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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
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    References listed on IDEAS

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    1. Rogers, Richard T. & Petraglia, Lisa M., 1994. "Agricultural Cooperatives and Market Performance in Food Manufacturing," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 9.
    2. Mark Hayes, 2006. "On the efficiency of fair trade," Review of Social Economy, Taylor & Francis Journals, vol. 64(4), pages 447-468.
    3. Deininger, Klaus, 1995. "Collective agricultural production: A solution for transition economies?," World Development, Elsevier, vol. 23(8), pages 1317-1334, August.
    4. Osborne, Theresa, 2005. "Imperfect competition in agricultural markets: evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 76(2), pages 405-428, April.
    5. Markelova, Helen & Meinzen-Dick, Ruth & Hellin, Jon & Dohrn, Stephan, 2009. "Collective action for smallholder market access," Food Policy, Elsevier, vol. 34(1), pages 1-7, February.
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    Cited by:

    1. 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.
    2. Liang, Qiao & Hendrikse, George, 2016. "Pooling and the yardstick effect of cooperatives," Agricultural Systems, Elsevier, vol. 143(C), pages 97-105.
    3. 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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