Marketing cooperatives : A model of the output decisions of the Cloverdale lettuce and vegetable cooperative
type: CreativeWork
description: Marketing cooperatives play an important role in agricultural activities. Institutional support for cooperatives is based on the idea that, collectively, farmers can achieve benefits than, individually would be difficult to obtain. Head lettuce in the Lower Mainland region of British Columbia is marketed and distributed by a central selling agency which is organized as a producer cooperative. Members of the cooperative are subject to regulations, in the form of market quota allocations which control the quantity of head lettuce they can sell through their cooperative. This study describes and analyses the market structure of the head lettuce industry in British Columbia to ascertain and quantify the source of benefits to producers from cooperative marketing within a regulated marketing environment. A model of the industry is constructed to characterize the market for head lettuce in B.C. The parameters which affect consumer demand and farm supply are estimated with econometric equations. A feature of supply is that current production decisions are influenced by the producer's market quota allocation which, in turn, is determined by the producer’s past sales. The market quotas are believed to have constrained supply response and this is borne out by the empirical results which indicates a highly inelastic supply curve. The demand for head lettuce is also estimated to be inelastic. This result is not surprising since head lettuce is regarded as a basic commodity by consumers. The estimated supply and demand elasticities are used to derive linear supply and demand curves at the cooperative and wholesale levels. These are used with the observed 1990 price and quantity levels to calibrate a model of the B.C. head lettuce industry. A counterfactual model is then formulated to simulate a market with no controls on output. Given an inelastic wholesale demand, the simulation results indicate that for very small increases in cooperative output, large decreases in price occur.…
abstract: Marketing cooperatives play an important role in agricultural activities. Institutional support for cooperatives is based on the idea that, collectively, farmers can achieve benefits than, individually would be difficult to obtain. Head lettuce in the Lower Mainland region of British Columbia is marketed and distributed by a central selling agency which is organized as a producer cooperative. Members of the cooperative are subject to regulations, in the form of market quota allocations which control the quantity of head lettuce they can sell through their cooperative. This study describes and analyses the market structure of the head lettuce industry in British Columbia to ascertain and quantify the source of benefits to producers from cooperative marketing within a regulated marketing environment. A model of the industry is constructed to characterize the market for head lettuce in B.C. The parameters which affect consumer demand and farm supply are estimated with econometric equations. A feature of supply is that current production decisions are influenced by the producer's market quota allocation which, in turn, is determined by the producer’s past sales. The market quotas are believed to have constrained supply response and this is borne out by the empirical results which indicates a highly inelastic supply curve. The demand for head lettuce is also estimated to be inelastic. This result is not surprising since head lettuce is regarded as a basic commodity by consumers. The estimated supply and demand elasticities are used to derive linear supply and demand curves at the cooperative and wholesale levels. These are used with the observed 1990 price and quantity levels to calibrate a model of the B.C. head lettuce industry. A counterfactual model is then formulated to simulate a market with no controls on output. Given an inelastic wholesale demand, the simulation results indicate that for very small increases in cooperative output, large decreases in price occur.…
author: Latham, Susie
language: eng
date published: 1992
date modified: 2026-07-24T05:07:26Z
provider: University of British Columbia
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of British Columbia

PropertyValue
property ID: Handle
value: http://hdl.handle.net/2429/1582