ABSTRACT
This chapter aims to investigate whether the pricing policy of consumer cooperatives mitigates the degree of asymmetric price transmission in agricultural products markets. It examines how consumer cooperatives could protect the consumers’ welfare from the imperfect market competition. The chapter analyzes the vertical price transmission between producer and consumer prices for several goods in iCOOP and the asymmetries with those in agricultural products market for the same products, respectively. Consumer cooperatives in Korea have been serving their members mainly with eco-friendly and organic agricultural products, and have been trying to provide those at a stable year-round price based on contract farming. Farmers and consumers are disadvantaged by the asymmetries in price transmission due to the exploitation of market power by processing industries or retail organizations. The increases in producer prices which shrank the distribution margin are transmitted more rapidly or completely than the equivalent movements that stretch the margin in the market.
