the dominant firms. This follows from the fact that while, 

 in their relationship to each other, a few dominant firms 

 must recognise the most efficient of their number as their 

 leader, the dominant firms — - regardless of efficiency — 

 assume a position of leadership relative to the remainder 

 of the industry by virtue of their si:..e alone o" jj 



Even though a processing firm may not be large enough to occupy a dominant 

 position as far as the national market is concerned, ever a small firm may 

 be dominant relative to the local markets The element of location cer- 

 tainly affords any firm some protection from, the .competition of other 

 buyers by the additional cost to the farmers of transporting the supply 

 of the farm, oroduct in his local area to the markets of his competitors. 



If, in a given market, both the number of. processors and producers are 

 few, with neither group having anjr particular monopoly, advantage, price 

 determination becomes largely a bargaining process. The buyers will 

 attempt to obtain the products at the lox/est price consistent with the 

 supply they desire; the sellers will attempt to obtain the price which 

 will give them the most profits. The price will be indeterminate and 

 the actual market price will deoend to an important degree upon which 

 of' the bargaining parties has the better alternative sources or outlets 

 for its particular product or use of its resources o 



If the number of sellers in the market becomes more numerous and the 

 number of buyers becomes fewer, the buyers are then able to exert more 

 control over price to the disadvantage of the sellers. 



Under market conditions of buyer advantage, as may be the case in the 

 vegetable processing industry, the individual farmer, generally having 

 small quantities of product to sell is. in a weak bargaining position 

 arid consequently is not able to exert much influence in determining 

 the price of his product. 



"Individually the farmer is a notoriously weak bargainer 

 because (l) he may not know in what grade his product 

 falls; (2) he may not know the relative value of the dif- 

 ferent grades; (3) he may not know what his local price 

 should be even when central market prices are known, and 

 frequently he cannot even interpret wholesale market 

 quotations; (/J he cannot follow market conditions closely 

 enough to know at any given time whether market tendencies 

 are up or doxvn; (5) he finds it difficult to judge a pro- 

 position put in a new way; and (6) his own supply is so 

 small a part of the buyer's needs as scarcely to be missed 

 if he refuses to sell." U 



3/ idcholls, Wm. H. Imper fect Competition Within Ag ricultural Industries . 

 Iowa State College Press. 194-1. p>14-3» 



^/ Erdman, H. E. Possibilities and Limi tations of Cooperative Marketing . 

 Calif. Agri. Exp. Sta. Circ. 298, 19 pp. 1942, p. 11* 



-.3 - 



