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Cooperatives, Regulation and Competition in Norwegian Agriculture

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  • Tennbakk, Berit

Abstract

Over production is a persistent and costly problem in Norwegian agriculture. Support to agricultural production implicitly yields incentives to produce too much, i.e., causing market prices to fall below the target level, and thereby increasing the need for subsidies and additional market interventions. In order to restrict supplies, farmers are allowed to coordinate through marketing cooperatives. The paper argues that this coordination is likely to be insufficient in markets where the cooperative competes with an investor-owned wholesaler. Interventions in the market in order to remove excess supplies may induce further incentives to increase production. Levying a tax on all production in order to cover market regulation costs, moves the solution in the right direction but is impotent in restoring the target (second-best) level of production.

Suggested Citation

  • Tennbakk, Berit, 2002. "Cooperatives, Regulation and Competition in Norwegian Agriculture," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24907, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae02:24907
    DOI: 10.22004/ag.econ.24907
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    References listed on IDEAS

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    Cited by:

    1. Viergutz, Tim & Zubek, Nana & Schulze-Ehlers, Birgit, 2016. "How Spatial Pricing Affects Cooperative Members’ Switching Decisions," 149th Seminar, October 27-28, 2016, Rennes, France 244772, European Association of Agricultural Economists.
    2. Viergutz, Tim & Schulze-Ehlers, Birgit, 2018. "Member Commitment and Switching Decisions in Dairy Cooperatives – A Factorial Survey," 2018 International European Forum (163rd EAAE Seminar), February 5-9, 2018, Innsbruck-Igls, Austria 276864, International European Forum on System Dynamics and Innovation in Food Networks.

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