Contractual arrangements and transaction costs: the case of smallholder mechanization in southern Brazil.
Abstract: The mechanization of agricultural production plays an important and in course of time increasing role in the course of agricultural and rural development. Mechanization offers several potential improvements to farming systems such as increased land and labor productivity, reduction of risks, and increase of quality and food safety of animal and plant products. However, investments in own machinery, in particular for small holders, may not be the least-cost option in comparison with outsourcing the required machinery services through different contractual relationships. To choose the optimal contract for obtaining machinery services, it is necessary to evaluate conventional machinery costs as well as transaction costs. The main objective of this research was to assess the role of transaction costs in the choice among alternative contractual arrangements for provision of machinery services. Our hypothesis was that transaction costs can be higher than machinery costs, and therefore, they can play a leading role in the choice of contractual arrangements for provision of machinery services. The empirical data on conventional machinery and transaction costs were collected from farms in Southern Brazil that procure services for corn harvest through various informal and formal contractual forms. We found that transaction costs can be higher than conventional machinery costs, and therefore, influence the choice of contractual arrangement.
| Main Authors: | , |
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| Other Authors: | |
| Format: | Separatas biblioteca |
| Language: | Ingles English |
| Published: |
2003-02-11
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| Subjects: | Economia rural, Custo de transação, Contratação de serviços, Contractual arrangements, Outsourcing machinery, Transaction costs, Mecanização Agrícola, Mechanization, Brazil, |
| Online Access: | http://www.alice.cnptia.embrapa.br/alice/handle/doc/529048 |
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