The Role of Contracts in the Organic Supply Chain: 2004 and 2007
By Carolyn Dimitri, Lydia Oberholtzer, and Michelle Wittenberger
Economic Information Bulletin No. (EIB-69) 45 pp,
December 2010
Organic food products are excellent candidates for contract production and marketing
because they are produced using a distinct process and are in high demand. This report
summarizes survey data on contracting in the organic sector, addressing the extent of
contracting, the rationale for using contracts, and contract design for select commodities.
The central survey data were collected from certified organic handlers (intermediaries)
in the United States who marketed and procured organic products in 2004 and 2007.
Contracting is widespread in the organic sector, and, in 2007, firms used contracts most
frequently to secure organic products essential to their business and to source products
in short supply. Large firms were more likely to use contracts for procurement, and
these firms contracted for a larger share of their procurement needs. Nearly all contracts
required suppliers to provide evidence of organic certification. Firms using contracts
rarely assisted suppliers with obtaining organic certification or the transition to organic.
Most contracts include provisions regarding quality, and quality verification was an essential
component of these contracts. Prices were determined in a variety of ways and, in
some cases, depended on delivered quality.
Keywords: Organic supply chain, contracts, organic marketing, organic procurement, intermediaries, certified organic handlers, contract design, certified organic, ERS, USDA
In this report ... Chapters are
in Adobe Acrobat PDF format.
Charts and graphs (in .png format) from this report are available in the .zip file listed below. The .zip file also contains a document (readme.txt) that lists the name and title of each chart or graph file.
Updated date: December 13, 2010
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