Analizing Changes in Contractual Practices in the Louisiana Nursery

The flow of nursery products through the different market channels has changed over the past decade. As mass-merchandisers market share increased, buyers of nursery product imposed conditions on nursery growers in terms of their business practices as well as the presentation of the product itself. This study analyzed changes in contractual terms between buyer and sellers for two market channels; mass-merchandisers and garden centers. The items evaluated were that product information tags be applied, barcode stickers be applied, special containers be used, transportation to retailer be paid by the seller, returnable shipping equipment be supplied by the grower, on-time delivery be guaranteed by the grower, unsold merchandise be taken back by the grower, some minimum volume be supplied by the grower, and continuous inventory replenishment be used. Data were collected via mail using the Ornamental Horticulture Producer Survey, and non-respondents were contacted by telephone or additional mailings of the questionnaire. The resulting data were compiled and tabulated for the statistical analysis. A McNemars test was conducted to evaluate whether proportions of items required by the buyer to be included in the terms of a contract had changed from 1996 to 2001 within the two market channels. A model was designed for each of the aforementioned nine items to determine which business characteristics of the grower were associated with him/her accepting the terms imposed by the buyer, by market channel. Analysis of the dataset indicated that, over the time period of the study, more items were included in the terms of contract in 2001 than in 1996. New practices in the nursery industry appear to be led by mass-merchandisers, while the garden center channel follow suit. The level of technology, specifically Internet use, was found to be closely related to the inclusion or exclusion of items in the terms of contracting.