Konstantinos Giannakas

Organizational Commitment in a Mixed Oligopoly: Agricultural Cooperatives and Investor-Owned Firms

A number of agricultural cooperativeorganizations—prominent examples includeTri-Valley Growers and the SaskatchewanWheat Pool—currently face considerablefinancialand organizationalchallenges.Externally, these challenges include a grow-ing concentration in a number of sectors (e.g.,beef and pork packing) and a greater preva-lence of vertical integration and contracts.Internally, cooperatives (co-ops) encountergreater heterogeneity among members,greater property rights problems (Cook), anda decline in member commitment (Fulton1999). This latter factor has been cited asone reason for the declining market shareand poor financialperformance of a numberof co-ops (Fulton and Gibbings).The purpose of this article is to examinethe issue of member commitment in the con-text of a mixed oligopoly where co-ops andinvestor-owned firms (IOFs) compete witheach other in supplying a consumer good.

Process Innovation Activity in a Mixed Oligopoly: The Role of Cooperatives

This article develops a sequential game-theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector. The analysis examines an open-membership, input-supplying cooperative (co-op) that maximizes member welfare and finances its innovation activity through retained earnings. Analytical results show that the presence of the co-op can increase the arrival rate of innovations while reducing the price of agricultural inputs. Cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs.

Efficiency, technological change and output growth in Greek olive growing farms: a Box-Cox approach

This paper captures the relative contributions of input growth, technological change and technical efficiency to olive oil production growth for a panel data set of 125 Greek olive-growing farms for the period 1987 to 1993. A flexible generalized quadratic Box-Cox functional form is proposed to represent the underlying production technology. This functional specification copes with the problem of zero inputs and nests all widely used production frontiers. Empirical results show that the observed production growth is mainly due to increased input use since it was not accompanied by rapid introduction of technological innovations and improvements in efficiency levels.

Policy Design and Conservation Compliance on Highly Erodible Lands

We develop a game-theoretic model of heterogeneous producers in order to identify the economic determinants of producer noncompliance with the conservation provisions of the United States Department of Agriculture (USDA) policy on highly erodible lands. We evaluate the policy effectiveness in inducing compliance and adoption of conservation practices. The current policy design creates economic incentives for all noncompliant producers to masquerade as adopters and to claim government payments for which they are not entitled. Both theoretical and empirical results indicate that the increased income transfers to agriculture enacted under the latest Farm Bill will increase producer compliance and conservation activity on highly erodible lands. (JEL Q21)

Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating

This paper introduces misrepresentation and cheating into the policy analysis of output quotas and subsidies. Analytical results show that when cheating occurs output quotas are a less efficient means of income redistribution than is traditionally believed. As well, cheating increases the transfer efficiency of output subsidies. The result is that an all-or-nothing choice between quotas and subsidies will generally favor the use of subsidies. A combination of quotas and subsidies, however, usually remains the most efficient means of income redistribution through market intervention. Copyright 2000, Oxford University Press.

Market and Welfare Effects of Second-Generation, Consumer-Oriented GM Products

We examine the economic effects of the introduction of consumer-oriented genetically modified (GM) products into the food system by developing a model of heterogeneous consumers and producers that allows for vertical and horizontal differentiation between the products available to consumers. The model facilitates the estimation of consumer and producer surpluses in the product/utility and product/net returns spaces. Results show that the introduction of consumer-oriented GM products can change the relationship between GM and conventional and organic products from one of vertical to one of horizontal product differentiation and can enhance both economic welfare and the market acceptance and growth of agricultural biotechnology.

Agency and Leadership in Cooperatives

The poor financial performance of a number of previously successful agricultural cooperatives appears to be connected to member commitment, which in turn is linked to the decisions made by the cooperatives’ leaders. While cooperative members should have an incentive to hire leaders that promote strong organizational commitment, the evidence suggests this incentive is weaker than imagined. This paper shows that cooperatives that believe they have a well-defined and loyal membership are less likely to hire leaders that will enhance member commitment. Thus, historical success is no guarantee of future success and may in fact contain the seeds of failure.

Market and Welfare Effects of Mandatory Country-of-Origin Labeling in the U.S. Specialty Crops Sector: An Application to Fresh Market Apples

This study provides a new framework of analysis of the market and welfare effects of mandatory country-of-origin labeling (MCOOL) for fruits and vegetables that accounts for heterogeneous consumer preferences, differences in producer agronomic characteristics, and retailer market power. The market and welfare effects of MCOOL are shown to be case-specific and dependent on the labeling costs at the farm and retail levels, the strength of consumer preference for domestic products, the market power of retailers, the marketing margin along the supply chain, and the relative costs of imported and domestic products. Simulation results for the U.S. market of fresh apples indicate that domestic producers are the most likely beneficiaries of MCOOL, followed by domestic consumers. Being unable to exercise market power on consumers or suppliers of fresh apples, retailers will lose if the implementation of MCOOL entails fixed costs. Imports of fresh apples decline after MCOOL introduction.

Technical efficiency measures for olive-growing farms in Crete, Greece

This study attempts to contribute to the productivity literature of the agriculture of developing countries by exploring the distribution of technical efficiency over time among olive-growing farms operating in the southern part of Greece—specifically, the island of Crete. A balanced panel data set during the period 1987–93 is utilized for the estimation of the stochastic production frontier. The results show decreasing efficiency for farms since 1987 and suggest the need for a development strategy to improve their economic performance in the context of expected major changes in the Common Agricultural Policy. A further result is that farm size, the farmers education, the existence of an improvement plan, and land fragmentation are the most important factors explaining inter-farm variation in efficiency.

Spillovers, Efficiency, and Productivity Growth in Advertising

We develop a tractable theoretical framework for analyzing the effect of advertising efficiency and spillovers on productivity growth in advertising. Maintaining the separability assumption between sales and production technology, the proposed methodology relies on sales cost function decomposition of advertising productivity and the duality between media distance and sales cost functions. Utilizing a flexible Translog distance function, the methodology is applied to the advertising activity of meat processing firms in Greece during 1983-2008. Changes in allocative efficiency, scale economies, and, to a lesser extent, technical change and advertising spillovers were the most important drivers of productivity growth during the period analyzed. Copyright 2012, Oxford University Press.