Why, When and How Do Firms Contract?

Sudha Narayanan ()
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Sudha Narayanan: International Food Policy Research Institute

Chapter Chapter 6 in Contract Farming in Developing Countries, 2025, pp 79-99 from Palgrave Macmillan

Abstract: Abstract The first stage of the contracting process involves a firm weighing its options to decide its procurement strategies, before it chooses its procurement shed and farmers to recruit. In the context of globalized agribusinesses, these could involve decisions on plural ways of sourcing produce, which regions of the world to operate in. In the context of local businesses there can be a choice of which villages or clusters of community to select. These decisions often precede the selection of farmers themselves. This chapter proposes that these be viewed as a portfolio allocation problem where firms carefully balance the risks and costs of different options, at varying scales—at the level of regions, communities and farmers.

Keywords: Contract farming; Polyarchies; Plural governance; Spatial selection; Geography; Portfolio allocation; Social performance; Inclusivity; Autosourcing; Make or buy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psachp:978-3-031-76487-5_6

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DOI: 10.1007/978-3-031-76487-5_6

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