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Cooperatives, Regulation and Competition in Norwegian Agriculture


  • Tennbakk, Berit


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

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    References listed on IDEAS

    1. Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-227, March.
    2. Morton I. Kamien & Israel Zang, 1987. "The Limits of Monopolization Through Acquisition," Discussion Papers 754, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Mats Bergman, 1997. "Antitrust, Marketing Cooperatives, and Market Power," European Journal of Law and Economics, Springer, vol. 4(1), pages 73-92, January.
    4. Gaudet, G. & Salant, S., 1989. "Towards A Theory Of Horizontal Mergers," Papers 89-24, Michigan - Center for Research on Economic & Social Theory.
    5. Berit Tennbakk, 1995. "Marketing Cooperatives In Mixed Duopolies," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 33-45.
    6. V. James Rhodes, 1983. "The Large Agricultural Cooperative as a Competitor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 1090-1095.
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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.

    More about this item


    Cooperatives; regulation; over production; duopoly; Agribusiness; Q13; L21; D43;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection


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