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Food Processors' Use of Contracts to Purchase Agricultural Inputs: Evidence from a Pennsylvania Survey

Published online by Cambridge University Press:  15 September 2016

Edward C. Jaenicke ,
Martin Shields  and
Timothy W. Kelsey
Edward C. Jaenicke
Affiliation:
Department of Agricultural Economics and Rural Sociology at Penn State University in University Park, Pennsylvania
Martin Shields
Affiliation:
Martin Shields is in the Department of Economics at Colorado State University
Timothy W. Kelsey
Affiliation:
Department of Agricultural Economics and Rural Sociology at Penn State University in University Park, Pennsylvania
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Abstract

Using data from a survey of Pennsylvania food processors, we investigate what firm-level characteristics make a processor more or less likely to buy agricultural inputs and ingredients though contracts. We find that over 20 percent of Pennsylvania processors use contracts, and over 44 percent of agricultural inputs (based on value) are purchased under contract. We also analyze the two related questions of what firm attributes, attitudes, or other factors make a firm more likely to use contracts at all, and what factors lead a processor who does contract to use them more intensively.

Keywords

contractingfood processorslogitsample selection
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 36 , Issue 2 , October 2007 , pp. 213 - 229
Copyright
Copyright © 2007 Northeastern Agricultural and Resource Economics Association 

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