The Nature of the Farm: Contracts, Risk, and Organization in Agriculture

The Nature of the Farm: Contracts, Risk, and Organization in Agriculture

by Douglas W. Allen, Dean Lueck
     
 

ISBN-10: 0262511851

ISBN-13: 9780262511858

Pub. Date: 09/01/2004

Publisher: MIT Press

The Nature of the Farm is a theoretical and empirical study of contracts and organization in agriculture based on the transaction cost framework. Transaction costs are important in agriculture because nature (for example, seasonality, weather, pests) plays such a critical role in determining output and limiting the ability of farmers to specialize. The book

…  See more details below

Overview

The Nature of the Farm is a theoretical and empirical study of contracts and organization in agriculture based on the transaction cost framework. Transaction costs are important in agriculture because nature (for example, seasonality, weather, pests) plays such a critical role in determining output and limiting the ability of farmers to specialize. The book develops specific models and tests the implications of those models against data sets from across
North American agriculture, as well as against historical case studies such as eighteenth-century European land contracts and the late nineteenth-century Bonanza farms in the United States.

The book is organized in three parts.
Part I examines the classic question of what determines the optimal choice between fixed rent and cropshare arrangements, concluding that it is determined by a trade-off between incentives to overuse rented land and incentives to underreport shared output. Part II tests several predictions derived from a standard risk-sharing model of contracts and finds little evidence that risk sharing is important in contract choice. Part III extends the transaction costs analysis to broader organizational issues. It introduces seasonality and timeliness costs as forces influencing the gains from specialization and the costs of contracting, and finds that farm ownership and farm organization are routinely shaped by these forces.

The MIT Press

Read More

Product Details

ISBN-13:
9780262511858
Publisher:
MIT Press
Publication date:
09/01/2004
Edition description:
New Edition
Pages:
266
Product dimensions:
7.00(w) x 9.00(h) x 0.60(d)
Age Range:
18 Years

Table of Contents

Preface
1Introduction1
2Farming in North America17
IContracts and the Transaction Cost Framework31
3The Simplicity of Agricultural Contracts33
4Choosing between Cropshare and Cash Rent Contracts49
5Sharing Inputs and Outputs69
IIRisk Sharing as an Alternative Framework93
6Risk Sharing and the Choice of Contract95
7Ratchet Effects in Agricultural Contracts121
IIIExtending the Framework: Farm Organization137
8Ownership versus Contracting for the Control of Assets139
9Farm Organization and Vertical Control167
10Conclusion199
App. A: Data205
App. B: Mathematical219
Notes223
References243
Index255

Read More

Customer Reviews

Average Review:

Write a Review

and post it to your social network

     

Most Helpful Customer Reviews

See all customer reviews >