Co-operatives in chains: institutional restructuring in the Dutch fruit and vegetables industry

Co-operatives play a major role in the agricultural and food industry. Co-operatives, by the very nature, are producer-oriented firms. As market conditions for food products have changed in recent decades, the question is raised whether co-operatives are still efficient organisations for carrying transaction with agrifood products? Bijman (2002) has addressed this question for the fresh produce industry in The Netherlands. Traditionally, fruits and vegetables were sold through auctions, organised by grower-owned co-operatives. In the 1990s several auction co-operatives merged, transformed into marketing co-operatives, and vertically integrated into wholesale. In addition, growers have set up many new bargaining associations and marketing co-operatives. These new co-operatives have started crop and variety specific marketing programmes. For reasons of asymmetric information and investment-related transaction costs several of the new co-operative firms have also included the wholesale function.