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| Nadolnyak, Denis A.; Fletcher, Stanley M.; Revoredo-Giha, Cesar. |
| In the paper, alternative contractual arrangements between crop producers and processors are evaluated with a view of addressing the major issues present in peanut markets in the U.S., the major EU supplier of high quality peanuts. The issues are the thinness of the spot markets and the absence of quality premiums, both of which impair market efficiency. Results indicate that introducing contracts with a system of quality differentials creates incentives for producer self-selection to participate in the post harvest cash market. Moreover, in the presence of sufficiently high common production risk, tournament contracts are more efficient and preferred by the producers than the standard fixed premium schedules. |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Contracts; Tournaments; Efficiency; Spot markets; Peanuts; Marketing. |
| Ano: 2005 |
URL: http://purl.umn.edu/24703 |
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| Nadolnyak, Denis A.; Fletcher, Stanley M.. |
| In the paper, we analyze two issues that are important in the U.S. peanut markets: the absence of explicit quality premiums in the crop contracts, and the thinness of the postharvest cash/spot markets, which obstructs the operation of current production support policies. We argue that introduction of quality differentials in the form of either fixed premium or rank-order tournament contracts may kill two birds with one stone by increasing the spot market turnover and providing incentives for increasing crop quality. In addition, this arrangement is likely to reduce the costs of the federal support programs. |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Contracts; Tournaments; Efficiency; Cash markets; Peanuts; Marketing. |
| Ano: 2006 |
URL: http://purl.umn.edu/25274 |
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