Abstract
Agricultural producer organizations are considered to be an efficient way for farmers to build up bargaining power, thereby increasing farmers’ incomes. While making a contribution to the research on the longevity of cooperatives, we tried to identify some regularities concerning the survival of these entities in the specific context of transition economies. In this paper, we look more closely at potential relationships between the development of producers’ organizations (POs) and the size of their membership. Then, we link the size of the membership with the concept of social capital. For our purposes, it is necessary to depart from using a general concept of social capital and to differentiate between bonding and bridging social capital. Our results, based on two unique datasets from Poland, clearly showed that relatively larger POs have higher rates of survival. This, in turn, is correlated with the stock and the type of social capital. The main contribution of the study is in identifying the relevance of the size of the membership of newly-established POs to their survival. The findings are followed by policy recommendations that may be useful in the context of promoting farmers’ cooperation in recognizing the low stock of social capital, specifically bridging social capital.
Highlights
The issue of the relatively weak bargaining power of family farms as compared to companies operating at other stages of the food chain is an important benchmark in the debate on the effective market organization of the agricultural sector [1,2,3,4]
Since the process of establishing itself in the free market economy started in Poland after 1989, we focus on the issue of collective action and its formation and development at the initial stage of operation
For the purposes of our study, the observation of Valentinov—that there are some limitations of cooperation which emerge as a consequence of the insufficient availability of social capital, that could be due to the expansion of the membership base—was insightful ([65], p. 12)
Summary
The issue of the relatively weak bargaining power of family farms as compared to companies operating at other stages of the food chain is an important benchmark in the debate on the effective market organization of the agricultural sector [1,2,3,4]. Cooperation in producers’ organizations (POs) may be justified by the advantages of the economies of scale and the willingness to minimize transaction costs accompanying the processes of producing and selling agri-food products [7,8] It should enable the concentration of the supply of agricultural products, thereby facilitating negotiations relating to the conditions of their sale. By creating the possibility for planning joint production and concentrating demand for agricultural inputs, it ought to reinforce the farmers’ negotiation position vis-a-vis the suppliers of agricultural inputs By making it possible to take advantage of economies of scale, such cooperation may enable farmers to cover the costs of investment projects aimed at capturing new markets, improving the quality of the commodities produced, or creating and promoting their own brands. It is worthwhile mentioning that a side effect of the producer groups’ existence might be the links between producers, processors, and commercial agents; these links could be important for the efficient functioning of the market, resulting in market and price stabilization [6,9]
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
