Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications

Posted: 1 Oct 2007

See all articles by Sergio H. Lence

Sergio H. Lence

Iowa State University - Department of Economics

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR

Dermot J. Hayes

Iowa State University - Center for Agriculture and Rural Development (CARD)

William Foster

Pontifical Catholic University of Chile

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Abstract

We examine the incentives of atomistic producers to differentiate and collectively market products. We analyze market and welfare effects of alternative producer organizations, discuss circumstances under which they will evolve, and describe implications for the ongoing debate between the EU and the United States. As fixed costs of development and marketing increase and the anticipated market size falls, it becomes essential to increase the producer organization's ability to control supply to cover the fixed costs associated with the introduction of differentiated products. Counterintuitively, stronger property right protection for producer organizations may enhance welfare even after a differentiated product has been developed.

Suggested Citation

Lence, Sergio H. and Marette, Stéphan and Hayes, Dermot James and Foster, William, Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications. American Journal of Agricultural Economics, Vol. 89, No. 4, pp. 947-963, November 2007, Available at SSRN: https://ssrn.com/abstract=1018134 or http://dx.doi.org/10.1111/j.1467-8276.2007.01036.x

Sergio H. Lence (Contact Author)

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR ( email )

Univeriste des Sciences Sociales
21, Allee de Brienne
Toulouse 31000
France

Dermot James Hayes

Iowa State University - Center for Agriculture and Rural Development (CARD) ( email )

Ames, IA 50011
United States
515-294-6185 (Phone)

William Foster

Pontifical Catholic University of Chile

Ave. Vicuna Mackenna 4860, Macul
Santiago
Chile

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