We consider how to organize the processing and marketing of an agricultural product when farming costs are known only by the individual farmers. We show that when marginal costs are un-correlated and the market for final goods is competitive, the socially optimal production levels may be...

This paper analyzes a contract between farmers and a large company in the Danish food industry, Danisco Foods. Production of green peas requires a very accurate coordination, which is obtained through centralized decision-making. The contract is based on a tournament system providing risk...

We investigate the unique contractual arrangement between a large Ethiopian sugar factory and its adjacent outgrower associations. The only significant difference between the sugarcane production on the factory-operated sugarcane plantation and on the outgrower-operated plots is the remuneration...

In this paper, we suggest that inefficiency may be an indirect, on-the-job compensation to agents in an organization. We show how to use actual production data to reveal the trade-offs between different inefficiencies (slacks). Moreover, we discuss how to use this to improve productivity...