A Theory of Agricultural Marketing Cooperatives with Direct Selling
GATE Working Paper 1331
31 Pages Posted: 21 Nov 2013
Date Written: November 20, 2013
Abstract
We build a theoretical model to study a market structure of a marketing cooperative with direct selling, in which many farmers are members of an agricultural marketing cooperative. They can sell their production either to the cooperative or on a local market. We show that the decision to sell to the cooperative induces an anti-competitive effect on the direct selling market. Conversely, direct selling may create a "healthy emulation" among farmers, leading to more production benefiting the cooperative.
Keywords: marketing cooperative, direct selling, local market, competitive
JEL Classification: D43, L11, Q13
Suggested Citation: Suggested Citation