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Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications

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  • Lence, Sergio H
  • Marette, Stephan
  • Hayes, Dermot J.
  • Foster, William

Abstract

We examine the incentives of atomistic producers to differentiate and collectively market products. We analyze market and welfare effects of alternative producer organizations, discuss circumstances under which they will evolve, and describe implications for the ongoing debate between the EU and the United States. As fixed costs of development and marketing increase and the anticipated market size falls, it becomes essential to increase the producer organization’s ability to control supply to cover the fixed costs associated with the introduction of differentiated products. Counterintuitively, stronger property right protection for producer organizations may enhance welfare even after a differentiated product has been developed.

Suggested Citation

  • Lence, Sergio H & Marette, Stephan & Hayes, Dermot J. & Foster, William, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," ISU General Staff Papers 200701010800001008, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200701010800001008
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    1. Zago, Angelo M. & Pick, Daniel H., 2004. "Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(1), pages 1-16, April.
    2. Stéphan Marette & John Crespi, 2003. "Can Quality Certification Lead to Stable Cartels?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(1), pages 43-64, August.
    3. Dermot J. Hayes & Sergio H. Lence & Andrea Stoppa, 2004. "Farmer-owned brands?," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 269-285.
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