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Producer Cooperatives, Input Pricing and Land Allocation

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  • Choi, E. Kwan
  • Feinerman, Eli

Abstract

This paper considers input pricing rules for a producer cooperative which supplies its members with two inputs: a publicly provided private input (water), and a local public input (road services). An Israeli Moshav which allocates land equally among producers is a good example. The cooperative uses a two‐part pricing rule: a product‐dependent uniform fee (head tax) and a user charge per unit of the private input. Discrimination of head tax among the producer groups is shown to dominate that of user charge in the short run. However, land reallocation among producers can result in a Pareto‐superior pricing rule and the Henry George theorem emerges in the long run. Thus, allowing land leasing while maintaining equal rights to land increases producer welfare.
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Suggested Citation

  • Choi, E. Kwan & Feinerman, Eli, 1993. "Producer Cooperatives, Input Pricing and Land Allocation," Staff General Research Papers Archive 598, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:598
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    Cited by:

    1. Jia, Xiangping & Hu, Yamei & Hendrikse, George W.J. & Huang, Jikun, "undated". "Centralized versus Individual: Governance of Farmer Professional Cooperatives in China," 2010 IAMO Forum, June 16-18, 2010, Halle (Saale), Germany 90803, Institute of Agricultural Development in Transition Economies (IAMO).
    2. Li, Ziran & Hang, Qian, 2014. "Pricing under Uncertainty in Agricultural Grain Markets and the Objectives of Cooperatives: A Mixed Oligopoly Analysis," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170206, Agricultural and Applied Economics Association.

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