Farmers' preferences for crop contracts

Kaouthar Lajili, Peter J. Barry, Steven T. Sonka, Joseph T. Mahoney

Research output: Contribution to journalArticlepeer-review

Abstract

An empirical approach combining elements of principal-agent theory and transaction cost economics is used to determine farmers' preferences for contract terms in crop production. The approach is tested by asking grain farmers to rank contract choices and specify price premiums in simulated case situations. The statistical results indicate that farmers' preferences for rates of cost sharing, price premiums, and financing arrangements are significantly influenced by asset specialization and uncertainty associated with the case situations, and by selected business and personal characteristics.

Original languageEnglish (US)
Pages (from-to)264-280
Number of pages17
JournalJournal of Agricultural and Resource Economics
Volume22
Issue number2
StatePublished - Dec 1 1997

Keywords

  • Contracting
  • Finance
  • Principal-agent
  • Transaction costs

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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