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Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications

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  • Sergio H. Lence
  • Stéphan Marette
  • Dermot J. Hayes
  • William Foster

Abstract

We examine the incentives of atomistic producers to differentiate and collectively market products. We analyze market and welfare effects of alternative producer organizations, discuss circumstances under which they will evolve, and describe implications for the ongoing debate between the EU and the United States. As fixed costs of development and marketing increase and the anticipated market size falls, it becomes essential to increase the producer organization's ability to control supply to cover the fixed costs associated with the introduction of differentiated products. Counterintuitively, stronger property right protection for producer organizations may enhance welfare even after a differentiated product has been developed. Copyright 2007, Oxford University Press.

Suggested Citation

  • Sergio H. Lence & Stéphan Marette & Dermot J. Hayes & William Foster, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 947-963.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:4:p:947-963
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01036.x
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    1. Stéphan Marette & John Crespi, 2003. "Can Quality Certification Lead to Stable Cartels?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(1), pages 43-64, August.
    2. Dermot J. Hayes & Sergio H. Lence & Andrea Stoppa, 2004. "Farmer-owned brands?," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 269-285.
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