Design of Production Contracts

The Swedish processor Findus contracts approximately 500 pea producers annually to secure the company’s supply of green peas for human consumption. A production contract, which has had roughly the same design for decades, regulates the relation between Findus and the pea producers. Agriculture is typically a risky business. The main sources of risk in agricultural production are production risk and price risk. It can be questioned whether the current pricing model in the Findus pea production contract is optimal as the conditions facing a grain farmer have changed due to increased price risk in agricultural commodity markets. The aim of this study is to examine, from the producer’s viewpoint, the current production contract between Findus and its pea producers and whether there are alternative pea pricing models that are more effective for both contract parties given volatile agricultural commodity markets. A quantitative approach is used. The method consists of a telephone survey with a number of Findus pea producers and a mathematical programing model based on mean-variance (EV) analysis (Hardaker et. al., 1997) with historical data from a case farm. The main findings are that the Findus pea production contract functions well in terms of motivation; the pea producers have incentives to maximize the integrated profit (Bogetoft & Ballebye Olesen, 2004). This is also verified by the results of optimization model and the survey. The differences between the examined pricing models are very small both in terms of expected net farm income, expected utility and risk. The value of incorporating Findus peas in the crop rotation is considered to be high. In the south western part of Skåne, Findus peas is the second most profitable crop in the crop rotation in terms of gross margin 3 (GM3). This can be explained by substantially lower costs compared to alternative crops, especially in terms of machinery costs.Den svenska företaget Findus AB kontrakterar årligen cirka 500 ärtodlare för att säkra bolagets behov av gröna ärter avsedda för humankonsumtion. Förhållandet mellan Findus och ärtproducenterna regleras av ett produktionskontrakt, som i stort sätt har haft samma utformning i årtionden. Lantbruk är en riskfylld bransch där de huvudsakliga riskkällorna är produktions- och prisrisk. Det kan ifrågasättas om prissättningsmodellen i det nuvarande kontraktet är optimal då villkoren för spannmålsodlare har förändrats eftersom prisvolatiliteten på spannmålsmarknaden ökat under senare år. Syftet med denna studie är att utifrån producenternas synvinkel undersöka det nuvarande produktionskontraktet mellan Findus och deras ärtproducenter och om det finns alternativa prissättningsmodeller som är mer ändamålsenliga för båda kontraktsparter med avseende på den ökade prisvolatiliteten på spannmålsmarknaden. Kvantitativa metoder har använts och består av en telefonundersökning med ett antal av Findus ärtproducenter och en matematisk programmeringsmodell baserad på kvadratisk optimering (Hardaker et. al., 1997). I modellen har historiska data från en fallgård använts. De huvudsakliga slutsatserna är att Findus produktionskontrakt fungerar väl när det gäller motivation, ärtproducenterna har incitament för att maximera den integrerade vinsten (Bogetoft & Ballebye Olesen, 2004). Detta verifieras också av resultaten av optimeringsmodellen och enkätundersökningen. Skillnaderna mellan de undersökta prissättningsmodellerna är mycket små i termer av både förväntad nettoinkomst, förväntad nytta och risk. Värdet av att innefatta ärter odlade för Findus i växtföljden är hög. I sydvästra Skåne är Findus ärter den näst mest lönsamma grödan i växtföljden i form av täckningsbidrag 3 (TB3). Detta kan framförallt förklaras av väsentligt lägre maskinkostnader jämfört med alternativa grödor

Swedish Meats

In 2007 Swedish Meats, the dominant Swedish meat-producers cooperative sold its slaughtering and processing industry. The goal of a producer cooperative structure is to create value for members through vertical integration, and to strengthen members’ market position. When Swedish Meats sold the slaughtering and processing components, it ceased in some respects to serve the function of a cooperative. This is a lost opportunity for both members and non-members, because Swedish Meats as a functioning cooperative could have exploited its dominant market position to positively effect producer’s prices. Today there is no large cooperative organization in the Swedish Meat industry. The aim of this study is to analyze why Swedish Meats sold its slaughter and processing industry. The methodology of the study includes a literature review and an empirical study. The empirical study contains three interviews with individuals with insight into the Swedish slaughter industry and an accounts analysis based on Swedish Meats’ annual reports. The study reveals that the consequences of the Swedish entry into the European Union came as a shock to the cooperative slaughter industry. The industry had overestimated its market knowledge and the competitiveness of the cost structure. Indeed the industry structure was inefficient and costly. Furthermore, poor communication between management and owners may have precipitated a crisis of confidence among the members and a decline in both membership and slaughter volume. This in turn led to poor capacity utilization. Finally, these issues increased transaction and agency costs preventing Swedish Meats from taking advantage of its market dominance in the Swedish slaughter and processing industry

The effect of education and supervised exercise on physical activity, pain, quality of life and self-efficacy - an intervention study with a reference group

Abstract Background Individuals with knee and hip osteoarthritis (OA) are less physically active than people in general, and many of these individuals have adopted a sedentary lifestyle. In this study we evaluate the outcome of education and supervised exercise on the level of physical activity in individuals with knee or hip OA. We also evaluate the effect on pain, quality of life and self-efficacy. Methods Of the 264 included individuals with knee or hip OA, 195 were allocated to the intervention group. The intervention group received education and supervised exercise that comprised information delivered by a physiotherapist and individually adapted exercises. The reference group consisted of 69 individuals with knee or hip OA awaiting joint replacement and receiving standard care. The primary outcome was physical activity (as measured with an accelerometer). The secondary outcomes were pain (Visual Analog Scale), quality of life (EQ-5D), and self-efficacy (Arthritis Self-Efficacy Scale, pain and other symptoms subscales). Participants in both groups were evaluated at baseline and after 3 months. The intervention group was also evaluated after 12 months. Results No differences were found in the number of minutes spent in sedentary or in physical activity between the intervention and reference groups when comparing the baseline and 3 month follow-up. However, there was a significant difference in mean change (mean diff; 95% CI; significance) between the intervention group and reference group favoring the intervention group with regard to pain (13; 7 to 19; p < 0.001), quality of life (− 0.17; − 0.24 to − 0.10; p < 0.001), self-efficacy/other symptoms (− 5; − 10 to − 0.3; p < 0.04), and self-efficacy/pain (− 7; − 13 to − 2; p < 0.01). Improvements in pain and quality of life in the intervention group persisted at the 12-month follow-up. Conclusions Participation in an education and exercise program following the Swedish BOA program neither decreased the average amount of sedentary time nor increased the level of physical activity. However, participation in such a program resulted in decreased pain, increased quality of life, and increased self-efficacy. Trial registration The trial is registered with ClinicalTrials.gov. Registration number: NCT02022566. Retrospectively registered 12/18/2013