Reversing the road to super farms

William Hartley Furtan, Kostas Karantininis and Mogens Lund

No 10025, 102nd Seminar, May 17-18, 2007, Moscow, Russia from European Association of Agricultural Economists

Abstract: The organization of primary agriculture is dependent upon whether the institutions of a country allow for reverse franchising by farmers. If the transaction costs of managing a farm can be minimized by farmers conducting a form of collective action, such as cooperatives, then the size of farms will be smaller. If farms have to make the products in the firm, which are subject to very large economies of scale than super farms will be the result. The key is the existence of institutions, such as collective action and property rights, that allow for the minimization of costs. For this reason the organization of primary agriculture is, among other things, a public policy issue. In this paper we develop this argument, we sketch a theoretical framework based on a model of adaptive relational contracts, and we present two illustrative examples: the Danish cooperative system, and the Canadian Wheat Board.

Keywords: Agribusiness; Farm Management (search for similar items in EconPapers)
Pages: 16
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa102:10025

DOI: 10.22004/ag.econ.10025

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