Determinants of the Choice Among Institutional Arrangements: Evidences in Fertilizers Comercialization for Soybean
RER, Rio de Janeiro, Vol. 47, No. 2, pp. 517-546, April/June 2008
Posted: 3 Aug 2008
Transactions among agribusiness agents are not exclusively carried out on the market, being also governed by alternative types of institutional arrangements, some of which determined upon contractual agreement. In the fertilizers sector, the companies intensified the offer of input packages to farmers, more specifically to soybean producers, object of this article. In order to acquire the fertilizers, these producers may choose to use their own financial resources, to obtain resources through financing with third parties, or they may recur to the said packages, which include soybean and financial resources in addition to the fertilizers, referred by the soybean producers to as exchange, since they acquire fertilizer paying with soybean for future delivery. Thus, the following questions motivate this work: What are the factors that determine the selection of the soybean producer between alternative arrangements for the acquisition of fertilizers? Two hundred interviews were conducted with soybean producers in the States of Goiýs and Mato Grosso. To conclude, packages or arrangements as bundling may be stimulated by reasons of efficiency, with transaction costs economy as one of these possible reasons. Risk aversion and trust leads to the use of the exchange arrangement. Finally, in relation to the scale, largest soybean producers use the arrangement exchange in a great deal, differently from what was expected.
Keywords: Institucional arragements, bundling, trust, transation cost, fertilizers, uncertain
JEL Classification: D23, Q13
Suggested Citation: Suggested Citation