Abstract: During the last twenty years there has been a proliferation of production cooperatives in the agricultural sector of low income countries. This paper examines the prospects for this type of firm in light of their poor historical record. A theoretical model is presented that shows the extraction of scarcity rents is a necessary condition for survival. Several case studies examined are found to be empirically consistent with the model. It is shown that policies can be devised for the extraction of rents.

　　Subjects: PRODUCER cooperatives; AGRICULTURAL productivity; RENT; DEVELOPING countries