[Author: Karaan, M]
This study examines transaction costs faced by small mussel and oyster growers to elicit the appropriate organisational design of contract institutions. The theoretical premise is that high transaction costs essentially constrain the participation of small growers in mussel and oyster mariculture. Transaction cost analysis is applied to contract farming models and this approach is first discussed conceptually. Experience with contract farming by small growers in a developing context is synthesised and used in guiding the design of contract farming models. This is followed by a brief overview of the mussel and oyster industries, which is used to gain insight into transaction costs associated with contract institutions. Contracting models and implications are assessed separately for each industry. For mussel mariculture, four farming models are examined and the appropriate model is subsequently selected. For oyster mariculture, the transaction costs of contract fanning are examined to assist in organisational design.
