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Monopsonistic exploitation in contract farming: articulating a strategy for grower cooperation
Author(s) -
Sivramkrishna Sashi,
Jyotishi Amalendu
Publication year - 2008
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1411
Subject(s) - monopsony , dynamism , contract farming , agriculture , meaning (existential) , economics , business , microeconomics , industrial organization , psychology , ecology , physics , quantum mechanics , production (economics) , psychotherapist , biology
Contract farming has been considered a new hope to instil dynamism in third world agriculture. However, there remains serious concern whether small peasants will be able to benefit from this system since buyers may often be a single large or at most, few large corporations, a typical case of monopsony. In this paper we question the basis of the fears that are often raised in the literature. A clear analytical approach to understanding the (economic) meaning of monopsony helps us articulate a strategy for grower cooperation that could effectively deal with monopsony power in contract farming systems. Copyright © 2007 John Wiley & Sons, Ltd.