Allocation of Authority in Agricultural Production Contracts
Metin Cakir (),
Joseph Balagtas () and
Steven Y. Wu
No 49577, 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin from Agricultural and Applied Economics Association
The objective of this paper is to develop a model that explains the involvement of first level handlers in farm level decisions. In particular, the research attempts to explain observed differences among levels of farmer's autonomy in production contracts of different agricultural commodities. We show that the trade off that a contractor faces for holding the decision rights for controlling production inputs varies for different production environments. In particular, the contractor prefers controlling inputs in production of commodities that have relatively uniform production environments, whereas it is more efficient to delegate the control to the producer for commodities that have diverse production environments.
Keywords: Agribusiness (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea09:49577
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