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On the emergence of new growers' associations: self-selection versus countervailing power

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  • George Hendrikse
  • Jos Bijman

Abstract

Increasing differentiation on the supply side of agricultural and horticultural markets has resulted in the emergence of new growers' associations (GAs). These GAs face a trade-off between self-selection and countervailing power, which is analysed with an incomplete contracting model. Heterogeneous GAs frustrate high-quality growers as a result of the policy of applying the equality principle, but they are strong in terms of countervailing power of the growers collectively. The opposite holds for homogeneous GAs. Homogeneous GAs prevail when the benefits of product differentiation are large, or when low-quality producers can be driven out of the market. An efficiency rationale for EU Regulation (EC) No. 2200-96 is formulated. Copyright 2002, Oxford University Press.

Suggested Citation

  • George Hendrikse & Jos Bijman, 2002. "On the emergence of new growers' associations: self-selection versus countervailing power," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(2), pages 255-269, June.
    • Handle: RePEc:oup:erevae:v:29:y:2002:i:2:p:255-269
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    Cited by:

    1. Paul Diederen & Hans van Meijl & Arjan Wolters, 2003. "Modernisation in agriculture: what makes a farmer adopt an innovation?," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 2(3/4), pages 328-342.
    2. Peter Bogetoft & Henrik B. Olesen, 2002. "Influence Costs in Heterogeneous Cooperatives: A Formal Model of Sales Distortion," CIE Discussion Papers 2002-05, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    3. Sabine Duvaleix & Marie Lassalas & Laure Latruffe & Vasilia Konstantidelli & Irene Tzouramani, 2020. "Adopting Environmentally Friendly Farming Practices and the Role of Quality Labels and Producer Organisations: A Qualitative Analysis Based on Two European Case Studies," Sustainability, MDPI, vol. 12(24), pages 1-16, December.
    4. Carlos Omar Trejo-Pech & Roselia Servín-Juárez & Álvaro Reyes-Duarte, 2023. "What sets cooperative farmers apart from non-cooperative farmers? A transaction cost economics analysis of coffee farmers in Mexico," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-24, December.
    5. Benmehaia, Mohamed Amine & Brabez, Fatima, 2016. "The Propensity To Cooperate Among Peasant Farmers In Algeria: An Analysis From Bivariate Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(4), pages 1-14, October.
    6. Hendrikse, G.W.J. & Veerman, C.P., 2003. "On The Future of Co-operatives," ERIM Report Series Research in Management ERS-2003-007-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Agbo, Maxime & Rousselière, Damien & Salanié, Julien, 2015. "Agricultural marketing cooperatives with direct selling: A cooperative–non-cooperative game," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 56-71.
    8. Djanibekov, Nodir & Djanibekov, Utkur & Sommer, Rolf & Petrick, Martin, 2015. "Cooperative agricultural production to exploit individual heterogeneity under a delivery target: The case of cotton in Uzbekistan," Agricultural Systems, Elsevier, vol. 141(C), pages 1-13.
    9. repec:hal:journl:halshs-01098762 is not listed on IDEAS
    10. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Research Reports JRC101617, Joint Research Centre.
    11. Klerkx, Laurens & Leeuwis, Cees, 2008. "Matching demand and supply in the agricultural knowledge infrastructure: Experiences with innovation intermediaries," Food Policy, Elsevier, vol. 33(3), pages 260-276, June.
    12. Theo Benos & Nikos Kalogeras & Frans J.H.M. Verhees & Panagiota Sergaki & Joost M.E. Pennings, 2016. "Cooperatives’ Organizational Restructuring, Strategic Attributes, and Performance: The Case of Agribusiness Cooperatives in Greece," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 127-150, January.
    13. Angelo Zago, 2004. "Quality Production and Quality Indicators in Intermediate Products," Working Papers 16/2004, University of Verona, Department of Economics.
    14. Valérie Barraud-Didier & Marie-Christine Henninger & Asâad El Akremi, 2012. "The Relationship Between Members' Trust and Participation in Governance of Cooperatives : The Role of Organizational Commitment," Post-Print halshs-00695926, HAL.
    15. Barraud-Didier, Valérie & Henninger, Marie-Christine & El Akremi, Assâad, 2012. "The Relationship Between Members’ Trust and Participation in the Governance of Cooperatives: The Role of Organizational Commitment," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(1), pages 1-24, February.
    16. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    17. Riganelli, Chiara & Marchini, Andrea & Polenzani, Bianca & Martino, Gaetano, 2018. "Strategies of Diversification and Brand Extension in SME Food Companies: Which Factors Might Affect the Impact of Consumers’ Preferences," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 9(2), March.
    18. Armelle Mazé, 2005. "Contract Law and the self-enforcing range of contracts in agriculture," Working Papers halshs-00354960, HAL.
    19. Nikos Kalogeras & Joost M.E. Pennings & Ivo. A. van der Lans & Philip Garcia & Gert van Dijk, 2009. "Understanding heterogeneous preferences of cooperative members," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 90-111.
    20. Julia HÖHLER & Rainer KÜHL, 2018. "Dimensions Of Member Heterogeneity In Cooperatives And Their Impact On Organization – A Literature Review," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 697-712, December.
    21. Aleksandra Chlebicka & Michał Pietrzak, 2018. "Size of Membership and Survival Patterns of Producers’ Organizations in Agriculture—Social Aspects Based on Evidence from Poland," Sustainability, MDPI, vol. 10(7), pages 1-24, July.
    22. Maze, Armelle, 2006. "Multilateral reputation mechanisms and contract law in agriculture : complement or substitutes," 2006 Annual meeting, July 23-26, Long Beach, CA 21285, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    23. Hendrikse, George W.J., 2004. "Grower Heterogeneity and Governance: Authority, Access, and Countervailing Power," 2004 Annual meeting, August 1-4, Denver, CO 20046, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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