Legal and economic challenges before agricultural integration: from cooperatives to associations
Minko Georgiev
, Teodora Stoeva
, Violeta Dirimanova
Abstract: The purpose of this publication is to explain current economic and legal problems which face existing agricultural associations in Bulgaria. The study presented relies on a mix of theories related to legal and economic aspects, thus analyzing: 1) the historical path of development of organizational forms of Bulgaria’s agriculture; 2) circumstances creating the conditions for integration; 3) integration in the various organizational forms as well as upcoming controversial effects on the lateral and vertical organizations; 4) agricultural contractual agreements, as a specific form of integration of the organizations defining the role of modern agricultural associations and their influence on resource allocation; and 5) comparison of the coordination structure of the agricultural associations with other agricultural organizations, including the manner and number of their transactions. The framework of the associations as a form of organization creates additional incentives for economies of scale and opportunities for indirect transfer of transaction costs on one hand but could be a burden on other subjects. Legal solutions to improve the legal framework are presented.
Keywords: Agriculture Cooperations; Associations; Hybrid Organizations
Citation: Georgiev, M., Stoeva, T. & Dirimanova, V. (2025). Legal and economic challenges before agricultural integration: from cooperatives to associations. Bulg. J. Agric. Sci., 31(3), 455–463.
| References: (click to open/close) | Arida, A., Masbar, R., Majid, M. S. A. & Indra, I. (2023). Does vertical asymmetric price transmission exist in the rice markets? Agricultural and Resource Economics: International Scientific E-Journal, 9(1), 69-90. https://doi.org/10.51599/are.2023.09.01.04
Ayres, I. & Gertner, R. (1989). Filling gaps in incomplete contracts: an economic theory of default rules. Yale Law Journal, 99, 87-130.
Bachev, H., Ivanov, B. & Sarov, A. (2020). Unpacking governance sustainability of Bulgarian agriculture, Economic Studies, 29(6), 106-137.
Bachev, H., Ivanov, B. & Sarov, A. (2021). Assessing governance aspect of agrarian sustainability in Bulgaria. Bulg. J. Agric. Sci., 27(3), 429–440.
Bilenko, Y. (2022). Labor productivity in the agriculture, structural shifts and economic growth in the Central and Eastern European countries. Agricultural and Resource Economics: International Scientific E-Journal, 8(4), 5-32. https://doi.org/10.51599/are.2022.08.04.01
Candemir, Ah. & Duvaleix S. (2021). Agricultural cooperatives and farm sustainability – a literature review. Journal of Economic Surveys, 35(4), 1118–1144. doi: 10.1111/joes.12417
Coase, R. (1960). The problem of social cost. Journal of Law and Economics,56(4), 837-877.
Coase, R. (1992). The institutional structure of production. American Economic Review, 82, 713-719.
Constitutional Court of the Republic of Bulgaria (1996). Decisions: № 10 of 4 July 1996. (CCD, 1996); Decisions № 10 of 25.02.1997 (CCD, 1997a); Decision № 10 of 6 October 1997 (CCD, 1997b); Decisions № 7 of 10.04.2001 (CCD, 2021).
Demsetz, H. (1967). Toward a theory of property rights. American Economic Review: Papers and Proceedings 57, 347-359.
Demsetz, H. (1983). The structure of ownership and the theory of the firm. Journal of Law & Economics, 26(2), 375-390.
Diamond, P.A. & Maskin, E. (1979). An equilibrium analysis of search and breach of contract, I: steady states. Bell Journal of Economics 10(1), 282-316.
Doitchinova, J., Kanchev, I. & Miteva, A. (2005) Development of agrarian structures in Bulgaria: from productive cooperatives to sole traders and partnerships. Paper prepared for presentation at the 94 EAAE Seminar ‘From Households to Firms with Independent Legal Status: The Spectrum of Institutional Units in the Development of European Agriculture’, Ashford, (UK), 9-10 April 2005.
Draganova, M. (2002). Collisions in the transformations of rural life. Lik Publishing House, ISBN: 954-607-585- X (Bg).
Food and Agriculture Organization (FAO, 2003). Trade reforms and food security: conceptualizing the linkages. Commodity policy and projections service commodity and trade division. Roma, 2003, 315.
Gilson, R. J. (1984). Value creation by business lawyers: legal skills and asset pricing. Yale Law Journal, 94(2), 239-313.
Gordon, H. S. (1954). The economic theory of a common-property resource: the fishery. The Journal of Political Economy 62(2), 124 – 142.
Hart, O. D. & Holmstrom, B. (1987). The theory of contracts, in advances in economic theory, T. R. Bewley, (ed.). Fifth World Congress, Cambridge, Cambridge University Press, 369-98.
Hovenkamp, H. (2010). Harvard, Chicago and transaction cost economics in antitrust analysis (November 10, 2010). Antitrust Bulletin, 55, 613, 2010, U. Iowa Legal Studies Research Paper No. 10-35. Available at SSRN: https://ssrn.com/abstract=1592476
Koteva, N., Mihailova, M. & Yovchevska, P. (2022). Business model for cooperation between agricultural holdings and scientific institutes – methodological aspects. Bulg. J. Agric. Sci., 28(3), 376–386.
Ma, W., Marini, M. A. & Rahut, D. B. (2023). Farmers’ organizations and sustainable development: an introduction. Annals of Public and Cooperative Economics, 94(3), 683-700. https://doi.org/10.1111/apce.12449
Masten, S. (1998). Contractual choice. University of Michigan Law School, Working Paper No. 99-003. Available at: SSRN: https://ssrn.com/abstract=142933
Meese, A. J. (1997). Price theory and vertical restraints: a misunderstood relation, UCLA Law Review, 45, 143-204.
Ménard, C. (2004). The economics of hybrid organizations. Journal of Institutional and Theoretical Economics, 160(3), 345 – 376.
Mihailova, M. & Yovchevska, P. (2023). Land relations in Bulgaria through the lens of agricultural clustering in 2003 and 2020. Bulg. J. Agric. Sci., 29 (Supplement 1), 29–38.
Ministry of Agricultural and Food (2021). (MAF, 2021) Page: Сensus in agriculture: https://www.mzh.government.bg/media/filer_public/2021/12/07/ad_2021.pdf (Bg).
Norrer, R. (2019). Agriculture and Competition, 82, Ed. CEDRр Nomos Verlagsgesellschaft mbH & Co. KG, ISBN: 978-3-8487-5831-9.
Ortmann, G. F. & King, R. P. (2007). Agricultural cooperatives I: history, theory and problems. Agricultural Economics Association of South Africa (AEASA), Agrekon, 46(1), 1-29.
Penchev, P. (2019). From periphery to semi-periphery. Naum Dolinski (1890-1968) in the history of Bulgarian economic thought ". Yearbook of the University of Economics - Varna 1, 231-274. https://tinyurl.com/dscwexct
Penov, I. (2023). The role of small-scale farming for local economic development and family incomes: the case of land-source of income program, Plovdiv, Bulgaria. Bulg. J. Agric. Sci., 29(Supplement 1), 3–12.
Posner, R. (1979). The Chicago school of antitrust analysis. 127 U. PA. L. rev. 925, 1979.
Rutten, L. (2003). Farmers and farmers’ associations in developing countries and their use of modern financial instruments, Finance 0301001, University Library of Munich, Germany.
Sarov, A. (2021). Governance transformation of the Bulgarian cooperative movement: values, principles, practices and members’ satisfaction. Bulg. J. Agric. Sci., 27(1), 65-71.
Shapiro, C. (2018). Antitrust in a time of populism. International Journal of Industrial Organization, 61, 714-778.
Shavell, S. (2006). On the writing and interpretation of contracts. Journal of Law, Economics, & Organization, 22(2), 289-314.
Suchon, A. (2019). Legal aspects of the organizations and operation of agricultural co-operatives in Poland. Adam Misckieviwsz University in Poznan, Law Book No 6.
Swain, N. (1998). A framework for comparing social change in post socialist countryside. Eastern European Countryside, Depth. Sociology Nicolas Copernicus University, Torun, 4, 8-15.
Swain, N. (2001). Central European agricultural structures in transition. In: Kaleta, A., Swain, N., Weber, B., Zabloski, G. (eds.) Revitalizations of the Rural Areas in Europe, vol. 4, Rural and Agricultural Transformation in Central Europe, Nikolas Copernicus University, Torun.
Taganui (1991). The future of the Hungarian co-operatives in East – West, comparative relation. Paper presenting at the Annual Meeting Hungarian society for Sociology, 24-28 June 1991, Budapest.
Vu, H. V., Ho, H. & Hoi, L. Q. (2020). Impact of farmers' associations on household income: Evidence from tea farms in Vietnam. Economies, 8(4), 1-16. https://doi.org/10.3390/economies8040092.
Williamson, O. (1991). Comparative economic organization: the analysis of discrete structural alternatives. Administrative Science Quarterly, 36(2), 269-296. doi:10.2307/2393356.
Williamson, O. (2002). The theory of the firm as governance structure: from choice to contract. Journal of Economic Perspectives 16(3), 171-195. DOI: 10.1257/089533002760278776. |
|
| Date published: 2025-06-24
Download full text 
