Q. Coordination:
The larger role of public corporations in agriculture?
A. Large public corporations don't own
many farms, and they don't account for a large share of
farm production. But they are more actively involved in
making detailed contracts with independent farmers, who
provide them with the specific agricultural commodities
that they want for processing and wholesaling operations.
ERS estimates that contracts now cover 36 percent of agricultural
production, up from 29 percent in 1991 and 11 percent
in 1969. Formal contracts are supplanting cash markets,
in which farmers make marketing decisions (who to sell
to, for how much) after harvest. Contracts have long been
used to govern transactions in fruits and vegetables grown
for processing, and they cover the bulk of poultry production.
They are growing rapidly in hog and fed cattle sales,
as well as tobacco. Cash markets are still the predominant
method of sales in commodity grains, but contracts are
widely used for identity-preserved grains (such as white
corn or high-oil corn).
|
