Fragile Social Norms: (Un) Sustainable Exploration of Forest Products

The exhaustion of natural resources is a central problem in the international agenda. The particular case of Amazon forest is at the top on the international environmental debate. Two related problems are keys to be considered in the discussion of sustainable development in this region. First the predatory use of the natural resources of the forest mainly timber and genetic resources. Second the recognition of the existence of a population of around 20 million inhabitants in the region defined as “Legal Amazon Area”, aiming the improvement on the living conditions, enhancement of income level and acceleration of development. How to match both objectives is a puzzle faced by the present generation. The region is populated by initiatives of international non‐governmental‐organizations, most of them carrying good intentions but lacking the necessary knowledge on local formal and informal institutions to find ways to reach sustainable development. The result is the accelerated process of natural resources depletion, and social disorganization. The case of the production of Brazilian Nuts stands as a corollary of the lack of an institutional structure of property rights that does not provide incentives for sustainable development. The opposite effect is being observed as a result of the fragility of observable institutional arrangements. The case provides the counterfactual for the analysis of Ostrom (1990; 2008), where she presents virtuous cases of sustainable exploration of natural resources, mostly based on informal but solid institutions.sustainable exploration of forest resources, social norms and sustainability, common pool resources, Resource /Energy Economics and Policy,

Fragile Social Norms: (Un) Sustainable Exploration of Forest Products

The exhaustion of natural resources is a central problem in the international agenda. The particular case of Amazon forest is at the top on the international environmental debate. Two related problems are keys to be considered in the discussion of sustainable development in this region. First the predatory use of the natural resources of the forest mainly timber and genetic resources. Second the recognition of the existence of a population of around 20 million inhabitants in the region defined as “Legal Amazon Area”, aiming the improvement on the living conditions, enhancement of income level and acceleration of development. How to match both objectives is a puzzle faced by the present generation.The region is populated by initiatives of international non-governmental-organizations, most of them carrying good intentions but lacking the necessary knowledge on local formal and informal institutions to find ways to reach sustainable development. The result is the accelerated process of natural resources depletion, and social disorganization. The case of the production of Brazilian Nuts stands as a corollary of the lack of an institutional structure of property rights that does not provide incentives for sustainable development. The opposite effect is being observed as a result of the fragility of observable institutional arrangements.The case provides the counterfactual for the analysis of Ostrom (1990; 2008), where she presents virtuous cases of sustainable exploration of natural resources, mostly based on informal but solid institutions

Agribusiness systems analysis: origin, evolution and research perspectives

The present essay revisitsthe concept of agribusinesssystems, discussesits evolution based in the institutional perspective highlighting the property rights and contractual approaches. It concludes with suggested research topics in the field of economics of organizations applied to agricultur

Determinantes dos arranjos contratuais: o caso da transação produtor-processador de carne bovina no Uruguai

Quais os determinantes da escolha do arranjo contratual nas transações entre produtores e processadores de carne bovina? A pergunta problema se insere no estudo dos mecanismos associados à coordenação da produção para dar respostas às preocupações dos consumidores. Observa-se a coexistência de arranjos contratuais nos sistemas produtivos de carne bovina, entre os quais a transação direta entre o pecuarista e o frigorífico, ou via intermediário especializado. A Economia dos Custos de Transação (ECT) pode ser utilizada para explicar a escolha dos arranjos contratuais observados, como resposta aos desafios de ganhos de eficiência "economizando" nos custos das transações. O presente estudo focaliza o sistema agroindustrial de carne bovina uruguaio, sendo estruturado em três partes. Primeiro a análise do histórico das relações entre produtores e processadores, e mudanças do ambiente institucional. A seguir, a partir das dimensões da transação (freqüência, especificidade de ativo e incerteza) geram-se hipóteses a respeito dos determinantes da escolha dos arranjos contratuais. Finalmente as hipóteses são testadas a partir de um modelo logit. Utiliza-se um painel de dados com a totalidade de transações realizadas entre produtores e processadores fornecidos pelo Ministério de Agricultura do Uruguai (77.000 transações). Os resultados validam estatisticamente as hipóteses levantadas a respeito dos determinantes da escolha do arranjo contratual entre produtores e processadores. Uma transação tem maior probabilidade de se alinhar com o arranjo contratual direto (mais coordenado) quanto maior o grau de ativos específicos envolvidos no produto, quanto menor a distância entre o produtor e o processador e quanto maior a freqüência de transações entre as partes envolvidas, corroborando a teoria de ECT.What are the determinants of the commercial channel choice in the beef producers-processors transactions? The question refers to the coordination and production control problem associated to changes in consumer's awareness of specific attributes in food products. Two contractual arrangements coexist in this transaction: direct-contracting and broker-induced transactions Transaction Cost Economic offers helpful insights to understand the reason for the development and adaptations of different contractual arrangement moved by transaction cost economizing perspective. The empirical analysis is focused in the Uruguayan beef agro-industrial system. Analysis integrates (i) institutional and organizational changes in the beef industry; (ii) based on the analysis of the transaction dimensions (frequency, asset specificity and uncertainty) we address hypothesis of the determinants of the contractual arrangement in the beef producers-processors transaction; and (iii) we run a statistical test of the hypotheses based on a logit model. We used a panel data with producers-processors transaction from Uruguayan Agricultural Bureau (77,000 transactions). We confirm the hypotheses of the determinants of the contractual arrangement choice. The probability of a transaction being aligned with the direct contractual arrangement increase in transaction with higher asset specificity (i.e., young steer), lower distance between the producer and the processor, and with higher frequency of transaction.Coordenacao de Aperfeicoamento de Pessoal de Nivel Superior (CAPES

Building Supply Systems from Scratch: The Case of the Castor Bean for Biodiesel Chain in Minas Gerais, Brazil

The present study contributes to identifying obstacles to the development of a local biodiesel agro-industrial system (AGS) in the state of Minas Gerais, Brazil. The research questions are: “How do local social characteristics influence the organizational effectiveness of agents involved in the joint production effort?”; and “How can the institutional arrangement of biodiesel production be described?” The method adopted is the case study, focused on family farmers served by the Family Farmers Rural Extension and Technical Assistance Company (EMATER). This state organization introduced castor beans (Ricinus communis L.) to family farmers as an alternative crop to supply a processing plant (Darcy Ribeiro Biodiesel Plant—DRBP) in northern Minas Gerais state, Brazil. These family farmers are not horizontally organized, and sign individual contracts with DRBP. The paper concludes that the primary obstacle to developing the biodiesel AGS with castor beans in Minas Gerais is the lack of horizontal organization among family farmers

International Demand Shaping Governance Mechanisms in Brazilian Beef Agri-Systems: The Case of the Three Main Processors

Which specific investments do the industry and the cattle producers need for their coordination in order to meet the demands of the international market and participate in it? Insertion in the international market is a multifaceted and complex theme, which represents a challenge for the market and for the research in economy of organizations, because it focuses on the systemic coordination of a certain segment for the generation of value as an organizational strategy. Through critical observation of export sub-systems, their various institutional environments and their differences from internal issues can be considered central, as this leads to specific investments to operate in these markets in uncertain environments. This gap encourages and justifies this research, which aims to present and advance the concept of agribusiness system (SAG). Specifically, we sought to identify the observed regularities of the agents involved in these transactions — specific assets invested, degree of recurrence, degree of knowledge and adaptability — internal and to the external market and to compare them. Such an analysis seeks to delimit the institutional differences, the coordinating agents of the different strictly coordinated systems. Finally, to determine the boundaries of a typical system and one that meets specific demands and the need for coordination among the agents to serve them by focusing on systems geared to the international market. Through the methodology of multiple case studies, the three largest slaughter and processing industries in Brazil and their relationship with the farmers in relation to the Sub-System Strictly Coordinated (SSSC) for export to the European Union were addressed. Among the regularities of the case studies, the emergence of SSSCs for the internal market focused on quality resulting from the process of creation of the SSSC-exporter allowed to explore the degree of organizational tolerance of the arrangements of these companies. The cases also provided findings about organizational tolerance and the relation of specific investments and quality in the chain

A COORDENAÇÃO SIMULTÂNEA DE DIFERENTES CANAIS COMO ESTRATÉGIA DE DISTRIBUIÇÃO ADOTADA POR EMPRESAS DA AVICULTURA DE POSTURA

This study investigates the reasons which lead the companies to keep simultaneous vertical integrated, third part and hybrid distribution channels. Companies establish different coordination structures, the organizational arrangements, which determine how the agents involved cooperate to the development of distribution activities, according to Transaction Cost Economics and Dynamic Competence. Even choosing different distribution channels, why the company does not establish one single organizational arrangement? What factors may justify the establishment of different arrangements? Possible explanations to those questions have been pointed out in multiple distribution channels. The empirical research indicates that firms establish multiple efficient equilibrium, to take advantage of the better of each one, by minimum coordination cost. The results are specific to distribution activities, but the analysis may be replicable to other activities within the firm, regarding to its coordination.distribution channels, poultry industry, contracts, organizational arrangements.,

Enforceable and unenforceable laws in agribusiness systems

The statement that there are laws that are simply "unenforceable" is quite common in Brazil. This study aims to analyze how incentives contribute to the enforcement of formal rules. The laws chosen in this study are: land use and conservation law and agrochemicals law, focused on the storage and return of containers. The theoretical framework is based on transaction and measurement costs, and property rights. Five propositions were developed for this study related to the incentives for the enforcement of formal rules, namely: the alignment of the formal rule with the social norms; the influence of private interest; the influence of the State's interest; monitoring costs; and adoption costs to formal norms. For the empirical part, we opted for the multiple case study method, contemplated by analyses of descriptive statistics. It is worth noting that a cut out was made in relation to the agricultural crops and regions selected. The results support four of the five propositions of this study. The exception was due to the effect of the cost to adopt the rule. It was concluded that rules addressing assets of common ownership are characterized by a more complex enforcement mechanism, since it does not involve a purely economic issue. Actions that raise the awareness on these rules and the awareness regarding the scope of the subject are important so that the social rules, which do not change rapidly, can be in line with the formal rule, thus promoting its enforcement.É comum a afirmação de que existem leis que "não pegam". No presente estudo foi feita uma análise acerca dos incentivos que contribuem para o cumprimento das normas formais. As leis escolhidas foram: a lei de uso e conservação do solo, e a lei dos agrotóxicos, com ênfase no armazenamento e retorno das embalagens. Como base teórica custos de transação e mensuração, e direitos de propriedade são utilizados. Foram fundamentadas cinco proposições de trabalho, que consideram os incentivos ao cumprimento das normas formais, a saber: alinhamento da norma formal às normas sociais; a influência do interesse privado; a influência do interesse do Estado; custos de monitoramento; e custos de adesão às normas. Para a parte empírica optou-se pelo método de estudo de casos, contemplados por análises de estatísticas descritivas. Destaca-se que foi feito um recorte com relação às culturas agrícolas e regiões selecionadas. Os resultados dão suporte a quatro das cinco proposições de trabalho. A exceção ficou por conta do efeito do custo de adesão à norma. Concluiu-se que normas que tratam dos bens de propriedade coletiva se caracterizam por um mecanismo de cumprimento mais complexo, já que não se trata de uma questão puramente econômica. Ações que promovam o conhecimento de tais normas e a conscientização da amplitude do tema são importantes para que as normas sociais, que não se modificam rapidamente, estejam alinhadas à norma formal promovendo o seu cumprimento

International Demand Shaping Governance Mechanisms in Brazilian Beef Agri-systems: The Case of the Three Main Processors

Drawing inspiration from international institutions and how they influence American organizations and their internal arrangements, this paper discusses the emergence of coordination between beef cattle producers and processors as a transition of neoclassic market transactions to a contractual form to participate in international trade. Three case studies from the largest Brazilian processors show the rise of strictly coordinated sub-systems to address new demands that rose from export requirements. The key finding from the case studies is that institutional shocks can drive new architectures in the system because it can generate new ones, described as strictly coordinated sub-systems that demand different organizational and technical support. In addition, the cases provide findings about organizational tolerance and its relationship with different formal institutions, based on an analysis of national and international supply in quality systems

Determinants of Outsourcing Contracts in Agricultural Mechanization Services: the Brazilian Coffee Agribusiness Case

The Brazilian Coffee Agribusiness system has been modified over the last years. An evidence is the outsourcing contracts in agricultural mechanization of harvesting services. Brazilian coffee growers have replaced their own machineries for specialized services firms. The Coase (1937)'s make or buy paradigm sheds light the decision of farmers of the coffee chain with the investment lens. The investigation analyzes the determinants of outsourcing contracts in the transaction of harvesting mechanization in the agribusiness system of coffee in Brazil based on a quantitative approach through a probit regression with 105 Brazilian coffee growers’ interviews. The results validated the path dependence aspect and the hypothesis of the asset specificity and uncertainty of the efficient alignment argument of the Transaction Cost Economics, pointing out the high level of education of the farmer and the adoption of contracts as a way of coordinating other transactions as determinants of the outsourcing contracts of the transaction of harvesting mechanization. The study brought a change in coffee grower’s profile to a modern pattern of decision-making with three different institutional arrangements for the transaction of harvesting mechanization: total vertical integration, tapped vertical integration and outsourcing contracts or only outsourcing contracts