Determinants of Successful Cooperation in Agricultural Markets: Evidence from Producer Groups in Poland

Abstract

The main question posed in the paper is why some cooperative arrangements in agricultural markets survive and succeed while others fail. Data were collected from 62 Polish farmer cooperative organizations called producer groups. The main aim of those organizations was to organize joint sales of output produced individually by their members. Some of the groups were functioning effectively while others had disbanded or were no longer performing their essential functions. Variables such as the leader's strength, previous business acquaintances, initial selection of members, and number of members have a significant positive impact on the likelihood of success of the researched organizations.

Rural development strategies and government roles in the development of farmers’ cooperatives in China

“…The results of this study echo the finding of Banaszak (2008) that initiators and leaders are critically important for the successful development of FPCs, especially in the context of China where the majority of farmers farm at a very small scale, have a low level of education and technical skills, and lack social and capital resources. Many cooperatives lack effective and dedicated leadership, as we found in the Yuexi FPC after the previous leader retired.…”

The changing nature of farmer collective action: introduction to the book

“…Thus, the only option left for smallholders is to enter vertical coordination schemes as a group (Coulter et al, 1999). Such a group not only reduces transaction costs for both farmers and buyer, it will also give farmers some bargaining power (Banaszak, 2008;Jia and Huang, 2011). In addition, a group has more options in creating access to input markets, technical assistance, and outside support from the state or NGOs.…”

Overcoming the legacy of the past? Analyzing the modes of governance used by the Polish agricultural producer groups

“…Banaszak (2008b), who analyzed the determinants of success and failure for producer groups, has shown that associations were more frequently among the groups that failed than among the groups that achieved either a partial or full success. Regarding the question of why an association was chosen, we saw that the extension service had a large influence.…”

“…Other groups chose it because it was considered a "loose" form that did not require capital investments There is also an interesting question about the outlying groups, which are scattered on the graphs presented in Figure 2; these graphs show a possible mismatch in their governance forms. All of the outlier groups, which had either a relatively large number of members or a relatively large amount of the invested capital (one LLC group had 185 members; one LLC had invested capital close to 445 700 PLN/118 400 EUR; one union had 700 members, and one association had 171 members), were still functioning, and they were ranked as partially successful on the scale proposed by Banaszak (2008b). However, even though LLCs are the most costly form, of the three LLCs with the lowest levels of invested capital (below 6000 PLN/1550 EUR), one group was completely successful, whereas two groups failed and were no longer functioning.…”