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A Framework to Facilitate Institutional Arrangements for Smallholder Supply in Developing Countries: An Agribusiness Perspective

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The objective of this article is to contribute to a better understanding of institutional arrangements that can promote stable smallholder agribusiness contracting arrangements in a developing country context. A case study approach, incorporating a transaction cost framework, is used to test whether trust can significantly change the contract characteristics of supply. The results suggest that although trust can influence the contract characteristics of a supply arrangement, it may not be significant because of other factors in a developing country context. Bearing this in mind, a number of institutional arrangements are recommended to promote more stable contract conditions.