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

  • George Hendrikse
  • Jos Bijman
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    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.

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    Article provided by Foundation for the European Review of Agricultural Economics in its journal European Review of Agricultural Economics.

    Volume (Year): 29 (2002)
    Issue (Month): 2 (June)
    Pages: 255-269

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    Handle: RePEc:oup:erevae:v:29:y:2002:i:2:p:255-269
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