nominal income targeting in an open economy optimizing model abstract this paper presents simulation results regarding the performance of nominal income targeting a monetary policy rule that sets interest rates in response to deviations of nominal gdp growth from a target path the macroeconomic model is one in which agents solve dynamic optimization problems with rational expectations but in an environment with slow price adjustments in the present version consumption choices reflect habit formation and the economy is open to international flows of goods and securities when calibrated to quarterly us data the model s results suggest that nominal income targeting performs well in relation to inflation targeting and taylor rules

optimal simple rules in re models with risk sensitive preferences abstract this paper provides a useful method to solve optimal simple rules under risk sensitive preference in macromodels with forward looking behavior an application to a new keynesian model with lagged dynamics is offered and risk sensitive preference is found to amplify the policy responses

organizational commitment in a mixed oligopoly agricultural cooperatives and investor owned firms a number of agricultural cooperativeorganizations prominent examples includetri valley growers and the saskatchewanwheat pool currently face considerable nancialand organizationalchallenges externally these challenges include a grow ing concentration in a number of sectors e g beef and pork packing and a greater preva lence of vertical integration and contracts internally cooperatives co ops encountergreater heterogeneity among members greater property rights problems cook anda decline in member commitment fulton1999 this latter factor has been cited asone reason for the declining market shareand poor nancialperformance of a numberof co ops fulton and gibbings the purpose of this article is to examinethe issue of member commitment in the con text of a mixed oligopoly where co ops andinvestor owned rms iofs compete witheach other in supplying a consumer good

does acquisition of a cooperative generate profits for the buyer the dairyworld case this article examines the takeover of a cooperative dairyworld by an investor owned firm saputo that was not previously present in the industry determines if this takeover generates greater returns for the investor owned firms iof and on the basis of this evidence makes some inferences about the behavior and performance of cooperatives and iofs the empirical evidence strongly supports the conclusion that saputo s stock price rose with its takeover announcement this outcome is consistent with a number of explanations including that saputo was unaffected by hubris a factor often suggested as the reason that many firms overbid when they undertake acquisitions dairyworld s poor liquidity and capital shortage problems as well as a limited number of suitors may have weakened its bargaining position in its dealings with saputo the observed increase in saputo s stock price is also consistent with the possibility that by taking over a cooperative saputo was able to decrease competition and thus increase its profits a fruitful area for future research would be a rigorous theoretical and empirical determination of the impact that these various factors have on acquisition profitability such analysis is required before inferences about the behavior and performance of cooperatives and iofs can be fully answered

assessing the importance of oligopsony power in agricultural markets oligopoly competition among few sellers is the cornerstone of industrial organization io conversely its sister concept oligopsony competition among few buyers is scarcely mentioned for example oligopsony is not discussed in the entire two volume handbook of industrial organization and monopsony is mentioned only in the context of incentives to integrate vertically two reasons apparently account for io economists lack of interest in buyer market power i they don t think it s very important and ii they don t believe it presents any unique modeling issues relative to seller market power scherer and ross illustrate this first viewpoint arguing that average concentration on the buyers side in manufacturing is undoubtedly lower than seller concentration p 519 tirole in his masterful treatise on io theory illustrates the second dispatching monopsony power in one sentence naturally the conclusions regarding monopoly power would also hold as well for monopsony power p 65 we argue that this dismissive treatment of buyer market power is not reasonable for economists interested in agriculture and agricultural markets the scherer and ross viewpoint may apply when considering generic inputs such as labor capital and energy competition for these inputs is apt to exceed competition for the outputs they produce because firms cross product market boundaries to compete for these inputs and there is essentially no branding among input buyers to diminish price competition among them moreover these inputs are typically mobile hence in elastic supply to individual buyers limiting the exercise of oligopsony power even in geographic settings where relatively few buyers prevail this view of input markets does not apply however to first handler markets for the raw agricultural commodities that are inputs into the processed or fresh packed food products we identify the following distinctive structural characteristics of these markets

facilitating the provision of farm credit the role of interlocking transactions between traders and zamindars in crop marketing systems in sindh abstract formal credit institutions in pakistan have largely failed to provide access to farm credit to small and medium scale landowners or zamindars this paper examines interlocked transactions between traders and landowners in the cotton and wheat markets in sindh that facilitate the provision of credit by traders it is concluded that the case examined provides an example where traders lend to landowners in a segment of the credit market that approximates competitive behavior without surplus extraction by traders key conditions resulting in this favorable outcome are the existence of both competition for market share and information sharing on borrowers between traders whether this outcome is also beneficial for other rural groups who may borrow from landowners in particular sharecropping tenants is independent of market relations between landowners and traders and is not determined here

cooperatives as entrants a potential shortcoming of game theoretic models in industrial organization is their failure to consider consumers as players we introduce a customer coalition a cooperative as a potential entrant and compare the cooperative entry threat with that posed by the usualforprofit entrant we identify four fundamental distinctions between cooperative andfor profit entrants and demonstrate that the strategic interplay between a cooperative and an incumbent firm may differ markedly from that between the incumbent and a for profit entrant the results impart a prospectively powerful role to potential cooperatives in beneficially regulating free market performance

organizational structure redistribution and the endogeneity of cost cooperatives investor owned firms and the cost of procurement abstract as an organizational type cooperatives are in general not the dominant form of enterprise nevertheless cooperatives and cooperative like organizations do play important roles in a number of sectors suggesting that in some circumstances they are more efficient than other business forms this paper explores the importance of membership goals on the relative efficiency of the cooperative form of organization the cooperative cost and hence production efficiency advantage is directly linked to the goal alignment between the cooperative and its members and is influenced by the extent of income redistribution between members and the degree of rent seeking that takes place in the organization when there is no aversion to income inequality the members produce at their first best levels however as aversion to inequality rises the production profile of the members converges to the production profile generated when the members face an iof regarding rent seeking if the more less efficient members are able to get their profits valued more total output is increased decreased as a consequence consumers may benefit from the lobbying that occurs inside a cooperative where the powerful members are the most efficient agents

what to show on the wine labels a hedonic analysis of price drivers of sicilian wines unlike previous literature we construct a hedonic model of wine price that incorporates all the main categories of variables simultaneously to enable a better evaluation of their importance on wine price formation a comprehensive model has the advantage of providing more reliable estimates of the attributes implicit prices thereby facilitating firms pricing and improving effectiveness of wine production and marketing decisions we utilize two different datasets of sicilian wines collecting data from influential wine guides our results suggest that wine price strongly depends on objective features such as vintage alcoholic content geographical origin grape variety producer size and cellaring potential in addition use of containers like tonneaux and barrique positively affects prices whereas use of concrete containers has a negative influence no univocal indications emerge with regard to the effect of the type of company type of viticulture and firm age as for sensorial characteristics our a

exploring the effect of crisis on cooperatives a bayesian performance analysis of french craftsmen cooperatives the aim of this paper is to understand the economic performance of craftsmen cooperatives during the crisis period these cooperatives have the distinctive feature of being supply cooperatives we

technological innovation in agricultural co operatives in china implications for agro food innovation policies abstract technological innovation has become a major source of farmer co operatives competitive advantage however empirical research on co operatives innovation in a developing country context is rare we adopt an ethnographic case study method collecting data from 32 co operatives managers of four exemplar co operative cases and agricultural experts in china and collected much archival data in addition a delphi study was conducted to collect data on the innovation performance based on the distinctive characteristics of co operatives we found that first knowledge spillovers and technology acquisition modes are two constructs which best capture the dynamic of technological innovation in co operatives and develop a typology based on them second grassroots and social innovation in a chinese co operative context have their own characters and indeed a hybrid of capitalism e g agribusiness and new rural re structuring principles i e similar to ica ones third and finally we provide detailed agro food policy implications for each of the four types of co op innovation the results of the research may be learned by co ops and policy makers in other developing economies who face similar challenges as in china

evaluating the extended target zone proposal for the g 3 this paper evaluates the extended target zone proposal of williamson and miller using the national institute world economic model gem williamson and miller s proposals envisage that real exchange rates will be controlled by movements in relative interest rates that fiscal policy will be used to steer nominal demand towards a target which depends on capacity utilization inflation and the current balance and that the average level of world interest rates will be used to control global nominal demand we evaluate the performance of these rules for the united states germany and japan over the period 1975 84 using control methods to determine the best choice of parameters in the feedback rules we then consider how history would have differed from actual events had such rules been in place the results suggest that such rules would have led to a significant improvement in economic performance exchange rate variability would have been reduced and the dramatic increase in united states interest rates which took place after 1980 would have been avoided this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

redesigning cooperative boundaries the emergence of new models in a mid 1990s aaea invited paper session the presenters and discussants posited challenges and opportunities for agricultural cooperation fulton hypothesized that forces external to the cooperative especially technology and member individualism would increasingly emerge as obstacles to success in north american agricultural cooperatives cook hypothesized forces internal to the cooperative especially potential negative consequences of vaguely defined property rights would challenge cooperative organizational growth in subsequent years three strategic choices were identified as potentially efficient that is the option to exit either the sector or the organizational form to continue strategically and structurally with moderate changes to organization form or to shift to a more radical form of organizational structure this article and session attempt to describe and analyze organizational design initiatives adopted since the mid 1990s this article complements and expands a typology of discrete institutional arrangements i e cooperative models based upon a broad definition of ownership rights comprising residual claim and control rights chaddad and cook we argue that cooperative models may be distinguished by how ownership rights are defined and assigned to economic agents tied contractually to the firm members patrons and investors in addition we develop a set of observations that suggest a research agenda based on a new institutional approach

habit formation in consumption and its implications for monetary policy models this paper explores a monetary policy model with habit formation for consumers in which consumers utility depends in part on current consumption relative to past consumption the empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous condence largely because the habit formation model captures the gradual hump shaped response of real spending to various shocks the paper then embeds the habit consumption specication in a monetary policy model and nds that the responses of both spending and inflation to monetary policy actions are signicantly improved by this modication jel d12 e52 e43

solution and estimation of re macromodels with optimal policy macro models of monetary policy typically involve forward looking behavior except in rare circumstances we have to apply some numerical method to find the optimal policy and the rational expectations equilibrium this paper summarizes a few useful methods and shows how they can be combined with a kalman filter to estimate the deep model parameters with maximum likelihood simulations of a macro model with staggered price setting interest rate elastic output and optimal monetary policy illustrate the properties of this estimation approach

agribusiness economics and management agribusiness scholarship emphasizes an integrated view of the food system that extends from research and input supply through production processing and distribution to retail outlets and the consumer this article traces development of agribusiness scholarship over the past century by describing nine

measuring benefits from a marketing cooperative in the copper river fishery the degradation of product quality is one form of rent dissipation resulting from incomplete property rights in fisheries industry structure and information asymmetries can also lead to underinvestment in product quality even when property rights are well defined in this article we empirically examine whether the voluntary formation of a marketing cooperative was able to mitigate market failures that led to the production of inferior quality fish specifically we use a difference in differences estimation strategy to measure the impact that the copper river fishermen s cooperative an alaskan salmon marketing cooperative had on ex vessel salmon prices and salmon quality measures we find that the cooperative was able to improve product quality as well as attract and sustain a higher price for its salmon our findings provide empirical support for many of the key tenets of cooperative theory specifically we find evidence that marketing cooperatives can address existing market failures that marketing cooperatives can have advantages in high quality product markets and that over time as a result of their success marketing cooperatives may lead to lasting producer benefits even though they become obsolete due to nonmember free riding

social interactions and product quality the value of pooling in cooperative entrepreneurial networks why do cooperatives often pay a pooled price despite the free riding incentives it entails in this paper we highlight that a cooperative is an enterprise owned by a network of entrepreneurial members by taking explicitly into account the social interactions among entrepreneurial members and the impact of social ties on members product quality provisions we identify the circumstances when pooling is efficient it is shown that social interactions mitigate the free riding effect of pooling and that the amount of members social interactions depends upon and increases with the cooperative s pooling ratio we show that the complete pooling policy is not only economically efficient but also socially advantageous when the context of the cooperative is conducive to frequent social interactions among members

imperfect competition in agricultural markets and the role of cooperatives a spatial analysis important characteristics of many agricultural markets are costly to transport raw products and relatively few processors one or more of which is often a cooperative this paper analyzes pricing behavior in these oligopsonistic spatial markets and focuses specifically upon the conjecture that cooperatives may have a procompetitive effect on the behavior of rival non co op processors the existence and magnitude of a procompetitive effect is shown to depend upon a number of structural and strategic factors including competitive relations among the non co op processors and a cooperative s membership and pricing policies

robust control of forward looking models abstract this paper shows how to formulate and compute robust ramsey aka stackelberg plans for linear models with forward looking private agents the leader and the followers share a common approximating model and both have preferences for robust decision rules because both doubt the model since their preferences differ the leader s and followers decision rules are fragile to different misspecifications of the approximating model we define a stackelberg equilibrium with robust decision makers in which the leader and follower have different worst case models despite sharing a common approximating model to compute a stackelberg equilibrium we formulate a bellman equation that is associated with an artificial single agent robust control problem the artificial bellman equation contains a description of implementability constraints that include euler equations that describe the worst case analysis of the followers as an example the paper analyzes a model of a monopoly facing a competitive fringe

process innovation activity in a mixed oligopoly the role of cooperatives this article develops a sequential game theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector the analysis examines an open membership input supplying cooperative co op that maximizes member welfare and finances its innovation activity through retained earnings analytical results show that the presence of the co op can increase the arrival rate of innovations while reducing the price of agricultural inputs cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs

dynamic r d competition with learning to account for the possibility that firms are unsure about the ease of innovation we formulate a differential game of r d competition with an unknown hazard rate we show as time passes with success firms become more pessimistic about eventual innovation reducing their r d investment and possibly exiting the race an increase in the number of competing firms tends to increase firms r d intensities for given beliefs but because beliefs evolve at different rates depending on the number of firms in the race time paths of r d investment intensity are not unambiguously ordered with respect to the number of competing firms

agroindustrialization of the global agrifood economy bridging development economics and agribusiness research this paper examines the agroindustrialization process from two supposedly disparate views development economics and agribusiness research the evolution of conceptual and methodological approaches emanating from these fields is explored and general observations are made concerning farm economic interdependence institutional and organizational change differing scopes of interest the causes of agroindustrialization orientation and the choice of microanalytic tools terminology and unit of analysis despite an impressive list of hurdles disincentives and disconnects complementarities between the two fields are identified the paper concludes by exploring the potential of bridging development economics and agribusiness research to inform the future agroindustrialization research agenda

marketing cooperative vs commission agent the turkish dilemma on the modern fresh fruit and vegetable market in turkey the wholesale markets law was enacted in 1995 to facilitate small scale growers access to the fresh produce market cooperatives and commission agents have thus become the main marketing structures available to small scale fresh produce growers to supply supermarkets and comply with their new requirements in this paper we question the advantages and disadvantages that confront small farmers with respect to those marketing structures to allow for market matching or quality upgrading drawing on ownership and transaction cost arguments we use an analytical framework to identify and compare the costs of these marketing organizations based on data collected through a large number of interviews with stakeholders we show that commission agents and credit cooperatives tend to be more efficient than traditional cooperatives as regards sales performance and decision costs however the lack of apparent competition between commission agents does not allow for sufficient provision of incentives for producers to invest in high quality production consequently credit cooperatives are the only structure progressively turning to strategies of quality upgrading and supermarket supply the flipside of such strategies is that they may lead to the marginalization of small scale farmers

measuring productive efficiency in multiple product agribusiness firms a dual approach measuring retail fertilizer plant efficiency is difficult given the range of outputs produced by these multiple product firms a frontier multiproduct cost function was employed to measure productive efficiency results suggest the average plant could lower variable costs by 10 through more effective operations allocative inefficiency was minimal indicating management should focus on improving technical efficiency the limitations of employing a single product model in a multiproduct situation are demonstrated

pooling access and countervailing power in channel governance fruit and vegetable marketing organization the greenery has experienced various governance structure changes like horizontal merger forward integration and the emergence of grower associations a multilateral incomplete contracting model is presented to account for these changes by analysing the interactions between pooling access and countervailing power this model does not only explain the changes at the greenery but it contributes also to the design of efficient channel governance this paper was accepted by pradeep chintagunta and preyas desai special issue editors this paper was accepted by pradeep chintagunta and preyas desai special issue editors

contract farming smallholders and rural development in latin america the organization of agroprocessing firms and the scale of outgrower production abstract this paper demonstrates how contract farming functions as an economic institution and explores the causes of the observed variation in the scale of outgrower production in latin america we outline how market imperfections and transaction costs influence the decision of agroprocessing firms to contract out vertically integrate or use spot markets to obtain raw product the paper demonstrates how market conditions are likely to be associated with particular outgrower characteristics under contract farming an analysis of the mexican frozen vegetable industry illustrates determinants of successful and unsuccessful small scale contracting and suggests alternative policies to promote contract farming with smallholders

understanding retained patronage refunds in agricultural cooperatives the share of patronage refunds retained by an agricultural cooperative is modeled as arising from the portfolio decision of its median member the member is viewed as maximizing expected utility by allocating wealth between investments in farming assets and equity in the cooperative determinants of the share of patronage refunds retained are the expected rates of return on these two investments their variances their covariance and the expected future share of patronage and its variance empirical examinations of aggregate cooperative data and cross section analysis of seventeen regional supply cooperatives are found to be consistent with the model

the role of intermediaries in enhancing market efficiency in the ethiopian grain market this paper investigates the impact of the institution of brokerage on the optimal search behaviour and the welfare gains and losses of traders in the ethiopian grain market without brokers the privately optimal search diverges from the socially optimal search due to the positive spill over of individual search behaviour numerical analysis using the actual distribution of search costs and search efficiency obtained from primary data collected in ethiopia reveals that this externality is partially internalised by the presence of brokers and that total welfare increases significantly due to a more efficient allocation of search effort

cooperatives and contracting in agriculture the case of west liberty foods the west liberty foods turkey cooperative was formed in 1996 to purchase the assets and assume operations of louis rich foods an investor owned processing firm which at the time announced the imminent shutdown of its west liberty iowa processing facility we study the creation and performance of this new generation cooperative using field interviews with grower members and company management we describe changes before and after the buyout in the contractual apparatus used for procuring live turkeys and in the communication requirements work expectations and financial positions of growers during the private ownership period most of the inputs except labor and facilities were provided by the firm there was substantial supervision of the growers actions growers faced little price and production risk and growers equity was due largely to ownership of land and other farm assets our interviews reveal that after cooperative formation growers were exposed to considerable additional risk monitoring of growers by the firm was less intensive grower time and effort commitments to turkey production increased substantially and a significant fraction of firm cooperative equity came from growers willingness to leverage their farm and personal assets and hence indirectly their existing relationships with local lenders we argue that some of these changes are consistent with a financial contract where asset pledging and its corollary risk generate higher work effort by growers and a reduction in agency rents these economies likely compensate for an organizational deadweight loss traditionally associated with cooperative governance

cooperative enterprise an alternative conceptual basis for analyzing a complex institution a recent review of the theoretical literature on cooperative enterprise in agriculture concludes the formal treatment of agricultural co operation is currently impoverished by a long period of neglect levay p 40 the years between the early 1940s and the early 1960s were a period of creative ferment among cooperative theorists the most durable products of which were several variants of the model of the profit seeking firm from neoclassical price theory with the profit maximization objective replaced by other simple maximizing criteria e g enke helmberger and hoos such models are capable of generating hypotheses about cooperative price and output levels but more comprehensive theoretical analogues are necessary to investigate other important aspects of the modern complex cooperative corporation in agriculture it is the development of these latter that has suffered neglect while the past two decades may have generated little progress in the futher development of cooperative theory they have been productive years for the development of more comprehensive alternatives to the simple profitmaximization model to explain the behavior of the modem complex investor owned corporation this development began with the ad hoc theorizing of the various managerial theories of the firm proceeded with the creation of a new institutional economics based on the concepts of transactions costs property rights and agency relationships and is currently at the stage of integrating these previous developments into a generalized neoclassical theory of organizations de alessi this paper is motivated by the belief that the evolving concepts of neoclassical organization theory hold considerable promise for the further productive development of cooperative theory the purpose of the paper is to apply some of these concepts in cursory fashion to cooperative organizations and thereby suggest a framework for the eventual development of a more comprehensive organization theory of cooperatives

marketing cooperatives and financial structure a transaction costs economics analysis the relationship between the financial structure of a marketing cooperative mc and the requirement of the domination of control by the members is analysed from a transaction costs perspective a mc receives less favourable terms on outside equity than a conventional firm because the decision power regarding new investments is not allocated to the providers of these funds this is a serious threat to the survival of a mc in a market where efficient investments are characterised by an increasing level of asset specificity at the processing stage of production a mc is predicted to be an efficient organisational form when the level of asset specificity at the processing stage of production is at a low or immediate level compared to the level of asset specificity at the farming stage of production

strategic investment and the co existence of labour managed and profit maximising firms the authors examine firm profitability in mixed duopoly equilibrium with one labor managed lm firm and one profit maximizing pm firm and with strategic investment conventional wisdom suggests that firms deviating from profit maximization will suffer forced exit in the long run the authors reverse this conclusion in mixed lm pm duopoly with strategic investment no equilibrium can have both firms making zero profits and pm profitability implies lm profitability but not the converse adverse parameter shifts would cause the pm firm to exit first empirical evidence is consistent with this prediction of robust market survivability of lm firms

should central banks target consumer prices or the exchange rate in this article we consider two arguments suggesting that monetary authorities in an open economy should target output price inflation and not consumer price inflation the first suggests that output price inflation corresponds to the distortions caused by price rigidity the second shows how policy rules involving consumer price inflation can induce instability because of the feedback from interest rates to consumer price inflation via the exchange rate we examine both arguments in the context of an open economy which is subject to a range of shocks we show that both arguments remain robust but that there is a case for including a terms of trade or real exchange rate gap term in the authorities welfare function alongside the output gap and output price inflation

strategic r d policy this paper uses a natural extension of lee and wilde s 1980 model to show that the outcome of technological competition between firms or countries depends on the resolution of two forces the profit incentive and the competitive threat using a duopoly model of a patent race the paper illustrates that by understanding the relative strength of these two forces one can not only go a long way to understanding the outcome of these races but also obtain crucial insights into the desirability of various r d policies the particular example considered in the paper is the subsidizing of r d effort copyright 1989 by royal economic society

measuring the importance of transaction costs in cattle marketing transaction cost economics recognizes that transactions do not occur in a frictionless economic environment information negotiation and monitoring costs arise in any transaction and can influence the vertical coordination outcome this paper demonstrates a method for measuring the influence of transaction costs on slaughter cattle marketing the paper focuses on the factors affecting the choice between liveweight live ring auction and deadweight direct to packer sales using tobit limited dependent variable analysis data from a survey of uk farmers are used to estimate the relative importance of various transaction costs and farm characteristic variables for the choice of marketing channel

target zones and international policy coordination the contrast between the necessary and sufficient conditions for success abstract this paper distinguishes between the necessary and sufficient conditions for adopting exchange rate target zones for improving macroeconomic performance the necessary conditions are easily satisfied but it is much more difficult to design a targetting system which satisfies the sufficient conditions when the exchange rate is an intermediate target on that criterion the gains may be smaller than previously estimated however target zones have important practical advantage they are effective in promoting stability and as a simple but uncontroversial way of securing the coordination necessary to prevent policy makers adopting inefficient or competitive policies

broiler production contracts as a multi agent problem common risk incentives and heterogeneity the broiler industry presents two puzzles regarding production contracts why do processors control growers inputs and why do they use a statistically insufficient estimator to calculate growers compensation this paper provides an agency theoretic framework that explains these puzzles in terms of processors response to grower heterogeneity and production risk and to grower risk aversion processors control inputs to reduce the information rents paid to agents by forcing agents to bear additional income risk through the use of an imprecise estimator processors can increase profits due to the combined moral hazard adverse selection nature of the informational problem

the future of u s agricultural cooperatives a neo institutional approach thirty years ago helmberger speculated that industrialization of agriculture would lead to the demise of farmer cooperatives helmberger 1966 p 1434 in responding to helmberger s prediction abrahamsen countered by suggesting that as industrialization of agriculture evolved cooperatives would increasingly become the farmer s integrating agency abrahamsen p 1442 in this paper i examine these two divergent opinions by a briefly describing the structural and strategic evolution of u s farmer cooperatives since the helmberger and abrahamsen h a forecasts b utilizing recent developments in neo institutional economic organizational economic theory to generate hypotheses regarding structural and strategic shifts in u s agricultural cooperatives and c further applying neo institutional economics to speculate what the future might hold for u s producerowned and controlled agricultural cooperatives

the boundaries of the firm revisited why do firms exist what is their function and what determines their scope these remain the central questions in the economics of organization they are also central questions for business executives and corporate strategists the worldwide volume of corporate mergers and acquisitions exceeded 1 6 trillion in 1997 it is hard to imagine that so much time effort and investment bankers fees would be spent on adjusting firm boundaries unless there was some underlying economic gain indeed the exceptional levels of merger and acquisition activity over the past two decades are a strong indication that economically significant forces do determine organizational boundaries the study of firm boundaries originated with the famous essay by coase 1937 who raised the question of why we observe so much economic activity inside formal organizations if as economists commonly argue markets are such powerful and effective mechanisms for allocating scarce resources coase s answer was in terms of the costs of transacting in a world of imperfect information when the transaction costs of market exchange are high it may be less costly to coordinate production through a formal organization than through a market in large part thanks to the work of williamson 1975 1985 recent decades have seen a resurgence of interest in coase s fundamental insight that firm boundaries can be explained by efficiency considerations our understanding of firm boundaries has been sharpened by identifying more precisely the nature and sources of transaction costs in different circumstances in the process the focus of

market leadership with a sequence of history dependent patent races this note extends the results of j vickers 1986 examining the consequences on the evolution of market structure of having payoffs and thus profits and incentives which depend on the technological history of the firms in a simple duopoly model the author determines the conditions under which the technological leadership of a firm is strengthened over time increasing dominance or is progressively eroded by the rival catching up this reformulation of vickers model can also accommodate incremental innovations i e technological changes that do not allow the innovator to overtake the rival copyright 1989 by blackwell publishing ltd

the health of farmer based organisations in ghana organisational diagnostics and governance implications abstractin this paper we use primary data on 500 ghanaian fbos collected through semi structured interviews and risky dictator games rdg to test the validity of the cooperative life cycle theory and formulate a measure of cooperative health we first define cooperative health as the alignment of heterogeneity in risk preferences and the effectuation of collective investments we then use cluster and correlation analysis to categorize fbos on the basis of their health and correlate these typologies with various performance indicators our findings reveal that organizational health is generally low as there are only a few organizations that manage to provide member farmers with both risk sharing and cost saving opportunities further healthier fbos experience stronger growth in membership while health is lower in fbos that have been established for the purpose of benefitting from external incentives

assessing the competitive interaction between private labels and national brands in this article we employ the linear approximate almost ideal demand system la aids and specify price reaction equations derived under the la aids specification we perform intracategory analyses using data on six individual categories as well as a pooled analysis on a sample of 125 categories and 59 geographic markets we find that consumer response to price and promotion decisions demand and firm pricing behavior supply jointly determine observed market prices and market shares further estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price copyright 2000 by university of chicago press

agrifood industry transformation and small farmers in developing countries summary this article introduces this special issue on the rapid transformation of the agrifood industry in developing countries and its effects on small farmers we review the literature from the late 1980s to the present and find evidence first of food processing then retail transformation and mixed evidence of impacts on small farmers both inclusion particularly with resource providing contracts and exclusion sometimes from scale constraint sometimes from inadequate non land assets the special issue papers contribute to the debate by confirming the mix of cases of inclusion and exclusion the cases are main in horticulture and dairy key hopes for smallholder development

collective action for smallholder market access abstract the opportunity for smallholders to raise their incomes increasingly depends on their ability to compete in the market yet there are many failures in rural markets in developing countries that make it difficult for them to do this understanding how collective action can help address the inefficiencies coordination problems or barriers to market access is particularly important this paper draws on the case studies in this special issue and on other literature to examine the conceptual issues and empirical evidence on the role of collective action institutions in improving market access for the rural poor applying insights from studies of collective action in natural resource management the paper examines what conditions facilitate effective producer organizations for smallholders market access with special attention to the characteristics of user groups institutional arrangements types of products staples perishables and other commodities markets local domestic and international and external environment the paper also identifies policies and interventions that facilitate collective action for market access among smallholders and examines whether the public sector private sector and or civil society is best positioned to provide such interventions

demand for farm output in a complete system of demand functions demand interrelationships for farm outputs that are theoretically consistent with consumer demand and marketing group behavior provide important linkages between retail and farm prices a conceptual model based on reduced form specifications for retail and farm prices is formulated and applied empirically to a set of eight disaggregated food commodities this approach circumvents the need for retail quantities which are frequently unavailable for disaggregated food commodities the results are consistent with theory and generally indicate significant substitution between farm and marketing inputs except for poultry derived demand elasticities are at least 40 larger compared to those derived assuming fixed proportions

dynamic r d competition the authors study a simple two stage stochastic patent race involving two firms they examine the behavior of the participants as they gain the lead or fall behind in the race the authors find that the leader engages in rd 2 a policy of issuing patents for intermediate research results and 3 the effects of research joint ventures whereby the firms coordinate their initial research efforts and share their results copyright 1987 by royal economic society

cooperative pricing and scale efficiency the case of korean rice processing complexes unlike most investor owned enterprises cooperatives often have freedom to choose among a variety of firm objectives using 2002 2008 plantand province level data we ask in the present article which of several alternative maximands a korean cooperative rice processing firm pursues in contrast to earlier studies farmer member supply functions are incorporated into the cooperative s optimization framework we show that only large cooperative firms have operated at efficient scale while small and medium sized ones have been scale inefficient because the latter operate where scale returns are increasing mergers of small and medium sized cooperatives likely would be cost reducing and member return enhancing

the international monetary system should it be reformed a casual glance through the proceedings of past annual meetings of the american economic association reveals that in almost every year during the past twenty years president elects of the aea have devoted at least one session to an examination of issues concerning the international monetary system prominent on the agenda has been the question of reform how should the international monetary system be reformed so as to function more effectively the premise underlying this question is that the international monetary system has failed and that it must be reformed by an institutional change in what follows i present some skeptical notes on both the verdict on the failure of the system and on some proposals for reform especially the target zones proposal to set the stage it is worth noting that one of the main sources of disenchantments with the present monetary system has been the unpredictability of exchange rates there has been nothing more confusing than reading through the ex post journalistic explanations offered for the day to day changes in the u s dollar for example over the past few years we were told that the dollar fell because the money supply grew faster than expected thereby generating inflationary expectations but on another occasion we were told that the dollar rose because the money supply grew faster than expectedthereby generating expectations that the fed is likely to tighten up and raise interest rates on another date we were told that the dollar fell since the budget deficit exceeded previous forecasts thereby generating inflationary expectations on the belief that the fed will have to monetize the deficit but on another occasion we were told that the dollar rose since the budget deficit exceeded previous forecasts thereby generating expectations that government borrowing needs will drive up interest rates since the fed is unlikely to give up its firm stance on yet another day we were told that the dollar fell since oil prices fell thereby hurting mexico and other debtriddenoil producing countries whose bad fortune may bring about the collapse of important u s banks but on another occasion we were told that the dollar rose since oil prices fell thereby helping the debt ridden oil consuming countries whose improved fortune will help the vulnerable position of important u s banks more recently the dollar changed again and this time the explanation was a bit more sophisticated the dollar changed because the extent of the revision of the estimated gnp growth rate was smaller than the expected revision of previous forecasts of these estimates one cannot but sympathize with the difficulties shared by newspaper reporters and financial analysts who feel obligated to come up with daily explanations for daily fluctuations of exchange rates and one can only imagine the deep frustration that yielded the recent headline in the international herald tribune according to which the dollar rose on no news the dismal performance of short term forecasting does not reflect a lack of effort rather it is an intrinsic characteristic of efficient asset markets difficulties in forecasting short term indices of stock markets like the dow jones index do not call however for a reform of the way stock markets operate for similar reasons one should not assess the performance of the international monetary system on the basis of short term forecastability of exchange rates this does international monetary fund washington d c 20431 university of chicago and national bureau of economic research the research reported here is part of the nber s research programs in international studies and economic fluctuations any opinions expressed are my own and not those of the national bureau of economic research 205

monetary and fiscal policy interaction the current consensus assignment in the light of recent developments in the last few years papers have begun to analyse optimal monetary and fiscal policy in models incorporating nominal rigidities where social welfare is derived from the utility of agents this article examines whether this analysis provides support for the consensus assignment where monetary policy controls demand and inflation and fiscal policy controls government debt we argue that the basic structure of new keynesian models implies that monetary policy dominates fiscal policy as a means of controlling inflation no similar dominance appears to operate for fiscal policy and debt if debt has to return to its initial level after shocks

the future of small farms new directions for services institutions and intermediation summary efficient pre and post harvest services are essential if small farms in high potential areas are to intensify production contribute to economic growth and reduce poverty they also matter if small farms in marginal areas are to manage their natural resource base in the face of growing population pressure and climate change difficulties that smallholders face in accessing services are reviewed showing how incentives for commercial delivery of services to smallholders differ between staple food traditional cash crop and high value product supply chains the major challenge in service delivery to smallholders in much of africa concerns coordination of service development and delivery different forms of intermediary institution for achieving such coordination are examined

ownership structure in agrifood chains the marketing cooperative globalization technological developments and consumer concerns press farmers and food producers to enhance product innovation and to seek more efficient production and distribution structures these changes in agrifood markets shift the relative importance of the investments by different chain partners it may therefore be necessary to change the allocation of ownership of essential assets to induce agents to make those investments that generate the chain optimum this article analyzes the impact of ownership structure on investments in a three tier supply chain from an incomplete contracting perspective circumstances are determined in which a marketing cooperative is the unique first best ownership structure

agricultural markets as relative performance evaluation relative performance schemes such as tournaments are commonly used in markets for a variety of livestock and processing commodities while explicit versions of these schemes are rarely used in markets for fresh fruits and vegetables and specialty grains we show how contracts for these latter commodities do in fact provide relative performance incentives albeit indirectly via a payment mechanism that depends on market prices in such contracts compensation is often an increasing function of revenue this implements a relative performance scheme by making each grower s payment an increasing function of his own output but a decreasing function of other s output in an important 1982 article holmstr om models the problem facing a group of agents each of whom produces an observable quantity of some good by taking an unobservable action a rather robust conclusion from this line of inquiry is that when the production of one agent is not independent of the production of another then the compensation awarded to the first agent should depend not only on his own production but also on the output of others in particular if agents production is positively correlated because of some common shock for example then an agent s compensation should be larger when other agents output is smaller a phenomenon which holmstr om terms relative performance evaluation relative performance evaluation ought to be particularly important for agricultural producers and the various intermediaries who purchase their output these producers face considerable common risk from aggregate production shocks and so one would expect that relative performance evaluation could improve efficiency in fact certain types of agricultural intermediaries do use explicit relative performance schemes as predicted by

regulating innovative activity abstract without spillovers and under the winner take all hypothesis there is overinvestment in r d in a non cooperative equilibrium due to duplication of effort we show that a public firm can represent an effective instrument in the hands of a policymaker to mitigate such a problem in particular it is proved that in a mixed duopoly i each firm invests less than in a private duopoly and ii although the expected time of innovation is postponed social welfare is higher than in a private duopoly