Mixed Markets in the Food Processing Industry

The food processing industry in Western countries operates in markets that usually are highly concentrated, consisting of a few cooperatives and investor-owned firms. However, in the literature some studies questioned whether the mixed market structure is a stable equilibrium, and suggestions are made that the cooperatives eventually will crowd out all investor-owned firms. To analyse the problem, the family of models of mixed markets is generalized and analysed. It is shown that a mixed market equilibrium may occur under quite general conditions. Also, it is shown that the investor-owned firm may serve as a yardstick of production to the cooperative, helping farmers achieve an increased payoff relative to a situation with a single coop in the market.cooperative, endogenous membership, investor-owned-firm, mixed market, yardstick of production, Agribusiness, L11, L13, P12, P13, Q13,

Regulatory Institutions in Agricultural Markets: A Comparative Analysis

We have employed a simple model to analyse market regulation in a situation with multifunctional agricultural production, i.e., a public good produced jointly with a private good, and where there is imperfect competition in processing. We have analysed the impact on welfare of two archetype regulatory institutions formed to overcome the market imperfections. The institutions, a Regulatory Marketing Board and a Regulatory Marketing Cooperative, are both represented in the Norwegian agricultural market. Taking into account the cost of public funds, we find that the Board in general ensures the highest social welfare. The Cooperative does not replicate the Board solution unless restricted by a price cap and in combination with a production subsidy. If the restricted Cooperative is able to practise a higher degree of cost sharing than the Board, it may however produce the highest welfare.cooperative, marketing board, multifunctionality, oligopsony, trade, Political Economy,

Mixed Markets in the Food Processing Industry

The food processing industry in Western countries operates in markets that usually are highly concentrated, consisting of a few cooperatives and investor-owned firms. However, in the literature some studies questioned whether the mixed market structure is a stable equilibrium, and suggestions are made that the cooperatives eventually will crowd out all investor-owned firms. To analyse the problem, the family of models of mixed markets is generalized and analysed. It is shown that a mixed market equilibrium may occur under quite general conditions. Also, it is shown that the investor-owned firm may serve as a yardstick of production to the cooperative, helping farmers achieve an increased payoff relative to a situation with a single coop in the market

Regulatory Institutions in Agricultural Markets: A Comparative Analysis

We have employed a simple model to analyse market regulation in a situation with multifunctional agricultural production, i.e., a public good produced jointly with a private good, and where there is imperfect competition in processing. We have analysed the impact on welfare of two archetype regulatory institutions formed to overcome the market imperfections. The institutions, a Regulatory Marketing Board and a Regulatory Marketing Cooperative, are both represented in the Norwegian agricultural market. Taking into account the cost of public funds, we find that the Board in general ensures the highest social welfare. The Cooperative does not replicate the Board solution unless restricted by a price cap and in combination with a production subsidy. If the restricted Cooperative is able to practise a higher degree of cost sharing than the Board, it may however produce the highest welfare