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Abstract

Since the mid of 1990s, farmers have gotten more dependent on the retail markets to sale their agricultural products, while the retail markets have substantially been concentrated on a few large marketing firms. This means that farmers' marketing risks such as receiving lower prices are getting bigger. The marketing risks can be explained with the theory of the hold-up problem and the price discrimination. To countervail these risks and increase the farmers' market options it is a more effective strategy that farmers form cooperative and partially participate in the agricultural retail market.

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