Partnership or Land Lease Agreement?

Abstract

The relationship between rural producers and sugarcane plants is buoyed by three kinds of agreements: offtake agreement, rural partnership, and land lease agreement. This study focuses on the analyses of land lease and partnership agreements view under the prism of the Transaction Cost Theory. The basic hypothesis is that the transaction costs determine the preference for a certain kind of agreement. For the analyses, confidential data of 1,180 agreements of different plants were used. The results confirm the hypotheses declared.