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Does Contracting Raise Farm Productivity? The Impact Of Production Contracts On Hog Farm Performance

Author

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  • Key, Nigel D.
  • McBride, William D.

Abstract

The costs and benefits of policies designed to regulate the use of production contracts will depend in part on the impact of these contracts on farm productivity. In this paper we measure the impact of contracting on 1) partial and total factor productivity and 2) the production technology for 479 US hog operations. A sample selection model accounts for the fact that unobservable variables may be correlated with both the decision to contract and farm productivity. Results also identify determinants of farmers' decisions to contract and factors influencing farm productivity.

Suggested Citation

  • Key, Nigel D. & McBride, William D., 2001. "Does Contracting Raise Farm Productivity? The Impact Of Production Contracts On Hog Farm Performance," 2001 Annual meeting, August 5-8, Chicago, IL 20721, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20721
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    File URL: http://ageconsearch.umn.edu/record/20721/files/sp01ke01.pdf
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    References listed on IDEAS

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    1. David A. Hennessy, 1996. "Information Asymmetry as a Reason for Food Industry Vertical Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1034-1043.
    2. V. James Rhodes, 1995. "The Industrialization of Hog Production," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 17(2), pages 107-118.
    3. Scott Johnson, C. & Foster, Kenneth A., 1994. "Risk Preferences and Contracting In the U.S. Hog Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(02), pages 393-405, December.
    4. Gillespie, Jeffrey M. & Eidman, Vernon R., 1998. "The Effect of Risk and Autonomy on Independent Hog Producers' Contracting Decisions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(01), pages 175-188, July.
    5. Shelanski, Howard A & Klein, Peter G, 1995. "Empirical Research in Transaction Cost Economics: A Review and Assessment," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 335-361, October.
    6. Martin, Laura L., 1997. "Production Contracts, Risk Shifting, and Relative Performance Payments in the Pork Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(02), pages 267-278, December.
    7. Lawrence, John D. & Kliebenstein, James, 1995. "Contracting and Vertical Coordination in the United States Pork Industry," Staff General Research Papers Archive 5050, Iowa State University, Department of Economics.
    8. Kliebenstein, James & Lawrence, John D., 1995. "Contracting and Vertical Coordination in the United States Pork Industry," ISU General Staff Papers 199501010800001264, Iowa State University, Department of Economics.
    9. Kliebenstein, James B. & Lawrence, John D., 1995. "Contracting and Vertical Coordination in the United States Pork Industry," ISU General Staff Papers 199507010700001264, Iowa State University, Department of Economics.
    10. Jill E. Hobbs, 1997. "Measuring the Importance of Transaction Costs in Cattle Marketing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1083-1095.
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    Citations

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    Cited by:

    1. Kaplan, Jonathan D., 2001. "Prevention Versus Utilization Of Excess Nutrients From Animal Feeding Operations:The Case Of Managing Nutrient Uncertainty," 2001 Annual meeting, August 5-8, Chicago, IL 20533, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. McBride, William D. & Key, Nigel D., 2001. "Factors Affecting Contractor And Grower Success In Hog Contracting," 2001 Annual meeting, August 5-8, Chicago, IL 20552, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. D'Haese, Marijke F.C. & Verbeke, Wim & Van Huylenbroeck, Guido & Kirsten, Johann F. & D'Haese, Luc, 2003. "Institutional Innovation To Increase Farmers' Revenue: A Case Study Of Small Scale Farming In Sheep: Transkei Region, South Africa," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25888, International Association of Agricultural Economists.
    4. Maheswari, R. & Ashok, K.R. & Prahadeeswaran, M., 2008. "Precision farming technology, adoption decisions and productivity of vegetables in resource-poor environments," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 0(Conferenc), pages 1-10.

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