Market power and bargaining in agrifood markets: A review of emerging topics and tools

Abstract

Recent developments in modern agri-food markets have called into question the predictive capability of the traditional models and tools used by agricultural economists to assess and measure market power. As a result, agricultural economists are on a quest for novel methods and approaches that surpass the traditional market power construct. In this article, we present an essential overview of the evolution of the literature concerning power relationships in agrifood value chains. The goal of this review is to emphasize recent conceptual and empirical approaches, as well as highlight topics of interest that are likely to shape the direction of future analyses of market power and bargaining in the agrifood sector. [EconLit citations: L1,

The Role of Factors Affecting the Adoption of Environmentally Friendly Farming Practices: Can Geographical Context and Time Explain the Differences Emerging from Literature?

“…Nevertheless, the impact of price premiums on farmers' decisions largely depends on several issues, like the structure of the supply chains and the different bargaining power held by firms at the different stages of the chain which affects the magnitude of the value transmission along the chain upwards to the farmers [60]. Moreover, other complex vertical relationships established in the value-chain may affect farmers decisions on some EFFPs adoption, like the effect of public food quality certification schemes (e.g., the Italian regional schemes for integrated pest management), the quality standards, and the code of practices [61,62] established by the processors and more often by large-scale retailers, generally in a multidimensional buyers power context (see [63][64][65] for a review). Despite the weight value-chain-related factors may have in farmers' decisions to adopt EFFPs, or at least some of them, no papers including these factors in adoption models were found: hence, we mentioned them in our framework (dashed box in Figure 1) but could not include them in our review.…”

Exploring the Sustainability of the Cooperative Model in Dairy: The Case of the Netherlands

“…Evidence of the bargaining power impact of cooperatives is hard to obtain, due to data constraints and the strategic response of noncooperative firms [12]. Still, a number of studies have shown that the existence of cooperatives has led to higher prices for farmers compared to the situation where no cooperatives existed.…”

Farmers’ Bargaining Power and Input Prices: What Can We Learn from Self-Reported Assessments?1

“…In response to this, an extensive literature has emerged to improve our understanding of power distribution throughout the agri-food chain. As Bonanno et al argued, the recent literature shifts from the "traditional" market power explanations to ones including concepts such as bargaining power, countervailing power, buyer power, and the role of contracts as governance tools to manage relationships in the agri-food chains (Bonanno et al 2018). These studies typically show both problems faced by farmers as well as opportunities and solutions to improve their situation (e.g., Dries et al 2009;Francesconi et al 2010;Trebbin 2014).…”