Transaction Costs in Cassava Production Chain: the Case of Araguaia Valley Region (Goias State, Brazil)
Osmar de Paula Oliveira Junior1, Cleonice Borges de Souza1, Jose Elenilson Cruz1, Alcido Elenor Wander2, Cleyzer Adrian Cunha3
1Federal University of Goias (UFG), Postgraduate Program in Agribusiness, Brazil
The objective of this study was to research the cassava production chain in Araguaia Valley Region (Goias state, Brazil) from the perspective of the Transaction Costs Economics. The Araguaia Valley Region comprises the municipalities of Aruana, Britania, Buriti de Goias, Corrego do Ouro, Fazenda Nova, Itapirapua, Jussara, Matrincha, Montes Claros de Goias, Novo Brasil and Santa Fe de Goias. The region has an area of 18,451 square kilometers and a population of about 72,000 inhabitants (26% living in rural areas). Primary data were collected through field research, using two separate semistructured questionnaires, with open and closed questions. The first questionnaire was used to interview family farmers, and the second one for other regional agents of the cassava production chain. In total 101 questionnaires were filled out. This sample included 73 small cassava producers, 14 local retailers who sell cassava and its derivate products, 13 small cassava processors and one wholesaler. The cassava production chain has strong social and economic importance in the Araguaia Valley Region. Almost all small farmers of the study region cultivate cassava. Cassava is produced for self-consumption and marketing of surplus production. Most of transactions are done on spot market. The main transaction costs are mainly related to high asset specificity, bringing up hierarchical or hybrid governance structures of transactions. 90% of transactions are done in informal spot market transactions, which leads to inefficient management of transaction costs. Agent reputation arises as a mechanism to diminish transaction costs, since transactions occur with high frequency. Uncertainty is mainly related to climatic conditions as well as lack of information on new potential marketing partners.
Keywords: Family farming, governance structures, new institutional economics
Contact Address: Alcido Elenor Wander, Brazilian Agricultural Research Corporation (EMBRAPA), Rodovia GO-462, km 12, 75375-000 Santo Antonio de Goias, Brazil, e-mail: alcido.wanderembrapa.br