Projects Funded for Jeffrey Williams
Institutional Choice for Agricultural Producers: Evidence from California.
Specific Objectives of the Project
1. Construct a comprehensive theoretical model of institution choice for agricultural producers, both unconstrained and constrained by institution availability.
2. Design and conduct a survey for two agricultural markets (stone fruits and rice) in California to collect information on cooperative participation, marketing order voting, contracts, and agricultural industry association participation.
3. Estimate an empirical model of institutional choice using these survey data and supplemental publicly available data.
4. Disseminate the results of our analysis to producer groups and government to improve practices and policy related to marketing.
Summary of Results
As agricultural economists, we focus most of our attention in agricultural markets on market interactions, but many institutions and organizations exist within and alongside these markets. We consider how producers utilize these organizations and institutions and what factors contribute to this utilization. Thus far, we have conducted a survey of producers of fresh peaches and nectarines in California. In this survey, we focused primarily on marketing orders but also asked about contracting relationships and association memberships.
In our preliminary analysis, we find that producers with a large volume of stone fruit production, those with a larger percentage of their gross income from farming coming from stone fruit, and producers for whom farming is their sole occupation were less likely to vote for continuation of the marketing order, as were producers with more education (and we would expect, managerial skill). These results matched our predictions. We learned some surprising things about producers who had some organic production or market some of their output through direct sales| these growers were more likely to vote for continuation of the marketing order. This result is counter to anecdotal evidence that growers of organic and local foods are not benefited by marketing orders. We also find that farm income, which we expected to be a significant driver, was not important given our specifications. Neither was years of experience growing peaches and/or nectarines. These results suggest that the reasons producers support or oppose marketing orders may go beyond the most obvious dimensions of producer heterogeneity, such as farm size. Our analysis of these data is ongoing.
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