Contract and Quality in the California Winegrape Industry

Contract and Quality in the California Winegrape Industry

Introduction

An apparent variation in the focus of organizations in agriculture sector of America has led to rise in industrialization. Necessarily, this variation is observed as a shift from homogenous system of commodity to single emphasized differentiation of product. Shift to a higher product differentiation is related to the higher integration vertically that depends on better information. Most of the time in the development of comparison between former agricultural systems with the new one, the literature of industrialization is very comprehensive. The focus of this paper is on the provision of contracts and quality of products in the system of quality differentiated product of the wine grape industry of California.

Discussion

California Winegrape Industry

Strategies driven by quality brands contribute significantly to the evolution of relationships between firms and their suppliers of food agriculture. If the cost reduction remains a business imperative, coordination with upstream becoming more complex, giving way to a set of non-price mechanisms. In U.S. agriculture, contracting upstream/downstream is a practice already former, especially in poultry and some specialty crops, and extends.

Contracts and Product Quality

Contracts are the provision of vehicle for encouraging and monitoring practices of culture. It also provides penalties of bonuses for the attributes of the products. These contracts facilitate control of product. In this report hypothesis are explicitly identified related to the nature of data and variation in this association that is apparently implicit in literature of industrialization. It has been demonstrated through the analysis of data from a survey of winegrape growers of California that these implicit hypothesis most of the time do not hold. Now the explicit analysis of elements underlying the development of agricultural contracts is significant.

Industrialization of Agriculture, Coordination and Information

Differentiated markets require data on characteristics ...