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With recent shifts in market forces driven by food safety and quality concerns, managers in the Brazilian beef processing industry are forced to reevaluate their procurement arrangements with cattle producers. The purpose of this paper is to provide insight on the effect of live-weight (LW) and dead-weight (DW) procurement arrangements on farmers’ incentives to invest in cattle quality.

The research methods involve a conceptual model based on principal-agent framework and data from targeted interviews of cattle farmers and slaughterhouse managers in the Western Region of São Paulo state of Brazil.

Findings highlight the potential for adverse selection of low-quality cattle producers under LW arrangement and misaligned incentives for quality improvement, they also illustrate incentive compatibility of DW arrangement when the carcass yield is verifiable by producers. The evidence from field data was largely consistent with the predictions of the model and highlighted the important role of trust for a lasting procurement relationship under DW arrangement.

Due to the lack of publicly available data and the challenges associated with the collection of primary field data, the sample is limited to 30 cattle producers and 5 processing firms.

This paper provides a theoretical and empirical platform for developing further research on coordination at the producer–processor interface of beef supply chain in Brazil and other countries with similar transaction characteristics. The findings will assist in designing more incentive compatible and self-enforcing arrangements between cattle farmers and slaughterhouses to enhance the product quality and the overall efficiency of the supply chain.

Armenia’s 1991 privatization and land redistribution process handed ownership and control of agricultural production to over 300,000 inexperienced, financially distressed, subsistence farmers operating extremely small fragmented plots, and the processing sector to similarly distressed managers. As seen elsewhere across Eastern Europe, the result was chaotic turmoil characterized by pervasive delayed payments, massive disinvestment, and rapid output declines. However, unlike elsewhere, Armenia could not rely upon the entry of FDI to correct channel incentives and revitalize its agricultural and rural financial markets. Instead, an alternative exogenous stimulus was required. This study analyzes the instrumental case of how a quasi‐public third party, the USDA Market Assistance Program and Agricultural Production Credit Clubs, successfully imitated FDI‐induced incentive structures through market linkages, social capital, and microcredit to establish economically sustainable marketing channels. The findings provide important insights into the design of market‐linked microcredit programs.

The purpose of this paper is to assess the role of a third-party market facilitation strategy in creating sustainable market linkages and revitalizing an important agri-food sector in a developing country setting. More specifically, this study evaluates a third-party facilitator’s ability to assist producers and processors in developing internal private enforcement mechanisms through stimulating investments in relationship-specific assets.

This paper uses mixed methods approach. The research is grounded by a case study of the USDA Marketing Assistance Program (MAP) in the Armenian dairy industry. Qualitative evidence from the case study is combined with data from a survey of 745 Armenian dairy farmers to examine the impact of participation in the USDA MAP-facilitated marketing channel on farm-level investments.

The main results indicate that over the four-year period of the USDA MAP facilitation of dairy supply chain, farms linked to the formal milk marketing channel have invested in approximately twice as many assets specific to milk production compared to farms in the informal channel. This finding supports the hypothesis that third-party market facilitation strategy pursued by the USDA MAP has stimulated investments in private enforcement capital between dairy producers and processors and implies that an external third-party market facilitator can play an important role in enhancing performance of supply chain linkages.

These findings and the lessons from the case of USDA MAP contribute to better understanding of third-party market linkage facilitation strategies and will be useful for the development community and agribusiness decision makers.

We are grateful for the privilege of editing this book and organizing the conference that it celebrates. We thank our universities, departments, and organizations for their generous support, the many people who helped organize the conference, and the reviewers acknowledged below. Most of all, we thank our presenters, participants, and authors for their interest and energy.