The Determination of Contracts in Agricultural Economies (original) (raw)
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The Determination of Contracts in Agricultural Economies Abstract
2000
This paper aims to analyze how contracts are determined and modified given diverse agricultural settings and to examine the implications of these changes with respect to their efficiency, distribution and sustainability. The contract model presented here differs from previous contract models as the enforcement issues regarding contracts across various agro-climatic and output conditions are considered. Emphasis is placed on the
Contractual Arrangements in Agriculture (Northern and Central Luzon Component)
2007
This study aimed to characterize and analyze the various contractual arrangements in selected agricultural commodities in parts of Central and Northern Luzon. Specifically, the objectives are to: i) characterize the nature, process and degree of various agricultural contracts involved in the production and marketing of mangoes, hogs, rice and selected vegetables and, ii) analyze the implications of the various contracting arrangements in these commodities in terms of efficiency and equity. The research sites for this study consist of major producing provinces of the four specified commodities in selected parts of Northern and Central Luzon regions. For mango, Calasiao and San Carlos in Pangasinan, Iba and Masinloc in Zambales and Munoz in Nueva Ecija served as the study areas. For lowland vegetables, the municipalities of Talavera, Aliaga and San Jose City in Nueva Ecija, were primarily selected as study sites being major producers of eggplant, tomato, okra, onions and other vegetables. For hogs, Talavera, Munoz and San Jose City in Nueva Ecija where integrators and key informants are located constitute the sites of the study. The nature, process and degree of the different contracting systems in the four selected agricultural commodities have been diverse. In most cases, however, the different contracts were outcomes of the farmers' need to adjust to the different production and market conditions surrounding the agricultural sector. The pervasiveness of sharecropping in many agricultural crops such as mango, rice and vegetables underscore the farmers' difficulty in raising capital, due to missing credit and insurance markets. The associated risks, seasonality and specialized nature of agricultural production have likewise complicated the production processes and patterns of contracts in these commodities. Access to credit and marketing institutions and functioning of insurance markets are essential for the transformation of subsistence-oriented asset-poor farmers.
Contracts, Transaction Costs and Agricultural Production in the Pampas
2006
This paper presents an analysis of agricultural contracts using a transaction costs approach. We contend that in a context of modern agriculture, with well defined property rights, agricultural contracts must balance costs and benefits, aligning tenant and landlord incentives towards a similar objective. The study debates the potential effects of tenancy status and duration of contracts, over soil conservation and input use. We present empirical evidence about the effects over the soil and input use in tenant (fixed rent or sharecropping) and owner-operator farms using farm level data from the 2002 National Agricultural Census of Argentina. The empirical results show some differential effects but do not support a general and clear negative effect for tenancy arrangements. Our intuition is that the interaction among specific characteristics of farmers (education, experience, assets, etc.), the natural resources endowment (soil fertility) and the economic and institutional environment...
2008
In the wake up ubiquitous agrarian crisis reflected in decelerating growth and increasing farmer suicides this paper examines the institutional constraints faced by agricultural sector. This paper interprets institutions in the very general sense of rules of structure in agricultural production and market interaction. Considering contract farming as a new institutional arrangement evolved in Indian agriculture to minimize risk and maximize profit, the paper assesses its strength in addressing the above problems. The basic question examined is how can contract farming help farmers especially smaller ones in the presence of imperfection of agrarian market (input, output, credit, etc)? Insights from theoretical literature and evidence from empirical studies show that contract farming would be able to address (at least partially) the market imperfections and have significant positive impact on farm households' income and employment. Nonetheless the impact of contract farming is specific to regions, crops and farmer. Due to prevalence of weak legal system and weak bargaining power of farmers the contracts are generally biased against farmers.
An analysis of contract farming in East Java, Bali, and Lombok, Indonesia
Agricultural Economics, 2005
This paper examines the emergence and benefits of contract farming in East Java, Bali and Lombok, Indonesia. After a general review of contract farming in these regions, three contracts, for seed corn in East Java, seed rice in Bali and broilers in Lombok are described and analysed
2019
Contract farming, broadly understood as agricultural production carried out under a previous agreement between producers and their buyers, is increasingly preferred to other forms of exchange due to its positive economic but also social implications. Often lacking a dedicated regulatory framework at the domestic level, contract farming has recently attracted the attention of international organizations such as the International Institute for the Unification of Private Law (UNIDROIT) and the Food and Agriculture Organization (FAO) of the United Nations which, together with the International Fund for Agricultural Development (IFAD), have prepared a legal Guide intended to provide soft guidance for the creation of a more efficient and fairer environment for this kind of economic activity. After summarizing the history and the intended purpose of the project, this paper offers a general overview of the Guide, its substantive content and steps taken so far in view of its actual implementation.
This study aimed at exploring the role of farmers' tenure in securing a loan, specifically the 'hiraman' agreement among farmers. A sample of 50 respondents was randomly selected and the data were collected mainly through a questionnaire. A descriptive research design was used to analyse and interpret the data collected. The findings revealed that hiraman agreements among farmers are common in a certain area of the Philippines. Most of the borrowers who joined this agreement are farmers who have a tenure as tenants, followed by the farmers who are registered owners/partly owners. It also revealed that there were no farmworkers/laborers that have been entered into this agreement as their role is primarily for the cultivation only, such as planting, growing, harvesting, etc. Furthermore, the study showed the unique characteristics of the agreement and the major reasons for the farmer availing of and securing this loan. However, farmers still encountered constraints during the agreement such as uncertainties in the legal rights of the borrower, and the unavailability of payment instalments. Hence, conducting sustainability training and seminars for resource efficiency, intensification of the subsidy programs, and increasing the presence of formal institutions in the areato help increase the farmers' income is highly recommended.
FRAMEWORK FOR ANALISIS OF AGRARIAN CONTRACTS
2010
This paper incorporates the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law, Sociology, Behavioral and Political Sciences) and suggests a holistic framework for analysis of agrarian contracts. First, it specifies type and importance of different mechanisms of governance of agrarian activity. Second, it defines the essence, and classifies types and features of agrarian contracts. Next, it identifies
An Evaluation of Constraints of Contract farming system: A Case Study of Orissa
ejournal.narotama.ac.id
In the recent phase of economic development, in one side the policy makers like, Central Government, State Government, Reserve Bank of India, Food and Agricultural Organization (FAO), and in other side Academician like Pranab Bardhan, Sukhpal Singh, Asok Gulati, Abhijeet Banerjee, etc, are visualizing contract farming as an alternative policy intervention for economic development through agricultural development. The critics like Jayati Ghosh, Devinder Sharma, etc. are emphasizing that contract Farming is not suitable solution for Indian Agriculture. If one sees the Private sectors like Satyam, ITC Limited, Agro-industry, Rallis etc are doing different types of contract farming with farmers in agriculture in less developed countries like India.