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Cooperative Organizations as an Engine of Equitable Rural Economic Development

Morris Altman ()

No 1, Newcastle Business School Discussion Paper Series: Research on the Frontiers of Knowledge from The University of Newcastle, Australia

Abstract: Cooperatives represent an alternative to large-scale corporate farms and plantations as well as to independent unaffiliated small private farms. This paper presents a comparative modeling narrative on cooperative organizational forms’ potential impact on equitable rural development. This speaks to issues of both increasing the size of the economic pie and how this income is distributed. The case is made the cooperatives can potentially generate higher rates of growth and more equitable growth, even in competitive economic environments. An important type of cooperative that is focused upon in this paper is one based on the linking of smaller farms into a cooperative. Economies of scale and scope can be captured by the cooperatives and transaction costs can be reduced. Given cooperative governance, one would also expect higher levels of x-efficiency. Overall, cooperatives can generate relatively high incomes to cooperative members, whilst remaining competitive with the traditional privately owned large farms. Critical to the success of the cooperative, is a set rules and regulations that place them on a level playing field with the privately owned farm. In addition, the implementation and practice of cooperative principles is key to the success of the cooperative farm and rural cooperatives, more generally speaking.

Keywords: Cooperation; Cooperatives; Economics of scale and scope; Fairness; Transaction costs; Cooperative principles; X­efficiency; Dynamic efficiency; Income equality (search for similar items in EconPapers)
JEL-codes: D02 D03 D10 D23 D33 D4 D6 D72 D74 D8 G2 I3 J00 J30 J54 J8 K2 L1 L2 L5 M5 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-03-05
New Economics Papers: this item is included in nep-agr and nep-hme
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Working Paper: Cooperative organizations as an engine of equitable rural economic development (2014) Downloads
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