Contract Farming Resource Centre

Contracts, Quality, and Industrialization in Agriculture: Hypotheses and Empirical Analysis of the California Winegrape Industry

Organization University of California, Davis
Year 2000

A perceived change in the organizational focus of American agriculture has given rise to the increased use of the term industrialization. Essentially, this change is viewed as a movement from a homogeneous commodity system to one emphasizing product differentiation (Urban, (1991)). Movement toward increased product differentiation is associated with greater vertical integration which relies on improved information. Often drawing contrasts between the 'old' agriculture and 'new', the industrialization literature is largely descriptive (Drabenstott, 1994; Hurt; Boehlje, 1995; Boehlje, 1996). Rather than developing explicit testable hypotheses, the literature discusses outcomes informally and links them with possible motivating factors using frameworks drawn from economics and management (Barkema, Drabenstott and Cook; Boehlje and Schrader; Sporleder). With the exception of Hennessy, explicit linkages are left undeveloped. In their place are a number of implicit hypotheses regarding the relationships among vertical integration, information and other changes in agriculture.