Assessing aspects of agricultural contracts: An application to German agriculture

Klaus Drescher
Additional contact information
Klaus Drescher: Department of Agricultural Economics, Christian-Albrechts-University Kiel, Olshausenstr. 40-60, 24118 Kiel, Germany, Postal: Department of Agricultural Economics, Christian-Albrechts-University Kiel, Olshausenstr. 40-60, 24118 Kiel, Germany

Agribusiness, 2000, vol. 16, issue 4, 385-398

Abstract: We define contract farming as an agreement between legally independent firms for the production of a commodity for a future market. Analyzing contract farming and the intensity (quality) of contracts is as important as the extent of the contractual arrangements. Current publications do not sufficiently distinguish between contracts, which have a far-reaching and long-term influence on farm-firms and those based on spot-market transactions. A model has been developed to distinguish between different forms and features of agricultural contracts. Agricultural contracts are analyzed on the extent of authority, the duration of the contract, and the extent of investment with regard to the contract. The model provides insights into both the extent and the intensity of contract farming. Results of an empirical analysis of agricultural contracts in Germany clearly show that the majority of the contracts can be characterized as short-term agreements with few binding penalties. Hence, contracts between farmers and up- or downstream industries rarely influence the organizational structure and business development of German farms [JEL codes: Q130]. © 2000 John Wiley & Sons, Inc.

Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:wly:agribz:v:16:y:2000:i:4:p:385-398

DOI: 10.1002/1520-6297(200023)16:4<385::AID-AGR1>3.0.CO;2-P

Access Statistics for this article

Agribusiness is currently edited by Ronald W. Cotterill

More articles in Agribusiness from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().