Effect of Coffee Cooperatives in Chiapas, Mexico," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-29, March.
    • Handle: RePEc:bpj:bjafio:v:10:y:2012:i:1:n:2
    DOI: 10.1515/1542-0485.1362
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    References listed on IDEAS

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    Cited by:

    1. Qiao Liang & Xinxin Wang, 2020. "Cooperatives as competitive yardstick in the hog industry?—Evidence from China," Agribusiness, John Wiley & Sons, Ltd., vol. 36(1), pages 127-145, January.
    2. Kumse, Kaittisak & Suzuki, Nobuhiro & Sato, Takeshi & Demont, Matty, 2021. "The spillover effect of direct competition between marketing cooperatives and private intermediaries: Evidence from the Thai rice value chain," Food Policy, Elsevier, vol. 101(C).
    3. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    4. Liang, Qiao & Hendrikse, George, 2016. "Pooling and the yardstick effect of cooperatives," Agricultural Systems, Elsevier, vol. 143(C), pages 97-105.
    5. Nilsson, Jerker & Helgesson, Matilda & Rommel, Jens & Svensson, Ellinor, 2020. "Forest-owner support for their cooperative's provision of public goods," Forest Policy and Economics, Elsevier, vol. 115(C).
    6. Yildiz, Özgür & Rommel, Jens & Debor, Sarah & Holstenkamp, Lars & Mey, Franziska & Müller, Jakob R. & Radtke, Jörg & Rognli, Judith, 2014. "Research Perspectives on Renewable Energy Cooperatives in Germany: Empirical Insights and Theoretical Lenses," MPRA Paper 55931, University Library of Munich, Germany.
    7. Kjetil Bjorvatn & Anna B. Milford & Lars Sørgard, 2015. "Farmers, Middlemen and Exporters: A Model of Market Power, Pricing and Welfare in a Vertical Supply Chain," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 31-44, February.
    8. Hanisch, Markus & Rommel, Jens & Mueller, Malte, 2012. "Variation In Farm Gate Milk Prices And The Cooperative Yardstick Revisited – Panel Evidence From The European Dairy Sectors," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137138, German Association of Agricultural Economists (GEWISOLA).

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