IDEAS home Printed from https://ideas.repec.org/p/lnd/wpaper/200511.html
   My bibliography  Save this paper

Contract Marketing in the US after the 2002 Farm Act: The Case of Peanuts

Author

Listed:
  • Cesar L. Revoredo Giha

    () (Department of Land Economy, University of Cambridge, UK)

  • Denis A. Nadolnyak

    (Department of Agricultural and Applied Economics, University of Georgia, USA)

  • Stanley M. Fletcher

    (Department of Agricultural and Applied Economics, University of Georgia, USA)

Abstract

The elimination of the marketing quota system that regulated the peanut market since the 1930s has been accompanied by the emergence of marketing contracts between farmers and peanut buyers (mainly peanut shellers). Two types of contracts have been observed, forward contracts for delivery at harvest or at a later date and “option to purchase” contracts. We analyze the clauses of contracts used by major shellers in order to infer the motivation behind these contracts (i.e., risk sharing, reduction of transaction costs, improve coordination, exercise of market power, etc.). The analysis points out that the main role of the contracts is to replace the marketing structure existing prior the 2002 Farm Act, where peanut marketing was quite regulated. In this sense, the reduction of transaction costs associated to the need for coordinating a continuous supply of homogeneous quality seems to be the most plausible explanation.

Suggested Citation

  • Cesar L. Revoredo Giha & Denis A. Nadolnyak & Stanley M. Fletcher, 2005. "Contract Marketing in the US after the 2002 Farm Act: The Case of Peanuts," Environmental Economy and Policy Research Working Papers 11.2005, University of Cambridge, Department of Land Economics, revised 2005.
  • Handle: RePEc:lnd:wpaper:200511
    as

    Download full text from publisher

    File URL: http://www.landecon.cam.ac.uk/RePEc/pdf/200511.pdf
    Download Restriction: no

    More about this item

    Keywords

    US agriculture; agricultural marketing; peanuts; economics of agricultural contracts;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lnd:wpaper:200511. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Unai Pascual). General contact details of provider: http://edirc.repec.org/data/dlcamuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.