Dynamics of structural change in agriculture, transaction cost theory and market efficiency: The case of cultivation contracts between agricultural enterprises and the food industry

Abstract

In developed economies, the increasing openness of markets, the ease of trade and the speed of information lead to territorial imbalance and marginalization phenomena of small agricultural activities that cannot compete with the new models of agri-food systems. In this research, starting from this situation, we analyze through the Transaction Cost Theory what can be practised too recover competitiveness margins for small farms. From the study, it emerges that cultivation contracts represent a valid tool for the solution of various marginalization problems of many agricultural enterprises. In particular, from the experience gained over the past few years in Sicily, the cultivation contract brings benefits to both the food and agricultural enterprise. The validity of the food supply chain vertical integration model is based on this aspect.