The cost of joining forces: collective organisations and the economic performance of dairy farms in South West England

Nota, Paolo, Curzi, Daniele and Vigani, Mauro ORCID: https://orcid.org/0000-0003-2442-7976 (2026) The cost of joining forces: collective organisations and the economic performance of dairy farms in South West England. Bio-based and Applied Economics, 15 (2). pp. 89-94. doi:10.36253/bae-17342

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Abstract

This note highlights the importance of sale agreements for the economic performance of dairy farms in South West England. The reduction in public intervention in milk supply governance led to market coordination through supply chain agreements (SCAs), resulting in unbalanced power dynamics that reduced farmers’ bargaining power and made them vulnerable to unfair practices. Collective organisations are seen as a solution to protect farmers. Using Coarsened Exact Matching, the paper estimates the effect of collective organisation participation on selling prices, production costs, and markup in a sample of 200 farms in Somerset and Devon. The results show that collective organisations are associated with 7.3% higher production costs and 23 percentage points lower markup, mainly due to costs associated with milk collection, transport, storage, marketing, and adherence to strict quality standards. However, these costs are counterbalanced by secured market access, stronger negotiating power, and better alignment with market demand. These findings underscore the need to further investigate collective governance in developed agricultural markets.

Item Type:	Article
Article Type:	Article
Uncontrolled Keywords:	Dairy farming; Collective organisations; Markup; Coarsened exact matching
Subjects:	S Agriculture > S Agriculture (General) > S560 Farm Economics S Agriculture > SF Animal culture > SF 191 Cattle
Divisions:	Schools and Research Institutes > Countryside and Community Research Institute
Depositing User:	Rhiannon Goodland
Date Deposited:	13 Oct 2026 16:01
Last Modified:	13 Oct 2026 16:15
URI:	https://eprints.glos.ac.uk/id/eprint/16591

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