Contractual Relations, Control, and Quality in the Hog Sector

Agricultural production, especially hog production, is undergoing brisk reorganization. Production and marketing contracts are attenuating the control and property rights of growers. In seeking reasons for the restructuring, this paper surveys the opinions of industry participants. It then places these opinions in the context of existing theories on the nature of the firm subject to vertical production/processing interdependencies. Special attention is devoted to contract specifications and their relationships with control and quality.