bargaining in agriculture in order to increase farm
prices and to make them more stable, and to provide
for market reorganization in order to better
accommodate coordination between farming and
other sectors of agriculture.
Farmers have historically employed the
cooperative form of business organization as a vehicle
for joint action to meet various felt needs and
objectives. Cooperatives have long been used by
producers for the performance of various marketing
activities in both buying and selling through
traditional marketing channels. Most of these
organizations were designed to accomplish
efficiencies in performing such marketing functions as
assembly, storage, processing, etc., and in some cases
bargained with independent outlets for prices and/or
other terms of trade. Examples of such organizations
are cooperative creameries, cooperative grain
elevators, and cooperative feed and supply stores.
Specialized group bargaining associations for farmers
have more recently appeared in such forms as fruit
and vegetable bargaining associations and, even more
recently the National Farmers Organization (NFO)
and the American Agricultural Marketing Association
(AAMA) which is an affiliate of the Farm Bureau.
These associations normally do not physically handle
products but confine their efforts to such services as
collecting market information, assisting in contract
analysis, and contract negotiations.
As farmers have come to recognize the futility of
individual action, they have turned to group
bargaining associations (such as NFO and AAMA)
and/or their cooperative commodity organization in
an attempt to obtain greater protection and
representation in arriving at prices and other terms of
trade attendant to their involvement in the
coordination of agriculture. Their goal was to assure
themselves access to the market at more favorable
prices and terms of trade. The accomplishment of this
objective necessarily involves a consideration of the
relative power positions of the parties involved in the
trade. In the absence of a degree of power the present
and future welfare of a party is absolutely contingent
on the decisions of others and can be expected to
tend toward a position of subservience. It is from this
conviction that farmers’ desires for bargaining power
arises. And, perhaps, it is from this vantage point that
the “bargaining power issue” should be viewed.
Effectiveness in the development and use of
bargaining power is closely related to the ability to
co-ordinate activities, and to mitigate conflicting
points of view among parties within the bargaining
group. As was previously mentioned, farmers have
historically employed the cooperative form of
business organization as a vehicle for joint action to
meet various felt needs and objectives. Similarly, the
major thrust of farmers’ efforts to develop bargaining
power has been through their cooperative
organizations. Perhaps the obvious point should be
made that the mere formation of farmer cooperatives
does not within itself assure the creation of
bargaining power for its membership. However,
farmer-owned cooperatives have and do provide the
most feasible way to increase producer bargaining
power; and to be most effective in this role they must
be strong and in most cases large [16].
EFFECTIVE BARGAINING -
PREREQUISITES AND DIFFICULTIES
Frequent reference is made to the economic and
social requirements for attaining producer bargaining
power.2 While a variety of listings could be given, the
central element involved is the ability to control some
factor, or factors, that can in∩uence the terms of an
agreement. This is simply a restatement of the basic
relationship of power to effectiveness in bargaining.
In general, the requirements that must be met by
farmers if they are to develop maximum bargaining
strength are:
1. Control supplies of the product.
2. Attain and maintain unity among members.
3. Gain recognition from opponents.
4. Perseverence.
These prerequisites are both complex and highly
interrelated.
Emphasis also has been repeatedly given to the
proposition that the characteristics of farming and
the peculiarities of farmers make the establishment
and maintenance of producer bargaining power
extremely difficult. These anticipated problems and
limitations can be summarized as follows:
1. Geographic and seasonal dispersion of
production of agricultural products which
frustrate efforts to control production.
2. Legal and institutional problems which limit
the organization in its efforts to build a
power base.
3. Physical and demand characteristics of
agricultural products which complicate the
effort or end result of product control.
4. Propensity of farmers for managerial
independence which leads to a lack of unity
in the bargaining effort.
5. Difficulties in securing and maintaining
producer participation in the absence of
2
See [2] and [9] for a particularly cogent discussion of the subject.
39