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Investigating Bargaining Power Of Farmers And Processors In Iran'S Dairy Market

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  • SHOKOOHI, ZEINAB
  • CHIZARI, AMIR HOSSEIN
  • ASGARI, MAHDI

Abstract

The farm-gate price of raw milk in Iran is determined annually in negotiations among representatives of dairy processors, milk producers, and government officials. This study estimates the average bargaining power of dairy farmers and processors, through applying the generalized axiomatic Nash approach in a bilateral bargaining model. We employ annual data from 1990 to 2013 to estimate econometric representation of a bilateral bargaining model using a Monte Carlo expectation maximization algorithm. Results imply a higher bargaining power of 0.69 for processors, compared with 0.31 for farmers. This asymmetry of bargaining power causes unequal allocation of gains in the milk market.

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  • Shokoohi, Zeinab & Chizari, Amir Hossein & Asgari, Mahdi, 2019. "Investigating Bargaining Power Of Farmers And Processors In Iran'S Dairy Market," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(1), pages 126-141, February.
    • Handle: RePEc:cup:jagaec:v:51:y:2019:i:01:p:126-141_00
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    Cited by:

    1. Kampmann, Willi & Kirui, Oliver Kiptoo, 2021. "Role of Farmers’ Organizations in Agricultural Transformation in Africa: Overview of Continental, Regional, and Selected National Level Organizations," Working Papers 309358, University of Bonn, Center for Development Research (ZEF).
    2. Giuseppe Di Vita & Daniela Spina & Rachele De Cianni & Roberto Carbone & Mario D’Amico & Raffaele Zanchini, 2023. "Enhancing the extended value chain of the aromatic plant sector in Italy: a multiple correspondence analysis based on stakeholders’ opinions," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-24, December.

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