The Impact of Organizational Form on Producer Contracting Decisions

A variable that has not yet been considered in the contracting literature is the impact of agribusiness organizational form on the producer's contracting decision. Contracts with cooperatives are more complicated decisions for producers than a standard marketing contract with noncooperatives because of the requisite membership capital investment in the firm. Contracting with cooperatives requires producers to make a dual supply and investment decision. Individual membership equity holdings in all agricultural cooperatives are increasing, but they are generally most substantial in the value-added, new-generation cooperatives. Portfolio theory is used to analyze the producer's decision to contract with three alternatively structured value-added processing organizations in an uncertain environment: a traditional cooperative, a new-generation cooperative and an investor-oriented firm. In the cooperative cases, the contract requires both supply and equity investment.     

Simulating the Impacts of Contract Supplies in a Spot Market–Contract Market Equilibrium Setting

This article embeds a principal–agent model within a market equilibrium model of contract and cash markets to analyze the impact of contracting on the spot market for hogs. The equilibrium model incorporates both quality differentiation in the contract market and an endogenously determined cash market price. For three types of contracting scenarios, market equilibrium conditions are derived, and results are presented for a numerical example. Contrary to some empirical results, our model shows that the increased supply of hogs under typical formula-price contracts can increase or decrease the cash market price, depending on the relative size of overall contract supplies.     

Contract theory and agricultural policy analysis: a discussion and survey of recent developments*

This paper surveys some recent developments in contract theory and illustrates how this theory might be useful for conceptualising policy issues related to vertical coordination and contracting in the agro‐food industry. The article begins by surveying contract theory to identify key economic distortions that can potentially justify government involvement. Next, the general ingredients of agricultural contracts that are most likely to create inefficiencies are discussed. Finally, controversial aspects of real‐world agricultural contracts are highlighted and lessons from the theory are used to determine whether government intervention is justified. Actual legislation that has been proposed in the USA is analysed where appropriate and topics that await further research are also discussed.     

Contracting Institutions,Agro‐food Trade and Product Quality

The agro‐food sector has experienced a profound transformation of contractual arrangements along the value chain, coinciding with important technological innovations and product quality upgrading. Our understanding of the impact that this transformation has had on trade flows in the agricultural sector is very limited. In particular, we have limited knowledge about the extent to which the patterns in agro‐food trade have been driven by the quality of contractual institutions. Using existing measures which capture the sensitivity of agro‐food products to contractual imperfections, we show that countries with better contract enforcement specialise in the production of food which requires higher level of relationship‐specific investments. We also find that countries with better contracting institutions and producing contract‐intensive goods specialise in exporting high quality foods. In addition, we show that the quality of contracting institutions might importantly affect the process of product quality upgrading.     

What kind of labour regime is contract farming? Contracting and sharecropping in Java compared

This article compares contract farming with share tenancy, another labour regime in which smallholder farmers are bound by contract to deliver produce to another, usually more powerful party. Based on research in the Javanese village of Kaliloro, we explore contracting and sharecropping as labour regimes, each with their own specific mechanisms of surplus transfer from producers to non-producers. The cases compared are sharecropping of irrigated rice, contract farming of watermelon, and contract farming of poultry. There are important differences in how labour inputs are organized, how decisions are made, how costs are divided between landowner/contractor and farmer, and in the mechanisms of surplus transfer between the contracting parties. Exploring these differences allows us to understand and compare the role of the two labour regimes in the penetration of capital into the rural economy. Neither contract farming nor share tenancy are in themselves “win-win” or “win-lose” relationships, good or bad for small-scale cultivators. The actual balance of burdens and benefits—often contravening the provisions of written contracts or state regulation—is determined by power relations between the contracting parties.     

供应链视角下食品安全责任缺失风险的传导机制及规避策略

近年来,食品安全问题的集中爆发,与供应链中食品企业安全责任的缺失不无关联。基于供应链视角,在界定食品供应链与食品安全责任内涵的基础上,分析了食品供应链中食品安全责任缺失风险的传导机制,提出了相应的风险规避策略,期望为食品行业相关部门提供决策参考。     

Market power and rents in global supply chains

Market power and competition policy in food supply chains has emerged as an important economic issue in economics, and a highly sensitive item on the policy agenda. Consolidation is taking place in the food industry, both in high‐income countries and in emerging economies, but the impact of concentration in global food chains on efficiency and rent distribution is more nuanced and complex than often claimed. We review the literature and extend it by developing a model which explicitly takes into account market imperfections and contract enforcement problems in supply chains. Increased competition benefits farms by improving contract conditions, but contract enforcement becomes more complicated.     

Strategies for integrating farmers into modern vegetable supply chains in Vietnam: farmer attitudes and willingness to accept

In Vietnam, the development of so‐called ‘modern’ vegetable supply chains is receiving considerable interest amongst researchers and governments. This interest partly stems from the view that enhancements in food safety can be achieved if farmers are willing to adopt supply chains that are often associated with ‘western’ forms of retailing. Our study investigates farmers’ willingness to change to two ‘modern’ alternatives – a supply model based on cooperatives and another based on investors facilitating the change. Using discrete choice data drawn from 412 farmers, mixed logit models in willingness to pay space are developed that reveal the relative importance of different drivers of change. The paper offers insights that can inform governments about the incentives required to bring about change. In addition, the paper illustrates the novel application of a choice experiment to enumerating the perceived costs of changes in vegetable supply chains.     

Vertical Linkages in Agri-Food Supply Chains: Changing Roles for Producers, Commodity Groups, and Government Policy

Market developments arising from closer vertical linkages in agri-food supply chains have given rise to a variety of issues. This paper outlines key issues and discusses possible responses by producers, their associations, and government. A vision of the future organization of agricultural production serves as a basis for discussion. The continued increase in contracting between producers and processors is accompanied by issues of contract transparency, terms, negotiation, and dispute settlement. Other ramifications include producer access to supply chains and the decline of spot markets. Furthermore, the development of agricultural biotechnology products may force a rethinking of the rationale for public investment in agricultural research and development. Evaluation of market power needs to account for efficiency gains from nonstandard forms of organization to achieve a balanced appraisal of the public interest. Agricultural economists are urged to evaluate new forms of firm and industry structure on the basis of how they work in practice rather than in comparison to an ideal form.     

Feeder-pig Producers and Finishers: Who Should Contract?

The purpose of this study is to determine the minimum level of contract payments required to produce hogs under a production contract. Required payments needed for contract growing to be preferred to independent production for the average-profit, slightly risk-averse, feeder-pig producer and for the high-profit, moderately to strongly risk-averse, feeder-pig producer are found to be similar to those currently offered by contractors. Feeder-pig finishers with average profit levels would either have to be strongly risk-averse or expect economic profits to fall to zero to prefer contracting over independent production. Low-profit feeder-pig finishers who are moderately to strongly risk-averse would prefer contracting. Feeder-pig finishers who historically have experienced above-average profits would require payments substantially above current contract rates to prefer contracting.     

Finding default? Understanding the drivers of default on contracts with farmers’ organizations under the World Food Programme Purchase for progress pilot

During the past two decades, food assistance policy has shifted toward local or regional food purchases and away from purchases from donor countries. Although most local and regional procurement occurs through hard tendering processes open to large‐scale firms and farms, there is growing interest in identifying how and whether to procure from smallholder farmer organizations (FOs). To date, little is known about the drivers of successful contracting with FOs. We utilize data from the United Nations World Food Programme Purchase for Progress pilot in three East African countries to predict defaults on contracts. We examine four possible explanations: country contexts, FO characteristics, prior experience with contracts, and contract modalities and their relationship to local spot market prices. The single most important predictor of default is the increase in market prices between contract approval and delivery. Yet, although increases in market prices are linked to increases in default, this relationship is decreasing in contract size, indicating search costs associated with breaking contracts. Our findings yield both generalizable and context‐specific insights about whether—and when—procuring from smallholder farmers can be successfully integrated into the food assistance toolkit.     

Distress rentals and the land rental market as a safety net: contract choice evidence from Tigray,Ethiopia

Rural households in the semiarid Northern Ethiopian highlands are net buyers of food. Crop failure due to erratic and unpredictable rainfall occurs frequently and leads to food shortages and income shocks. The renting out of land may be one of the coping responses of households exposed to shocks. We developed a theoretical household model for poor landlord households capturing their contract choice response to downside production shocks. We tested econometrically whether contract choice may depend on poverty, capital constraints, production risk and random shocks. The multinomial logit model estimates show that poor households experiencing random shocks are more likely to choose fixed‐rent contracts as a distress response to shocks, suggesting that fixed‐rent contracts may be used to meet immediate needs, but at the expense of future incomes. We also found that fixed‐rent contracts are preferred when ex ante production risk is low, while sharecropping is more likely where production risk is high. Finally, we found an indication that the choice of a fixed‐rent contract as a coping response to shocks comes as a last resort after all other means of coping are exhausted.     

区块链技术在改善食品安全中的应用分析

近年来电子商务的迅猛发展,推动了食品物流行业的快速进步.传统食品行业供应链的全网数据难以获取,存在信息延迟、不对称、信息孤岛等问题,导致物流供应链上下游企业之间多方的协同交互不流畅,食品安全存在隐患.区块链作为一项新兴技术,近年来不断发展,已经逐渐渗入食品领域中,为食品安全及供应链出现的问题提供了思路和解决办法.本文简...     

The Role of Risk and Transaction Costs in Contract Design: Evidence from Farmland Lease Contracts in U.S. Agriculture

The objective of this article is to provide new empirical evidence on landlord-tenant choices of share versus cash-rent contracts in U.S. agriculture. The focus is on the contribution of explanatory variables that represent transaction costs, risk-sharing incentives, or both. An empirical model of contract choice is tested against the 1999 Agricultural Economics and Land Ownership Survey (AELOS) and finds mixed evidence for low transaction cost and risk-sharing-incentive motives for landlord-tenant choices of a share versus cash-rent contract. However, the behavior of landlords and tenants is consistent with them being risk averse. Although it is standard to control for the riskiness of the principal's task that is contracted, we find that other attributes of the landlord are an important part of a relatively complex story for U.S. land tenancy contacting. The latter results have generally been ignored in other published landlord-tenant contracting studies.     

Contracting in the U.S. Pork and Beef Industries: Extent, Motives, and Issues

Contracting has increased significantly in the US livestock-meat sector. Over half of finished hogs and about a third of fed cattle are marketed under some form of contract. Contracting motives vary by type of contract, whether buyer or seller, and by commodity. Several motives for buyers and sellers of finished hogs and fed cattle are identified and discussed. Issues related to contracting per se and the trend toward increased contracting have been raised by contracting opponents, politicians, and economists. Several of these issues are discussed under six headings. Lastly, agricultural economists are encouraged to become actively involved in addressing these issues, especially providing pragmatic education and assistance to those involved in contracting.     

土地承包权调整方式的决策研究——基于Bromley能动的实用主义理论

研究目的:探究土地承包权调整方式的决策及其影响规律,以期为完善农村土地承包权调整政策提供参考。研究方法:实证研究法,熵值法,层次分析法,分层线性模型。研究结果:采取不同土地承包权调整方式的农户和村集体具体表现不同;土地承包权调整方式决策受到农户和村集体两个层面的共同作用,但两个层面对不同土地承包权调整方式决策的影响程度不同;不同土地承包权调整方式决策的影响因素存在差异。研究结论:土地承包权调整方式适应不同的社会环境,要因村而异,尊重村民意愿;要提高公众参与度,充分了解民意,综合考虑村集体和农户两方面的需求,选择适应本村的土地承包权调整方式。     

农户参与食品质量安全追溯体系的行为与效益分析——以北京市蔬菜种植农户为例

本文利用访谈资料和问卷调查数据,重点分析北京市蔬菜种植农户参与食品质量安全追溯体系的路径、行为特征、生产效益和行为选择.研究发现,政府的积极推动和产业化组织的带动在北京市食品质量安全追溯体系发展中发挥了关键作用,但也存在企业动力不足和农户参与难的问题;农户参与食品质量安全追溯体系后生产行为规范有显著改善,交易费用降低,...     

CONTRACT FARMING AND THE BROILER INDUSTRY

The growth of contract production in certain types of farming is noted, and the main implications of this form of business organization for on-farm decision-making and capital acquisition are identified. The purposes of contracting, from both processor firm and farm viewpoints are discussed, and the broiler industry is used to illustrate the development of contracting.     

城市化进程中农村土地制度改革的构想

中国的基本国情是人多地少 ,土地是中国农民的主要生产资料和唯一的社会保障。文章在论述家庭土地承包经营对城市化进程的有利与不利两方面影响的基础上 ,提出稳定家庭土地联产承包制 ,调整承包期、界定土地产权关系、建立农民承包土地使用权流转机制、建立健全农村社会保障体系等农村土地改革和土地制度创新的构想     

农产品供应链的组织模式与食品安全

本文以农产品供应链为研究对象,在对湖北、广东、浙江和山东等地的多种供应链组织模式进行调研的基础上,比较分析了各种组织模式的影响因素及其对食品安全的作用,认为供应链的一体化程度越高其提供产品的质量安全水平越高,进而提出了我国食品安全管理的有益建议.