Abstract The author made a dynamic investigation of the operation process of economy and found that the welfare loss caused by the market power of farmer cooperative in providing agricultural products etc is only a partial phenomenon. The wealth transferred to farmers is mostly converted to the human capital of farmers, and because the rate of investment return of human capital is higher than that of physical capital, the added return of investment might compensate for the welfare loss caused by market power under certain conditions. The market power of farmer cooperative will not harm economic efficiency but might even increase it.
2011, Vol. 28 
