OBSERVATIONS ON COOPERATIVE BARGAINING IN U.S. AGRICULTURAL MARKETS

This paper identifies market and commodity characteristics that seem to support successful cooperative bargaining in markets for farm output. Bargaining is not just about increasing prices paid to farmers; indeed, although there is very little empirical research that addresses the issue, what evidence does exist suggests that cooperative bargaining has very little direct influence on price. Nevertheless, the price negotiation process may be useful in itself as a form of price discovery in markets where there is uncertainty about market supply and demand conditions, and bargaining associations can play an important role in ensuring contract reliability. These and other benefits must be weighed against the organizational and ongoing operational costs of a formal bargaining association when considering whether bargaining is appropriate for a given market environment. Even when the aggregate net benefits associated with bargaining are positive, the distribution of benefits across the various market participants may have an important influence on the political feasibility of bargaining.


Subject(s):
Issue Date:
2002
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18526
Total Pages:
14
Series Statement:
CARD Working Paper 02-WP 316




 Record created 2017-04-01, last modified 2017-08-24

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