A Review of the Empirical Literature on Farmer Cooperatives: Performance, Ownership and Governance, Finance, and Member Attitude

Grashuis, Jasper; Su, Ye

doi:10.1111/apce.12205

Cited by 142 publications

(117 citation statements)

References 68 publications

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“…Over time, farmer cooperatives have become successful and even dominant in Europe and the United States [2][3][4], and evidence of their importance in the developing world is mounting [5,6].…”

Section: Introductionmentioning

confidence: 99%

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An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments

Grashuis

2018

Sustainability

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Farmer cooperatives have been portrayed in the literature as flawed and complex organizations with ambiguous objectives. However, research on the observed survival of farmer cooperatives in spite of their weaknesses and limitations is scarce, in part because academic attention to cooperative performance has been static and introspective. Using evidence collected from case studies and print media publications, this paper contributes to the literature with a qualitative study of farmer cooperatives which spurred survival and longevity by means of strategic adaptation in response to four current developments in the external environment: industry consolidation, consumer segmentation, price volatility, and policy change. The qualitative study concludes farmer cooperatives in general respond to such developments by means of organizational growth. Common strategies are vertical integration, geographic expansion, and portfolio diversification. While survival and longevity are promoted in theory, strategic adaptation also often facilitates the pursuit of investor-oriented as opposed to user-oriented objectives. In some scenarios, member ownership and control may become burdensome to the business and prompt conversion to another structure if further adaptation to internal and external developments is unsuccessful. More research is therefore needed to explore the dynamic and variable impact of strategy on cooperative survival.

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Section: Introductionmentioning

confidence: 99%

“…As indicated by the theoretical as well as the empirical literature [6,7], farmer cooperatives are flawed and complex business organizations with ambiguous objectives. Current developments in the agri-food industry expose their various weaknesses and limitations and may impact their survival.…”

Section: Introductionmentioning

confidence: 99%

An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments

Grashuis

2018

Sustainability

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“…Most studies in the empirical literature use common financial ratios (Benos et al. , Grashuis and Su ), such as return on equity or return on assets, but FPOs do not necessarily pursue profit maximization or some similar objective (Soboh et al. ).…”

Section: Methodsmentioning

confidence: 99%

“…Depending on the conceptualization of the FPO as an extension of the farm or an independent firm, there may exist multiple objectives with certain parameters and constraints which do not allow a static or dynamic solution. Most studies in the empirical literature use common financial ratios (Benos et al 2018, Grashuis andSu 2019), such as return on equity or return on assets, but FPOs do not necessarily pursue profit maximization or some similar objective (Soboh et al 2009). Therefore, our empirical study incorporates two different outcome variables: (i) net sales, and (ii) net income (see Table 1).…”

Section: Methodsmentioning

confidence: 99%

Returns to Debt and Equity in Farm Producer Organizations

Grashuis

2019

Ann Public Coop Econ

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While the capital structure irrelevance proposition is the point of departure in corporate finance, it is unknown if debt‐or‐equity decisions matter to farm producer organizations. To inform decisions of capital acquisition, a panel study is conducted to estimate the relationships of different types of debt (current, long‐term) and equity (allocated, unallocated) to the financial performance of 707 farm producer organizations in the United States during the 2005–2011 period. Using 3,120 observations, the panel analysis indicates net sales in period t is increased by $1.97, $9.59, and $4.01 with an addition of $1 in current debt, allocated equity, or unallocated equity in period t‐1. Furthermore, the magnitude of the positive relationship of an additional dollar of allocated (unallocated) equity to net income is estimated at $0.32 ($0.14). We thus reject the notion managers and directors of farm producer organizations should decide to use debt or equity with a coin toss.

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“…The common example might be the case when the members gradually redeem cooperative's purchased equipment or technologies with the purpose to individualize the property and exclude opportunistic behavior of members. As a result, some agricultural cooperatives, characterized by economic sustainability and striving for continuous development, often modify organizational structure by introducing various innovations regarding position of cooperative members as patrons, managers and owners in a way that ignores some traditional principles [14].…”

Section: The Principle Of a Voluntary And Open Membership Is A Basic mentioning

confidence: 99%

Assessment of Agricultural Cooperatives’ Performance in Russia: The Case of the Kurgan Region

Golovina¹,

Antonova²,

Abilova³

2020

Proceedings of the Ecological-Socio-Economic Systems: Models of Competition and Cooperation (ESES 2019)

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Agricultural cooperation, especially in a current socio-economic, political and institutional environment, has a significant impact on the development of agricultural economy, rural communities and rural territories. The effectiveness of agricultural cooperative performance depends on the government activities aimed at creating agricultural cooperatives and supporting them in terms of information, consulting and finances. It also depends on the scientific concepts used for determination of modern cooperative policy instruments and strategies. The assessment of agricultural cooperatives' performance in the Kurgan Region (Russia) indicates that traditional type cooperatives, set-up in the modern institutional conditions, result in low performance level of such cooperatives. New, modern features of cooperatives, contradicting the traditional cooperative model, and reflecting entrepreneurial behavior of organizations, have emerged in the last several years. This study has undertaken the in-depth interviews with potential and existing cooperative members in the Kurgan region. Results of the study indicate the importance of formal and informal institutions for successful development of agricultural cooperation, and the importance of compliance of cooperative principles to the currently existing institutional environment. Study results show, that present formal and informal institutions lead to the low effectiveness of agricultural cooperatives' performance. A traditional cooperative model is hard to be well-functioning within the modern institutional environment.

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A Review of the Empirical Literature on Farmer Cooperatives: Performance, Ownership and Governance, Finance, and Member Attitude

Cited by 142 publications

References 68 publications

An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments

An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments

Returns to Debt and Equity in Farm Producer Organizations

Assessment of Agricultural Cooperatives’ Performance in Russia: The Case of the Kurgan Region

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