Contracting and Farmers’ Perception of Unfair Trading Practices in the EU Dairy Sector

Federica Di Marcantonio, Pavel Ciaian and Jan Fałkowski

Journal of Agricultural Economics, 2020, vol. 71, issue 3, 877-903

Abstract: It is commonly asserted that unfair trading practices (UTPs) emerge largely as a result of contract incompleteness. In line with this view it is claimed that making contracts more complete will represent an antidote to UTPs. In this paper we argue that this does not need to be the case. This is because contracts, except for their potential to increase the surplus generated in the transaction, determine how this surplus will be divided. This, in turn, makes it possible for both trading partners to use contractual terms to turn the distributional conflict to their advantage. In the presence of unequal distribution of bargaining power this may lead to a situation in which the stronger party may succeed in tilting the contract in its favour by including UTPs in the contract content. Drawing insights from data collected in 2017 through a field survey among dairy farmers in France, Germany, Poland and Spain, we find support for this argument. Our estimation results show that contract completeness increases the likelihood of farmers reporting that their contracts with processors include the practices that may be considered as UTPs. Further, and also in line with this argument, contract completeness does not seem to affect UTPs during the contract execution or its termination.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.1111/1477-9552.12388

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jageco:v:71:y:2020:i:3:p:877-903

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0021-857X

Access Statistics for this article

Journal of Agricultural Economics is currently edited by David Harvey

More articles in Journal of Agricultural Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().