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The Cooperative Yardstick Revisited: Panel Evidence from the European Dairy Sectors

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  • Hanisch Markus

    ()

  • Müller Malte

    () (Division of Cooperative Sciences, Department of Agricultural Economics, Humboldt-Universität zu Berlin, Berlin 10099, Germany)

  • Rommel Jens

    () (Division of Resource Economics, Department of Agricultural Economics, Humboldt-Universität zu Berlin, Berlin 10099, Germany; Leibniz Institute of Agricultural Development in Central and Eastern Europe, Halle, Germany)

Abstract

Milk is an important agricultural product that has traditionally been processed by cooperatives. Across member states of the EU-27, however, large variation exists between the national market shares of cooperatives in dairy processing. Theoretical models suggest that a strong cooperative sector secures competitive regional prices for agricultural produce. Empirical studies which seek to quantify these effects are rare though. We use panel data to study the impact of cooperative strength – measured by market shares – on national farm gate milk prices in the EU-27 for the period from 2000 to 2010. Our results reveal a positive effect of cooperative market share on price that is relatively large and robust over different specifications of the econometric model. We conclude that dairy cooperatives have a pro-competitive effect and that exemptions for cooperatives from anti-trust regulation may be justified.

Suggested Citation

  • Hanisch Markus & Müller Malte & Rommel Jens, 2013. "The Cooperative Yardstick Revisited: Panel Evidence from the European Dairy Sectors," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 151-162, December.
  • Handle: RePEc:bpj:bjafio:v:11:y:2013:i:1:p:151-162:n:11
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    References listed on IDEAS

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    1. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    2. Staatz, John M., 1989. "Farmer Cooperative Theory: Recent Developments," Research Reports 52017, United States Department of Agriculture, Rural Development Business and Cooperative Programs.
    3. Panos Fousekis, 2011. "Free-on-board and uniform delivery pricing strategies in a mixed duopsony," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(1), pages 119-139, March.
    4. Dieter Pennerstorfer & Christoph R. Weiss, 2013. "Product quality in the agri-food chain: do cooperatives offer high-quality wine?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 40(1), pages 143-162, February.
    5. repec:mes:jeciss:v:30:y:1996:i:4:p:1212-1216 is not listed on IDEAS
    6. Marten Graubner & Alfons Balmann & Richard J. Sexton, 2011. "Spatial Price Discrimination in Agricultural Product Procurement Markets: A Computational Economics Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 949-967.
    7. Valentinov, Vladislav, 2007. "Why are cooperatives important in agriculture? An organizational economics perspective," Journal of Institutional Economics, Cambridge University Press, vol. 3(01), pages 55-69, April.
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    Citations

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    Cited by:

    1. Julia-Igual, J. & Melia-Marti, E., 2015. "Agri-food cooperative enterprises: From Ballestero to Bijman," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 15(1).
    2. Sagebiel, Julian & Müller, Jakob R. & Rommel, Jens, 2013. "Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany," MPRA Paper 52385, University Library of Munich, Germany.
    3. Jos Bijman & Constantine Iliopoulos, 2014. "Farmers' Cooperatives in the Eu: Policies, Strategies, and Organization," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(4), pages 497-508, December.
    4. Zavelberg, Yvonne & Storm, Hugo, 2016. "Pricing behaviour of cooperatives and investor-owned dairies under spatial competition," Discussion Papers 250230, University of Bonn, Institute for Food and Resource Economics.
    5. Jo H.M. Wijnands & Jos Bijman & Tanja Tramnitzke, 2017. "Analyses of the functioning of Milk Package provisions as regards producer organisations and collective negotiations," JRC Working Papers JRC107880, Joint Research Centre (Seville site).
    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.

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