Though market development in Tibetan areas is restricted by unfavorable natural conditions, there have been many cases of farmers and herdsmen participating in market activities. Moreover, examples of their participation can be found from a long time ago. Meanwhile, marketization in inland areas has accelerated the same process in Tibetan-inhabited areas, allowing Tibetan farmers and herdsmen to trade more extensively. However, due to the small size of the local market, all products sold by farmers and herdsmen are at the bottom of the industrial chain and thus, are susceptible to large price fluctuations. With little bargaining power, individual farmers or herdsmen have unstable income streams. In addition, only a limited number of farmers and herdsmen can get hired in the traditional handicraft industry, and few can find jobs in other areas, such as retail or working in restaurants and hotels.
In the service sector, the only local competitors of the small trade companies founded by migrants are companies run by temples. Their comparative advantage lies in the fact that they are a neatly-organized entity, with educated workers (i.e. lamas) and have regular contact with the local consumers. Presently, to enhance the bargaining power of local farmers and herdsmen, the only way is to improve their alignment and promote better cooperation. Even in developed economies, for individual farmers to achieve economies of scale, the best option is to form a cooperative. For one, it allows them to compete with larger companies. Moreover, traditional community-based culture and mutual assistance in Tibetan areas serve as the foundation for sales and credit cooperatives in the modern market economy.
