A transaction cost primer on farm organization

Douglas W. Allen, Dean Lueck

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

Agricultural economists, with their knowledge of farming, are well positioned to take advantage of the fertile ground of economic organization. The transaction cost paradigm is particularly useful in addressing such questions and is outlined in this paper. The overriding theme in the transaction cost approach is that patterns of ownership and contracts are chosen to mitigate transaction costs, which result from attempts to establish and maintain property rights. In agriculture, transaction costs are heavily influenced by Mother Nature. Nature's uncertainty, via weather and pests, leads to moral hazard and seasonal forces impose constraints on production cycles that are not often found in the production of most other commodities. Applications in land contracts, asset control, and business organization are discussed.

Original languageEnglish (US)
Pages (from-to)643-652
Number of pages10
JournalCanadian Journal of Agricultural Economics
Volume48
Issue number4
DOIs
StatePublished - Jan 1 2000

ASJC Scopus subject areas

  • Global and Planetary Change
  • Ecology
  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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