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Contract design for small scale mussel growers in Saldanha Bay : a transaction cost approach

Thesis (MScAgric)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: This study examines the role of contracting in reducing transaction costs in smalIscale
mussel farming in Saldanha Bay. Masiza Mussel Growers (Masiza), an initiative
by the public and private sector to address the imbalances of the past through
entrepreneurial development, are used as a case study hence a case study approach is
followed. Two transactions were considered, one between Masiza and Blue Bay Aqua
Farm (Blue Bay) and another between La Vie Sea Food Products (La Vie) and
Masiza. These transactions form the basis for analysis.
Market risks, uncertainties, environmental risks, information incompleteness,
illiteracy, limited technical knowledge of farming, lack of appropriate infrastructure
and lack of transport facilities are identified and examined as possible sources of
transaction costs that constrain the existing supply chain relationship. The study
shows that asset specificity, time specificity, and site specificity playa positive role in
the supply chain as they result in relative dependency amongst parties. Opportunistic
behavior within the existing supply chain is neutral, but appears to be relatively high
on the spot or fresh live market. Characteristics of market transactions for mussels and
associated transaction costs suggest that fresh-live spot market trading for Masiza is
difficult to attain. This therefore motivates parties (Masiza) to contract or vertically
integrate, as it is costly and risky to rely on spot live markets. Interviewees (Masiza)
pointed out that the benefits associated with contract farming outweigh the transaction
costs associated with this governance structure. Hence a market specification contract
with the La Vie (a processing company), and a production management and resource
provision contract with Blue Bay (a larger producer) were designed. They reduce
transaction costs associated with fresh-live markets and ensure a more stable and
reliable market for growers. / AFRIKAANSE OPSOMMING: Die studie ondersoek die rol van kontraktering in die vermindering van transaksie
koste vir klein skaal mossel produsente in Saldanha baai. Die Masiza Mussel Growers
(Masiza) word as gevallestudie gebruik. Twee transaksies met o.a. Blue bay Aqua
Farm (Blue Bay) en La Vie Sea Food Products (La Vie) was ter sprake en
laasgenoemde het as basis vir die analise gedien.
Mark risiko, onsekerheid, omgewings risiko, gebrekkige informasie, ongeletterdheid,
beperkte tegniese kennis, beperkte infrastruktuur en beperkte verroer fasiliteite is
geidentifiseer en ondersoek as moontlike oorsake van hoƫ transaksie koste wat die
huidige aanbod ketting strem. Die studie toon aan dat interafhanklikheid tussen die
betrokke partye deur bate, tyd en area spesifisiteite bevorder word en dus 'n positiewe
rol in die aanbod ketting speel. Opportunistiese gedrag binne die bestaande aanbod
ketting is neutraal, maar blyk hoog te wees in die vars mark. Transaksie kostes en
eienskappe blyk beduidende beperkinge te wees vir kleinskaal mossel produsente om
aktief deel te neem in die mark. Die opstel van kontrakte (of vertikale integrasie) blyk
dus 'n uitkoms te wees. Respondente het aangetoon dat kontrak boerdery voordelig
blyk te wees. Laasgoemde het tot die ontwikkeling van mark kontrakte met die La
Vie ('n verwerkings maatskappy) asook produksie bestuur en hulpbron voorsiennings
kontrakte met Blue Bay ('n groot kommersiƫle produsent) gelei. Die kontrakte beperk
transaksie koste vir die vars mark en verseker 'n stabiele en betroubare mark vir
produsente. 'n Transaksie koste analiese word gebruik om transaksie kostes te
ondersoek en te verifieer binne die industrie.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/50302
Date12 1900
CreatorsDiza, Sakhumzi Jacob
ContributorsKaraan, A. S. M, Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageEnglish
TypeThesis
Format95 p. : ill.
RightsStellenbosch University

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