Incentives to Efficient Investment Decisions in Agricultural Cooperatives

Recent studies have questioned the competitiveness of agricultural cooperatives in an industrialized food system, based on empirical results and economic theory. New organizational institutions have been proposed to overcome the cooperative main weaknesses (the so called new generation cooperatives). In this paper, we provide a simple model based on a financial approach to address the issue of cooperative competitiveness and to assess the investment efficiency of both traditional and new generation cooperatives. The main conclusions of the analysis are: i) cooperatives (both traditional and new generation ones) may have incentive to adopt projects that do not maximize the Net Present Value of the firm ii) the institutions of new generation cooperatives are not sufficient to ensure net present value maximization, even though they address some of the main concerns of traditional cooperatives iii) traditional cooperatives may have a competitive advantage in businesses that require the aggregation of a large number of farmers.

Issue Date:
Publication Type:
Conference Paper/ Presentation
Record Identifier:
PURL Identifier:
Total Pages:
JEL Codes:
Q13; Q14
Series Statement:
Contributed Paper

 Record created 2017-04-01, last modified 2018-01-22

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)