The Role of Contracts in the Organic Supply Chain: 2004-2007

45 Pages Posted: 28 Jul 2012

See all articles by Carolyn Dimitri

Carolyn Dimitri

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Lydia Oberholtzer

affiliation not provided to SSRN

Michelle Wittenberger

affiliation not provided to SSRN

Date Written: December 1, 2010

Abstract

Organic food products are excellent candidates for contract production and marketing because they are produced using a distinct process and are in high demand. This report summarizes survey data on contracting in the organic sector, addressing the extent of contracting, the rationale for using contracts, and contract design for select commodities. The central survey data were collected from certified organic handlers (intermediaries) in the United States who marketed and procured organic products in 2004 and 2007. Contracting is widespread in the organic sector, and, in 2007, firms used contracts most frequently to secure organic products essential to their business and to source products in short supply. Large firms were more likely to use contracts for procurement, and these firms contracted for a larger share of their procurement needs. Nearly all contracts required suppliers to provide evidence of organic certification. Firms using contracts rarely assisted suppliers with obtaining organic certification or the transition to organic. Most contracts include provisions regarding quality, and quality verification was an essential component of these contracts. Prices were determined in a variety of ways and, in some cases, depended on delivered quality.

Keywords: Organic supply chain, contracts, organic marketing, organic procurement, intermediaries, certified organic handlers, contract design, certified organic

Suggested Citation

Dimitri, Carolyn and Oberholtzer, Lydia and Wittenberger, Michelle, The Role of Contracts in the Organic Supply Chain: 2004-2007 (December 1, 2010). USDA-ERS Economic Information Bulletin No. 69, Available at SSRN: https://ssrn.com/abstract=2114386 or http://dx.doi.org/10.2139/ssrn.2114386

Carolyn Dimitri (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

Lydia Oberholtzer

affiliation not provided to SSRN

Michelle Wittenberger

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
43
Abstract Views
307
PlumX Metrics