INSTITUTIONAL ARRANGEMENTS IN THE PROCUREMENT OF LIVE PIGS IN NGHE AN PROVINCE

Abstract

This paper applies Transaction Cost Economics (TCE) to analyze incentive problems and the specific institutions arranged by middlemen to mitigate these problems in collecting the live pigs for provincial and external consumptions in NA. The study shows that there is no specific investment made by either slaughter household (SHH) or pig raiser, the market governance is consistent to the transactions to procure live pigs for provincial market. To procure live pigs for shipment to other provinces and cities, a variety of institutions has established by big collector (BC). The combination of daily live pig transactions and specific investments made by BC and independent collector, the appropriate governance structure is a specific bilateral relationship. BCs daily work with commission collectors as employees and highly control over the transaction, the transaction between BCs and commission collectors is consistent with the unified governance structure. BCs and commission collectors provide pig raisers who possess pig raising experiences, place and time, the industrial feed in advance, the appropriate governance structure in this transaction is a bilateral relationship.