Contract Farming in the Morocco Cereal Sector: Contract Clauses, Ambiguity, and Opportunism
International Journal of Agricultural Economics
Volume 4, Issue 5, September 2019, Pages: 245-253
Received: Sep. 27, 2019; Accepted: Oct. 15, 2019; Published: Oct. 24, 2019
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Authors
Bouichou El Houssain, Regional Agricultural Research Center, National Institute for Agricultural Research (INRA), Meknes, Morocco; Department of Economic and Social Sciences Applied to Agriculture, Agronomic and Veterinary Institute Hassan II, Rabat, Morocco
Aziz Fadlaoui, Regional Agricultural Research Center, National Institute for Agricultural Research (INRA), Meknes, Morocco
Khalil Allali, Department of Economic and Social Sciences Applied to Agriculture, Agronomic and Veterinary Institute Hassan II, Rabat, Morocco; Department of Rural Economy, National School of Agriculture, Meknes, Morocco
Radouan Arrach, Strategy and Statistics Directorate, Ministry of Agriculture, Fisheries, Rural Development, Water and Forests, Rabat, Morocco
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Abstract
Our main aim was to analyze of the various types of contractual clauses framework of Agricultural Aggregation Projects (AAP) in the cereal sector in Morocco. We used the data from the content of the contracts and by individual interviews with key actors complicated in the process of implementation of the aggregation projects of cereals. The results reveal that only eight Agricultural Aggregation Project, out of 119, received the certificate of aggregation. This is reflecting the fact that, the implementation of this model of vertical coordination was underway. In addition, the analysis of the contract-farming data for clauses has shown us 5 important clauses categories: production (quantity and quality) and payment methods; agricultural extension systems; inputs supply; management of risks; and dispute resolution mechanisms. These findings highlight the value added to the contractual clauses and the need to strengthen the visibility and role of the contract farming as a framework to accompany the investments of ‘‘The Green Morocco Plan’’, in particular with regard to agricultural aggregation projects. We also show that the contract participation reduces the transaction costs in aggregation system, reduction in the number of intermediaries and ensure the link between the producers and markets. The study concludes that, despite enactment of laws on farm aggregation, contract smallholders remain vulnerable to opportunist behavior. It suggests that the contract clauses must be accompanied by commensurate controls and Involving farmers in negotiating contract terms to ensure ‘win-win’ outcomes for Aggregator (AG) and Aggregated (Ag).
Keywords
Cereal Aggregation Project, Transaction Costs, Contractual Clauses, Contract Farming, Vertical Coordination
To cite this article
Bouichou El Houssain, Aziz Fadlaoui, Khalil Allali, Radouan Arrach, Contract Farming in the Morocco Cereal Sector: Contract Clauses, Ambiguity, and Opportunism, International Journal of Agricultural Economics. Vol. 4, No. 5, 2019, pp. 245-253. doi: 10.11648/j.ijae.20190405.17
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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