Thoughts on “economic essence” and integration roles of co-operatives in the agri-food economy

Szabó G., Gábor

Keywords: promotional (extension) type of co-operation, coordination, marketing co-operatives, structural co-operative principles, trust, transaction costs

Justification of co-operation includes a more diversified institutional structure, a number of economic reasons (securing the market for the long term, decreasing trans-action costs and risks, increasing the income of farmer-members etc.), as well as en-hancement of trust, informal connections and social capital among others. The pur-pose of this study is to shed some light on the “economic essence” of the so-called pro-motional (extension) type of agricultural cooperation with the help of Károly Ihrig’s co-operative theory. According to his approach, the (dynamic) analysis of the connection between the co-op and the member is the most important tool for revealing the “se-cret”, thus the economic and social interactions of (would be) members are at the cen-tre of the study. Briefly summarising the results of the research, it can be concluded that bigger countervailing power and higher market shares of producers have a positive message for the whole supply chain. This also includes consumers, who have access to more consistent and often better quality products. However, a low willingness to coop-erate and also a low level of trust and consumer awareness hold back the greater repli-cation of those producer-owned organisations; therefore education, the introduction of different forms of cooperation (collaboration) and establishment of an efficient incen-tive system are needed. We should pay attention to the preparation of producers and consumers with the help of adequate adaptation of good foreign experience.

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