Collective bargaining

The share of resources distributed in the stimulus package to the farmers and labourers is very less as compared to other stakeholders of the economy. As public policy is influenced by bargaining power through intense lobbying, low distribution of resources towards farmers and labourers could be due to their low bargaining power. Collective action is required to bargain or lobby for resources. The farmers are adversely placed with regard to collective action because the transaction cost of organising collective action is higher but their ability to bear the cost is lower. The industry is placed in a much better position on both these counts. The inability of farmers to provide critical minimum resources for collective action may further weaken their bargaining position.