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The agriculture in transition countries can be described by considerable uncertainties.In these countries public institutions are ineffective in ensuring contract enforcement.The absence of enforceable contract to set up any kind of vertical co-ordination hasbecome difficult. In addition, this creates severe barriers for price discovery involvinghigh transaction costs to co-ordinate market exchanges. Although there is a wealth ofliterature on marketing cooperative, but research on their role in transition agricultureis scarce. This paper tries to contribute to this gap. In this paper we have analysed thepotential benefits and costs of the marketing cooperatives in Hungary employingtransaction cost economics framework. The results presented add to a small literatureon the marketing cooperatives in transition agriculture. We found that the quantity,the existence of contract, flexibility and trust are the most important factor for farmersto selling their product via cooperative. The cluster analysis provides some additionalinsights regarding farmers' choices. Namely, direct benefits including price, inputfinance extension services and speed of payments from cooperative membership havealso important role. The most striking result is that the diversification and reputationhas positive influences on the share of cooperative. Furthermore, large farmers haveless willingness to sell their product to the cooperative. Surprisingly, asset specificityhas rather negative effects on the share of cooperative.

Subject(s): Agribusiness

Issue Date: 2007

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 17

Series Statement: 103rd EAAE Seminar 'Adding Value to the Agro-Food Supply Chain in the Future Euromediterranean Space'

Record appears in: European Association of Agricultural Economists (EAAE) > 103rd Seminar, April 23-25, 2007, Barcelona, Spain

Autor: Ferto, Imre ; Bakucs, Lajos Zoltan ; Szabo, Gabor G.


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