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INVESTIGATING BARGAINING POWER OF FARMERS AND PROCESSORS IN IRAN'S DAIRY MARKET

  • ZEINAB SHOKOOHI (a1), AMIR HOSSEIN CHIZARI (a2) and MAHDI ASGARI (a3)

Abstract

The farm-gate price of raw milk in Iran is determined annually in negotiations among representatives of dairy processors, milk producers, and government officials. This study estimates the average bargaining power of dairy farmers and processors, through applying the generalized axiomatic Nash approach in a bilateral bargaining model. We employ annual data from 1990 to 2013 to estimate econometric representation of a bilateral bargaining model using a Monte Carlo expectation maximization algorithm. Results imply a higher bargaining power of 0.69 for processors, compared with 0.31 for farmers. This asymmetry of bargaining power causes unequal allocation of gains in the milk market.

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Copyright

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Corresponding author

*Corresponding author's e-mail: z_shokoohi@shirazu.ac.ir

References

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Keywords

INVESTIGATING BARGAINING POWER OF FARMERS AND PROCESSORS IN IRAN'S DAIRY MARKET

  • ZEINAB SHOKOOHI (a1), AMIR HOSSEIN CHIZARI (a2) and MAHDI ASGARI (a3)

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