This paper introduces and defines the concept of collective entrepreneurship. A review of the defensive single-level rent-seeking objective of traditional agricultural cooperatives is introduced followed by an analysis of recent studies documenting a shift in the objective functions of producers jointly integrating toward more multiple-level rent-seeking entities. This process of shifting from market failure-ameliorating collective action mechanisms toward rent-seeking group action organizations is labeled collective entrepreneurship. The justification for introducing this concept is based on the Olsonian premise that rational, self-interested individuals will not act to achieve their common or group interests without coercion or selective incentives.

Traditionally, farms expand by buying out a neighbour. But might remote partnerships be a better way of expanding a farm business given projected climate change and price volatility? This question is addressed using farm business financial modelling. Representative farms at 27 locations in Western Australia are constructed to enable comparison of the value of buying out a neighbour versus expansion using geographically distant joint venture (JV) partners. The farm models consider economies of size, bulk purchase price discounts, the variability and correlation of returns associated with farm expansion, and impacts of climate change. Random selection of a remote partner generates little improvement in wealth; on average only 2.3 and 1.6 per cent, respectively, under current and projected future climate across all locations. However, there is large variation in wealth appreciation opportunities for each location and between locations. Preferred partnerships are a function of each farm's characteristics. Locations highly preferred as JV partners under current climate are similarly preferred partners under projected future climate. The main sources of additional wealth come from economies of size advantages, risk‐spreading benefits of combining geographically separated farms and bulk discounts. Farmers seeking business expansion will often benefit greatly from careful selection of a remote partner.

A portfolio problem within agricultural cooperatives arises as a result of the traditional cooperative's property rights structure. As members' investment is proportionally tied to volume of patronage, they are prevented from adjusting their cooperative investment to reflect their appetite for risk at the cooperative level. If members develop differing preferences as to how the cooperative should best invest their capital, then conflict between sub groups of members may develop as to which forms of cooperative investment are preferred.

No abstract

No abstract