Valuation of Transferable Delivery Rights for Marketing Cooperatives
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Delivery rights to a cooperative's marketing pool can take on a value independent
of the members' equity share under certain conditions. Based on anecdotal information,
transferable delivery rights become valuable when the pool is fixed in size
(closed), members are protected from exploitation of quasi economic rents, and
have an assured "home" for their production. The greater the potential buyers'
aversion to risk, the higher the value of the delivery right. The right has additional
value if the cooperative generates a premium per unit return due to product
differentiation and market power. Cooperatives competing with investor-owned
firms in less than purely competitive markets must be able to pay equal net returns
to members if they are to survive.