Contracts between agricultural intermediaries and their growers are remarkably diverse. Substantial differences exist across commodities in the extent to which written versus oral contracts are used, in contractor participation at the farm level, and in the specific mechanisms used to pay growers (e.g., use of tournaments and the number and types of performance indicators employed) to name just a few examples. Observed differences are partly due to variation in the uses to which growers' produce will be put. Wu documents this sort of variation by examining contracts from California's processing-tomato industry where there are over thirty processors, each with a unique incentive contract for its growers. Interestingly, the author finds that processors with similar end products use similar types of incentive contracts.
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12349.
Length: Date of creation: 05 May 2005 Date of revision: Publication status: Published in American Journal of Agricultural Economics, August 2004, Vol. 86 (3), pp. 842-847. Handle: RePEc:isu:genres:12349
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