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Cooperative Organizations as an Engine of Equitable Rural Economic Development

Author

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  • Altman, Morris

    (The University of Newcastle, Newcastle Business School)

Abstract

Cooperatives represent an alternative to large-scale corporate farms and plantations as well as to independent unaffiliated small private farms. This paper presents a comparative modeling narrative on cooperative organizational forms’ potential impact on equitable rural development. This speaks to issues of both increasing the size of the economic pie and how this income is distributed. The case is made the cooperatives can potentially generate higher rates of growth and more equitable growth, even in competitive economic environments. An important type of cooperative that is focused upon in this paper is one based on the linking of smaller farms into a cooperative. Economies of scale and scope can be captured by the cooperatives and transaction costs can be reduced. Given cooperative governance, one would also expect higher levels of x-efficiency. Overall, cooperatives can generate relatively high incomes to cooperative members, whilst remaining competitive with the traditional privately owned large farms. Critical to the success of the cooperative, is a set rules and regulations that place them on a level playing field with the privately owned farm. In addition, the implementation and practice of cooperative principles is key to the success of the cooperative farm and rural cooperatives, more generally speaking.

Suggested Citation

  • Altman, Morris, 2015. "Cooperative Organizations as an Engine of Equitable Rural Economic Development," Newcastle Business School Discussion Paper Series: Research on the Frontiers of Knowledge 1, The University of Newcastle, Australia.
  • Handle: RePEc:nbz:nbsuon:2015_1
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    References listed on IDEAS

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    Cited by:

    1. Samuel Ahado & Levan Chkhvirkia & Jiri Hejkrlik, 2022. "Is the Success of Rural Cooperatives Conditioned by the Group Characteristics and Their Value Chain? Evidence from New Farmer Groups in Georgia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(2), pages 677-702, April.
    2. Abramova Iryna & Nedilska Larysa & Kurovska Nataliia & Martynyuk Halyna, 2021. "Financial Inclusion in the Context of Sustainable Development of Rural Areas," Management Theory and Studies for Rural Business and Infrastructure Development, Sciendo, vol. 43(3), pages 328-336, September.
    3. Jia Shi & Jiacheng Zhang & Naiyan Xie & Zhuodong Yang & Jianli Luo, 2022. "An Agricultural Supply Chain Coordination Model: The Case of Trinity Comprehensive Cooperation Organization in China," Sustainability, MDPI, vol. 14(14), pages 1-22, July.
    4. Walter Perpétuo Ribas & Bruno Pedroso & Leandro Martinez Vargas & Claudia Tania Picinin & Miguel Archanjo de Freitas Júnior, 2022. "Cooperative Organization and Its Characteristics in Economic and Social Development (1995 to 2020)," Sustainability, MDPI, vol. 14(14), pages 1-22, July.
    5. Ramanauskas Julius & Stašys Rimantas & Contò Francesco, 2017. "The Main Obstacles and Possibilities of the Cooperative Movement in Lithuania," Management of Organizations: Systematic Research, Sciendo, vol. 77(1), pages 101-117, June.
    6. Jaqueline Marcis & Sandro Cesar Bortoluzzi & Edson Pinheiro Lima & Sérgio Eduardo Gouvêa Costa, 2019. "Sustainability performance evaluation of agricultural cooperatives’ operations: a systemic review of the literature," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(3), pages 1111-1126, June.
    7. Ramesh C. Paudel & Chakra Pani Acharya, 2022. "Cooperatives and economic growth in a developing country: The case of Nepal," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 797-815, September.
    8. James Wangu & Ellen Mangnus & A.C.M. (Guus) van Westen, 2020. "Limitations of Inclusive Agribusiness in Contributing to Food and Nutrition Security in a Smallholder Community. A Case of Mango Initiative in Makueni County, Kenya," Sustainability, MDPI, vol. 12(14), pages 1-23, July.
    9. Kendisha Soekardjo Hintz & Jürgen Pretzsch, 2023. "Co‐creation of business models for smallholder forest farmers’ organizations: Lessons learned from rural Ethiopia and Tanzania," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 921-949, September.
    10. Yaffa Moskovich, 2020. "Business Sustainability Strategy in a Cooperative Kibbutz Industry," Sustainability, MDPI, vol. 12(21), pages 1-23, November.
    11. Renaud Metereau, 2015. "Get inspired by the global South : peasant-led ecodevelopment strategies in Nicaragua," Post-Print halshs-01162826, HAL.

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    More about this item

    Keywords

    Cooperation; Cooperatives; Economics of scale and scope; Fairness; Transaction costs; Cooperative principles; X­efficiency; Dynamic efficiency; Income equality;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D10 - Microeconomics - - Household Behavior - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D6 - Microeconomics - - Welfare Economics
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G2 - Financial Economics - - Financial Institutions and Services
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J00 - Labor and Demographic Economics - - General - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • J8 - Labor and Demographic Economics - - Labor Standards
    • K2 - Law and Economics - - Regulation and Business Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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