Contract farming-mechanism of coordination between farmers and agribusiness firms Cover Image

Договори во фармерството-механизам на координација меѓу фармерите и агрибизнис фирмите
Contract farming-mechanism of coordination between farmers and agribusiness firms

Author(s): Katerina Hadzi-Naumova Mihajlovska
Subject(s): Economy
Published by: Економски институт - Скопје
Keywords: Contract farming mechanism; implementation of contract farming in Macedonia; government agencies for coordination between farmers and supply chain;

Summary/Abstract: This article elaborates the meaning of contract farming as a mechanism to coordinate linkage between farmers and agribusiness firms. It reviews the changes in agri-food systems that are leading to tighter coordination of supply chains and discusses the theoretical basis for contract farming as a chain governance strategy. The international experience reviewed in this paper suggests that under an appropriate enabling environments, the potential advantages of contracting for farmers and agribusiness firms tend to outweigh the potential disadvantages. The Republic of Macedonia has need of implementation on contract farming for reinforcement of all chain actors in agri-food system. Modern organizational arrangements in agri-food system might promote the emergence of power imbalances and unfavourable terms of trade in the transactions between smaller-scale chain actors and the larger players with typical experience with the leading coordination role in a managed supply chain. But those perceptions notwithstanding, contract farming is being promoted by governments and development agencies as a coordination mode that can facilitate the integration of small farmers into supply chains.

  • Issue Year: 10/2008
  • Issue No: 2
  • Page Range: 209-224
  • Page Count: 16
  • Language: Macedonian