Benefits of a marketing cooperative in transition agriculture: Mórakert purchasing and service co-operative

Abstract

The paper analyses the potential benefits of marketing cooperatives in Hungary, employing a transaction cost economics framework. We found that the purchased quantity, the existence of contracts, flexibility and trust are the most important factors farmers consider when selling their products via a cooperative. The most striking result is that diversification has positive influences on the share of cooperatives in farmers’ sale. Furthermore, farmers with larger bargaining power have less willingness to sell their product to the cooperative. Surprisingly, asset specificity has rather negative effects on the share of cooperatives in members’ sales.