Contracts between growers and handlers use four instruments—input control, field visits, quality measurement, and residual price risk—to align incentives and coordinate production in California produce markets.

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Abstract

We examine the structure of contractual relations between growers and first handlers in California fruit and vegetable markets. We identify four generic instruments—input control, field visits, quality measurement, and residual price risk—which are used to coordinate relations between growers and first handlers and which help to alleviate information asymmetries and align incentives between contracting parties.

BibTeX

@Article{	  hueth-etal99,
  author	= {Brent Hueth and Ethan Ligon and Steven Wolf and Steven
                Wu},
  title		= {Incentive Instruments in Fruit and Vegetable Contracts:
                Input Control, Monitoring, Measuring, and Price Risk},
  journal	= {Review of Agricultural Economics},
  year		= 1999,
  volume	= 21,
  number	= 2,
  pages		= {374--389}
}