Guaranteed Minimum Price Contracts for Some, an Insurance for Others?
This paper analyzes the impact of guaranteed minimum price contracts between sub-groups of farmers and a fair trade manufacturer on the spot market price. We focus on the fair trade concept in the coffee supply chain as an example. We analyze a three level vertical chain gathering perfectly competitive farmers upstream who offer their raw product to manufacturers who then sell finished products to a downstream retailer. Without fair trade, all the raw product is sold on the spot market. When a sub-group of farmers benefit from a guaranteed minimum price contract offered by a fair trade certifier, we show that farmers outside of this fair trade agreement may also benefit from a higher spot market price in cases of a limited overproduction.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bontems, Philippe & Bouamra-Mechemache, Zohra, 2003.
"Predatory Accommodation In Vertical Contracting With Externalities,"
2003 Annual meeting, July 27-30, Montreal, Canada
22044, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Bontems, P. & Bouamra-Mechemache, Z., 2004. "Predatory accomodation in vertical contracting with externalities," Economics Working Paper Archive (Toulouse) 200402, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
- Poret Sylvaine & Chambolle Claire, 2007. "Fair Trade Labeling: Inside or Outside Supermarkets?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-24, November.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae08:44134. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.