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On the emergence of new growers' associations: self-selection versus countervailing power

    Research output: Contribution to journal › Article › Academic › peer-review

    Abstract

    Increasing differentiation on the supply side of agricultural and horticultural markets has resulted in the emergence of new growers' associations (GAs). These GAs face a trade-off between self-selection and countervailing power, which is analysed with an incomplete contracting model. Heterogeneous GAs frustrate high-quality growers as a result of the policy of applying the equality principle, but they are strong in terms of countervailing power of the growers collectively. The opposite holds for homogeneous GAs. Homogeneous GAs prevail when the benefits of product differentiation are large, or when low-quality producers can be driven out of the market. An efficiency rationale for EU Regulation (EC) No. 2200/96 is formulated.
    Original languageEnglish
    Pages (from-to)255-269
    JournalEuropean Review of Agricultural Economics
    Volume29
    Issue number2
    Publication statusPublished - 2002

    Keywords

    • Countervailing power
    • Growers' association
    • Incomplete contracts
    • Member heterogeneity
    • Self-selection

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