The history of American farmer movements has numerous examples of efforts 

 to control the market through cooperatives. Many farmers have believed 

 that such control would allow freedom in setting price* However, in 

 agriculture there are few products with no substitutes to which consumers 

 can move when price changes are unfavorable. 



Even though the typical single firm monopoly 'control of price is not 

 feasible for most agricultural products, some semblance of monopoly might 

 be beneficial in terms of helping to raise prices. For instance, the 

 gro\N/ers of canning peas in a given area might feel that through the forma- 

 tion of a tight bargaining association, their industry bj cooperating 

 with other industries that produce relatively close substitutes would be ; 

 in a position of gaining some monopoly advantage by control of supply and 

 bargaining as a unit. If they can take additional steps and organize 

 the tomato growers, snap bean growers, and all other farmers in the 

 market area who produce similar crops which might be considered substi- 

 tutes, then the group has placed itself in a much better bargaining 

 position and aay.be able to exert more influence over price* 



When farmers group together in bargaining associations and negotiate prices 

 as a unit they reduce competitive selling among themselves and tend to 

 function as a single seller. The association serves to protect the indi- 

 vidual producer against the condition of few buyers and many unorganised 

 sellers- on the other hand. 



The price-making power of such an organization is more limited than is 

 commonly believed. For example, a local vegetable bargaining association 

 cannot obtain prices substantially higher than those obtained in other 

 States or regions. Canners are in such keen competition with other re- 

 gions as to be forced out of business in a given section if prices are 

 substantially above those with which they must directly compete. 



Many associations come into existence because of prevailing practices 

 toward one-buyer monoply in the market. The bargaining association can 

 be looked upon then as a means of combating these practices through use 

 of countervailing power. 



Influencing Prices Through Bargaining 



What then is the main theory involved and what are the possibilities 

 and limitations of influencing prices through bargaining? The theory 

 of collective bargaining for agricultural commodity prices holds that 

 on a given market with a given volume the price may be established some- 

 where between the top and bottom of the bargaining range, depending 

 upon the bargaining strength of buyers and sellers. 



Buyers attempt to buy at as low a price as possible and sellers attempt 

 to sell at as high a price as possible. This necessitates a certain amount 

 of bickering or haggling until for any one product in any particular market 

 a price is established at x^hich transactions take place. 



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