The Evolution of Solutions to the Free Rider Problem in US Agricultural Bargaining Cooperatives

Συγγραφείς:
Dr Constantine Iliopoulos
Τύπος: Book Chapter
Τίτλος Περιοδικού: Research Topics in Agricultural and Applied Economics
'Ετος δημοσίευσης: 2009
Πηγή: AGRERI
Θέμα:
agricultural development
economics
agricultural economics
cooperatives
agribusiness and cooperatives
Περιγραφή:

This paper addresses the issue of how intra-organizational incentive alignment mechanisms evolve to solve the free rider problem in collective bargaining. We focus on agricultural bargaining cooperatives (ABCs), a particular form of producer-owned firms mainly observed in the West Coast states of the US. These organizations play several crucial institutional roles that include, among others, enhancing farmers’ countervailing power vis-à-vis powerful processors, deterring postcontractual opportunism, enabling price discovery, and ameliorating moral hazard and adverse selection problems. The single most important factor that constrains ABCs’ ability to play such roles is the free rider problem. The latter refers to the situation where a non-member receives benefits associated with the provision of public goods by the cooperative (e.g., higher commodity prices), but avoids becoming a member—and thus eschews contributing to the costs associated with this provision, which are incurred by members alone. We review quantitative and qualitative evidence collected for more than ten years from ABCs to explore the evolution of solution instruments used to align member incentives and thus minimize the inefficiencies arising from the free rider problem. The obtained results suggest that mechanisms evolve from Market to Community to Contract to Hierarchy solutions. In organizations characterized by highly heterogeneous memberships the provision of a combination of intra-organizational incentives is the only means to addressing the free rider problem efficiently.

 

Σχετικοί Πόροι

Public policy support for agricultural cooperatives: an organizational economics approach

Provider: 
Subject: 
agricultural policies
socioeconomic development
legislation
agricultural and rural legilslation
economics
agricultural economics
cooperatives
agribusiness and cooperatives

Support for Farmers' Cooperatives-Country Report- Greece

Provider: 
Subject: 
products
agricultural products
animal products
plant products
policies
agricultural policies
socioeconomic development
rural development
agricultural development
economics
cooperatives
agribusiness and cooperatives
agricultural practices
farming systems
cooperative farming

The Organizational, Financial and Ownership Characteristics of US Agricultural Cooperatives: Survey Results from a New Institutional Economics Perspective

Provider: 
Subject: 
economics
agricultural economics
cooperatives
agribusiness and cooperatives

Small-Scale Farmers in South Africa: Can Agricultural Cooperatives Facilitate Access to Input and Product Markets?

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives
economics
agriculture
Collected from: 

Handbook of agricultural economics

Provider: 
Subject: 
farmers
agricultural development
economics
agricultural economics
agriculture
farming systems
Collected from: 

The Taxation and Revenue System of State and Local Governments in North Dakota (Revised)

Provider: 
Subject: 
cooperatives
agricultural economics
economics
agriculture
Collected from: 

AGRERI Library

Public policy support for agricultural cooperatives: an organizational economics approach

Provider: 
Subject: 
agricultural policies
socioeconomic development
legislation
agricultural and rural legilslation
economics
agricultural economics
cooperatives
agribusiness and cooperatives

Support for Farmers' Cooperatives-Country Report- Greece

Provider: 
Subject: 
products
agricultural products
animal products
plant products
policies
agricultural policies
socioeconomic development
rural development
agricultural development
economics
cooperatives
agribusiness and cooperatives
agricultural practices
farming systems
cooperative farming

The Organizational, Financial and Ownership Characteristics of US Agricultural Cooperatives: Survey Results from a New Institutional Economics Perspective

Provider: 
Subject: 
economics
agricultural economics
cooperatives
agribusiness and cooperatives

External Library

Small-Scale Farmers in South Africa: Can Agricultural Cooperatives Facilitate Access to Input and Product Markets?

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives
economics
agriculture
Collected from: 

Handbook of agricultural economics

Provider: 
Subject: 
farmers
agricultural development
economics
agricultural economics
agriculture
farming systems
Collected from: 

The Taxation and Revenue System of State and Local Governments in North Dakota (Revised)

Provider: 
Subject: 
cooperatives
agricultural economics
economics
agriculture
Collected from: