Land rights protection in the pulp and paper production system

This article explores how the quality of institutions influences the strategic choice of agents in the pulp and paper production system based on the forest plantation sector. In order to proceed with the study, we employ the Economic Analysis of Property Rights (Barzel, 1982, 1989, 2002) as foundation, and test the proposition:  in federative states where the institutional environment is fragile and therefore the State has a high cost to enforce property rights, private mechanisms stand out in the protection of property rights. According to Dixit (2009, p. 8), “if the government does not protect property rights, at least not as well as owners require, many private arrangements arise to satisfy the owners' needs”. The analysis of three business cases of companies with plantations in more than one federative unit revealed the broad range of private mechanisms in place to cope with insecure land rights. In addition to countrywide strategies, in the federative units where government fails to be a good property rights steward, we found geographically specific initiatives being used. Another finding was the identification of variables that are able to evaluate the quality of institutions and employed in the companies´ decision-making process for the selection of land rights protection strategies. Findings altogether are empirical evidence of how the quality of institutions influences the strategic choice of land rights protection in the forest plantation sector in Brazil

The role of empirical research in the study of complex forms of governance in agroindustrial systems

The growing complexity of supply chains poses new challenges for Agricultural Research Centers and statistical agencies. The aim of this perspective paper is to discuss the role of empirical research in understanding the complex forms of governance in agribusiness. The authors argue that there are three fundamental levels of analysis: (i) the basic structure of the market, (ii) the formal contractual arrangements that govern relations within the agroindustrial system and (iii) the transactional dimensions governed by non-contractual means. The case of the agrochemical industry in Brazil illustrates how traditional analyses that only address market structure are insufficient to fully explain the agricultural sector and its supply chain. The article concludes by suggesting some indicators which could be collected by statistical agencies to improve understanding of the complex relationships among agribusiness segments. In doing so, the paper seeks to minimize costs and to enable a better formulation of public and private policies

Contracts and Agreements: Shifter Parameters in the Measurement Cost Theory

The concept of “contract” has similar but not identical interpretations for lawyers and economists. Both Economic and Legal theories distinguish transactions from contracts based on the possibility to rely on court enforcement. Formal and informal promises are enforceable by courts, however there is not a clear distinction between a contract and an agreement since agents do not know a priori the competence of courts to interpret and enforce promises. The measurement branch of transaction cost economics proposes that economic actors are motivated to protect legal and economic rights, adopting reputation mechanisms when they foresee that courts face measurement difficulties to allocate property rights in case of disputes on a specific transaction dimension. Otherwise an external contract is expected to be chosen. The present paper introduces the effect of capabilities that affect the ability to adjudicate. This concept adds to the measurement cost theory as it stands, being part of the theoretical construct of shifters that affect the choice between formal contracts and informal agreements. Two concepts are introduced in this paper: measurement competence of contract parties and competence of courts to adjudicate. The paper introduces dynamic effects in the measurement cost theory since competences are cumulative, knowledge is dispersed and courts develop routines to organize the knowledge. As a result, the paper closes a gap between the measurement branch of transaction cost theory and the capabilities perspective, opening new veins for empirical analysis

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Este trabalho de pesquisa tem o principal objetivo de avaliar parcialmente a política de subsídio a fertilizantes adotada no Brasil em 1975, enfocando os efeitos por ela produzidos nas culturas de soja e arroz. Baseando-se em critérios de eficiência e equidade com relação à distribuição dos benefícios e custos, o trabalho procura avaliar o impacto do programa nos vários setores envolvidos. A hipótese básica deste trabalho é a de que os efeitos da adoção da política de subsídio direto para fertilizantes não se fizeram sentir de modo homogêneo nas duas culturas analisadas, recaindo o benefício preponderantemente sobre a soja. O modelo propõe-se ainda a avaliar o custo governamental envolvido com a implementação do programa. Para a avaliação da política de subsídio, adotou-se um modelo simples de oferta e procura que envolve três mercados que são: arroz, soja e fertilizantes. Basicamente, a análise busca avaliar qual seria a diminuição na quantidade demandada de fertilizantes e consequentemente a diminuição na quantidade ofertada de arroz e soja, caso não fosse implementado o programa de subsídio. A partir daí, calcula-se uma série de parâmetros relacionados a custos e benefícios advindos da política em questão. Os resultados obtidos evidenciaram um comportamento diferenciado entre as culturas analisadas. Tendo sido identificada a tendência dos efeitos positivos da política recaírem predominantemente sobre a soja. Em suma, pode-se afirmar que os custos governamentais envolvidos com a soja e o arroz foram da ordem de Cr$181,51 milhões e Cr$ 177,85 respectivamente; as receitas governamentais foram abaixo dos custos na maior parte das análises; o benefício dos produtores são acentuadamente diferentes entre culturas; e os ganhos no comércio exterior consideráveis, tanto no que tange às exportações de soja como no que se refere ao abastecimento de arroz. Os resultados obtidos permitem que se conclua que uma ação política atingindo o setor agrícola como um todo, apresenta um caráter altamente distorcido, fruto da própria heterogeneidade do setor. Propõe-se finalmente, que um programa de subsídio não deve ser entendido como uma solução definitiva e sim como um componente temporário entre uma série de medidas passíveis de escolha.The main objective of this research study is a partial evaluation of the fertilizer policy of subsidies adopted in Brazil in 1975. The study focuses on the policy effects on soybean and rice crops. Based on efficiency and equity criteria relative to cost/benefit distribution, this study attempts to evaluate the impact of the policy program on the various sectors involved. The basic hypothesis is that the effects from adopting the subsidy policy applied directly to fertilizers were not evenly felt by the two crops with benefits going predominantly to soybeans. The model also attempts to evaluate the government costs involved as a result of the program implementation. n order to evaluate the subsidy policy, a simple supply and demand model encompassing three markets is used: rice, soybean and fertilizer. Basically, the analysis attempts to evaluate how much reduction would occur in fertilizer demand and thus the extent to wich rice and soybean supply would be curtailed in case the policy program were not implemented. From these results, a series of cost//benefit parameters are determined based on the policy program. Results present evidence indicating that both crops behaved differently as a result of the policy program and positive effects were found to have a tendency of falling predominantly on soybeans. In short, it can be stated that government costs resulting from the soybean and rice program amounted to Cr$181,50 and Cr$ 177,85 million respectively; government revenves were below costs throughout most of the analysis; benefits accrued to producers were significantly different between the two crops; and foreign trade gains were considerable both with respect to soybean exports and rice supply. The results support the conclusion that a policy program affecting the agricultural sector as a whole may lead to major distortions because of the heterogeneity of the sector. Finally, it is suggested that a subsidy program should not be understood as a final solution but as a temporary component among a series of possible measures to be chosen

Rural credit in Brazil: contrat's evolution at an institutional approach

This article outlines a New Institutional Economics’ approach of rural credit. The mainstream relies in the understanding that the rural credit contracts are hybrid forms in response to the agrichain´s complexity. The object of the research was operational credit contract for soybeans farms. The research consisted on qualitative researches in the extent that they sought to comprehend in a more profound level the rules of game for the rural financing contracting environment based on the economic agent’s perceptions. The results highlighted the agent’s perception that the judicial system is not strong enough to performance an efficient enforcement of the contracts. In response to this institutional challenge, the agents and the government manage adaptations in the contracts, which has been successful in the agent’s point of view. In the other hand, the informational system has showed weaknesses in protecting the creditor’s right. This scenario open breaches to opportunist actions and adverse selection. In order to mitigate these problems the agents govern interdependent transactions as a tool for risk sharing