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3 results on '"CONTRACTUAL SAVINGS"'

1. Managing Quantity, Quality, and Timing in Indian Cane Sugar Production: Ex Post Marketing Permits or Ex Ante Production Contracts?

Author

Patlolla, Sandhyarani, Goodhue, Rachael E, and Sexton, Richard J

Subjects
Judicial System Reform, Climate Change and Agriculture, Public Finance Decentralization and Poverty Reduction, Industrial and Consumer Services and Products, Social Policy, Contract Law, Contractual Savings, Legal Products, Legislation, Regulatory Regimes, Public Sector Economics, Agricultural Economics, Legal Reform, Crops and Crop Management Systems, Economics
Abstract

Private sugar processors in Andhra Pradesh, India use an unusual form of vertical coordination. They issue 'permits' to selected cane growers a few weeks before harvest. These permits specify the amount of cane to be delivered during a narrow time period. This article investigates why processors create uncertainty among farmers using ex post permits instead of ex ante production contracts. The theoretical model predicts that ex post permits are more profitable than ex ante contracts or the spot market under existing government regulations in the sugar sector, which include a binding price floor for cane and the designation of a reserve area for each processor wherein it has a legal monopsony for cane. The use of ex post permits creates competition among farmers to increase cane quality, which increases processor profits and farmer costs. Empirical analysis supports the hypothesis that farmers operating in private factory areas have higher unit production costs than do their counterparts who patronize cooperatives.

Published
2015

2. Managing Quantity, Quality, and Timing in Indian Cane Sugar Production: Ex Post Marketing Permits or Ex Ante Production Contracts

Author

Rachael E. Goodhue, Sandhyarani Patlolla, and Richard J. Sexton

Subjects
Economics and Econometrics, Economics, Legislation, Price premium, SUGAR, VERTICAL COORDINATION, Development, Social Policy, SUGARCANE, Agricultural economics, Contractual Savings, Competition (economics), Agricultural marketing, Price floor, Accounting, QUALITY, Production (economics), Crops and Crop Management Systems,Food&Beverage Industry,Regional Economic Development,Agricultural Knowledge and Information Systems,Rural Development Knowledge&Information Systems, Industrial and Consumer Services and Products, Judicial System Reform, Contract farming, Public Finance Decentralization and Poverty Reduction, Crops and Crop Management Systems, Regulatory Regimes, MARKETING PERMITS, Spot market, Monopsony, Climate Change and Agriculture, Legal Reform, Contract Law, Legal Products, Public Sector Economics, PRODUCTION CONTRACTS, Finance, Agricultural Economics
Abstract

© The Author 2014. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. Private sugar processors in Andhra Pradesh, India use an unusual form of vertical coordination. They issue 'permits' to selected cane growers a few weeks before harvest. These permits specify the amount of cane to be delivered during a narrow time period. This article investigates why processors create uncertainty among farmers using ex post permits instead of ex ante production contracts. The theoretical model predicts that ex post permits are more profitable than ex ante contracts or the spot market under existing government regulations in the sugar sector, which include a binding price floor for cane and the designation of a reserve area for each processor wherein it has a legal monopsony for cane. The use of ex post permits creates competition among farmers to increase cane quality, which increases processor profits and farmer costs. Empirical analysis supports the hypothesis that farmers operating in private factory areas have higher unit production costs than do their counterparts who patronize cooperatives.

Published
2015

3. Managing Quantity, Quality, and Timing in Indian Cane Sugar Production: Ex Post Marketing Permits or Ex Ante Production Contracts

Author

Patlolla, S, Patlolla, S, Goodhue, RE, Sexton, RJ, Patlolla, S, Patlolla, S, Goodhue, RE, and Sexton, RJ

Abstract

Private sugar processors in Andhra Pradesh, India use an unusual form of vertical coordination. They issue 'permits' to selected cane growers a few weeks before harvest. These permits specify the amount of cane to be delivered during a narrow time period. This article investigates why processors create uncertainty among farmers using ex post permits instead of ex ante production contracts. The theoretical model predicts that ex post permits are more profitable than ex ante contracts or the spot market under existing government regulations in the sugar sector, which include a binding price floor for cane and the designation of a reserve area for each processor wherein it has a legal monopsony for cane. The use of ex post permits creates competition among farmers to increase cane quality, which increases processor profits and farmer costs. Empirical analysis supports the hypothesis that farmers operating in private factory areas have higher unit production costs than do their counterparts who patronize cooperatives.

Published
2015

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