Market power, markup volatility and the role of cooperatives in the food value chain: evidence from Italy.

This article examines the extent to which agricultural cooperatives in Italy’s fruits and vegetables (F&V) and dairy sectors achieve countervailing market power and income stability by estimating firm-level markups and markup volatility from 2007 to 2014. Using a production-side empirical approach, the study finds that F&V processor cooperatives exhibit higher markups than non-cooperatives, suggesting successful product differentiation, while F&V farmer cooperatives and dairy processor cooperatives tend to have lower markups, indicating possible coordination challenges. Dairy cooperatives generally do not demonstrate market power, and markup volatility differences between cooperatives and non-cooperatives are minimal except for higher volatility among F&V processor cooperatives, which may reflect income-smoothing efforts. The findings highlight sector- and stage-specific variations in cooperative performance and suggest that cooperatives’ economic behavior can be meaningfully analyzed through firm-level markup estimation to inform policy on their role in food supply chains.