tailieunhanh - Production sharing rules and optimality of planted shared farming contracts

This article examines the optimality problem in existing "planted-shared" agricultural contracts. We define the optimality properties of a long-term contract when there is no agricultural credit market. We use a dynamic principal-agent model with bilateral engagement. This optimal long-term contract highlights two characteristics: first, the agent's remuneration depends on his productive performance; second, the martingale property of the production sharing index highlights his intertemporal smoothing. | Journal of Agriculture and Environmental Sciences December 2018 Vol. 7 No. 2 pp. 143-155 ISSN 2334-2404 Print 2334-2412 Online Copyright The Author s . All Rights Reserved. Published by American Research Institute for Policy Development DOI URL https Production Sharing Rules and Optimality of Planted-Shared Farming Contracts KOUAKOU Thiédjé Gaudens-Omer1 KAMALAN Angbonon Eugène2 PRAO Yao Séraphin3 Abstract This article examines the optimality problem in existing planted-shared agricultural contracts. We define the optimality properties of a long-term contract when there is no agricultural credit market. We use a dynamic principal-agent model with bilateral engagement. This optimal long-term contract highlights two characteristics first the agent s remuneration depends on his productive performance second the martingale property of the production sharing index highlights his intertemporal smoothing. Moreover we show that such intertemporal smoothing of the sharing index is a necessary and sufficient condition for the optimality of the long-term agricultural contract. Finally among the existing contracts the sharing rules such as the half sharing rate and the third part sharing rate are those that are close to optimal long-term agricultural contracts. Public authorities could promote this type of rules to meet the demand for securing planted-share contracts. Keywords Farm contract Principal-agent model Compensation Production Sharing rule. Classification JEL D81 D82 Q01 Q15. 1. Introduction According to Myrdal 1968 cited by Hayami Ruttan and Malassi 1998 it is in the agricultural sector that the battle for long-term economic development will be won or importance of agriculture in the development of an economy is more evident in most African countries where the agricultural sector accounts for a considerable share of gross domestic product GDP but where agricultural potential remains largely under-exploited. .

• Nông nghiệp
• Journal of agriculture and environmental sciences
• Production sharing rules and optimality
• Planted shared farming contracts
• The martingale property
• Long term contract
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