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During the last two decades an increasing amount of large-scale farming operations have emerged all over the world: from (Eastern) Europe, to South America, China and the countries of the Former Soviet Union. These agribusinesses go under the name of mega-farms or agroholdings: horizontally or vertically integrated operations with farm sizes of up to 500,000 hectares and sometimes even more. These types of farms are not only found in crop farming, but also in animal husbandry. Although some information on agroholdings and other forms of mega-farming operations is available, a systematic analysis of their prevalence, economic performance as well as their social and environmental implications in an international perspective is missing. In this special issue of the International Food and Agribusiness Management Review we present a number of papers that highlight the different aspects of such farms. In this editorial we introduce the topic of agroholdings and place the papers in within the context of the available literature. We end with the presentation of a research agenda for the future.

Drawing inspiration from American institutionalism and new institutional economics, this paper discusses the rise of large corporate farms as the transition from the classic capitalist firm to the corporate form of organization based on the separation of ownership and control. Three case studies from the Brazilian cerrado show the rise of large corporate farms to be enabled and impelled by the advance of agricultural production technologies and the search for scale economies. The key finding from the case studies is that complex technology not only necessitates large-scale farming but also generates technical and organizational solutions to the potentially pervasive agency problems. In addition to the use of sound corporate governance practices, these solutions include organizational architecture encompassing computer-aided accounting and budgeting systems, incentive-based compensation, clear definition of performance goals, and delegation of operational decisions to farm managers. Furthermore, organizational architecture has been shown to promote a culture of trust and accountability, which counteract the opportunistic tendencies of farm managers and workers

What are the drivers of grape procurement strategies in U.S. emerging wine regions? Are these choices constrained by the same factors as in established wine areas? This paper uses a mixed-methods approach to discuss the "make-or-buy" decisions of small American wineries from five states: Illinois, Michigan, Missouri, New York and Vermont. Departing from the existing empirical literature on grape procurement strategies in the wine industry, we argue that the study of organizational decisions in American nascent clusters has to consider both their structural characteristics and the features of their participants. Based on semi-structured interviews with Missouri winery owners, we argue that, given the heterogeneity in the bundles of capabilities and resources owned by firms from emerging areas, a rationale exclusively inspired by Oliver Williamson's transaction cost economics is insufficient to explain grape procurement strategies. The evidence presented here is consistent with the view that knowledge plays a decisive role in boundary decisions. Also, the results point out to the importance of informal ties in the governance of the transactions carried out by the wineries in the sample. In special, trust appears to be an essential supporting mechanism in the governance of less coordinated exchanges, reflecting the constraints faced by many firms to devise complex formal arrangements.

Agroholdings are ‘horizontally and vertically integrated agricultural and agribusiness enterprises, which often have an explicit holding structure consisting on quite a number of legal entities’. This might be true in the countries the authors evaluated, but it certainly is not the case in Argentina, where horizontal and vertical coordination (rather than integration) is the norm. During the last 25 years the institutional environment impacted the way farming is organized in Argentina, mainly by using contracts between different players and service providers. The agricultural production sector increasingly shifted from a low to medium and to a large-scale business model, and production units expanded horizontally by means of land leases (coordination) and purchases (integration) in order to increase the scale of production and dilute fixed costs in an attempt to generate higher margins. In that sense this paper arises four questions: (1) why is it that in Argentina large-scale farming is predominantly done via contracts instead of vertical and horizontal integration?; (2) why have large-scale farming networks recently stalled or even declined in terms of area growth?; (3) how and why do these networks vary their scale of production, locations and strategies?; and (4) what can we expect in terms of evolution of different types of large-scale farming? It is observed that in Argentina there were different institutional contexts, sometimes with clearer and more stable conditions and low levels of uncertainty, sometimes with higher intervention policies and transaction costs. The paper discusses how new organizations emerged during different periods and scenarios, in a context of increased international demand for agricultural commodities. The most relevant conclusions drawn from this analysis are that, in Argentina’s agriculture, there is a continuous shift from ownership to management, although consolidation towards larger scale entities has slowed down due to the existence of institutional and policy restrictions.

In this paper we analyze the factors that determine the emergence of new generation cooperatives using the formation and structure of the Danish potato starch cooperative KMC as a historical example. The transaction cost framework has been used in order to analyze how actors chose among different types of governance structures. Theoretical framework and interviews have been combined in exploring and investigating the transactions in different settings. We show in our analysis that the governance structure choice depends heavily on the level and orientation of asset specificity as well as on the downstream market structure. Different problems that occur as a result of transaction costs related to the asset specificity are compared in different settings. Furthermore we claim that the orientation of the asset specificity and the contract-based downstream market have resulted on the emergence of the new generation cooperative.

This invited case study presents the business model and organizational architecture of BrasilAgro - a large-scale, farmland development and farming corporation in Brazil.

A visão predominante na teoria econômica é que organizações de propriedade difusa e complexas apresentam melhor desempenho se forem separados os direitos ao lucro residual das decisões de gestão. Nos países de economia desenvolvida, os modelos de governança corporativa das cooperativas agropecuárias de propriedade difusa e complexas, tal como já informado pela literatura econômica, promovem a desvinculação dos cooperados da gestão da empresa. Em contraposição, no Brasil, embora não haja estudos sistemáticos sobre o tema, evidências pontuais indicam que essas organizações concentram a propriedade e decisões de gestão. A possível divergência entre os modelos de governança utilizados nos diferentes países revela a necessidade de mensuração do grau de separação entre propriedade e decisão de gestão em cooperativas agropecuárias brasileiras, tarefa a que se dedica este artigo. A partir de dados coletados junto a 77 cooperativas agropecuárias, identificou-se que diferentes modelos de governança coexistem no Brasil. Embora grande parcela de cooperativas tenha governança concentrada, há um grupo que já adota modelos de governança que promovem a separação parcial de jure ou de facto entre propriedade e decisão de gestão. Esses resultados revelam a necessidade de pesquisas futuras voltadas a identificar os determinantes da variabilidade de modelos de governança nas cooperativas brasileiras.....Contract and Organizational theories establish that complex organizations with diffuse ownership, such as agriculture cooperatives, should benefit from the separation of ownership and decision control. In developed economies, such as the USA and Canada, these organizations, aligned with the theoretical proposition, adopt governance models that promote the separation of ownership and decision rights. However, in Brazil, despite the lack ofquantitative studies that measure governance separation, anecdotal evidence suggests that ownership and decisions rights are concentrated in Brazilian cooperatives. By means of a survey with 77 Brazilian agricultural cooperatives, this paper measures the degree of de jure and de facto separation of ownership and decision control, providing new evidences on the governance models observed in different countries. Different models coexist in Brazil, i.e., although the majority of agricultural cooperatives concentrate ownership and decision rights, a significant proportion organize themselves consistently with the theoretical proposition, adopting the American models of agricultural cooperatives. Further research is required in order to address the determinants of the variety of governance models in Brazil.

The International Food and Agribusiness Management Review is published quarterly by IFAMA. www.ifama.org

Teaching Notes Available: ifamr@ifama.org Author video introduction: http://www.youtube.com/user/ifamr1#p/u/7/4kZDvS7v5NA

Amongst the greatest milk producers all over the world, Brazil stands out due to the low participation of dairy cooperatives in milk handling and commercialization. Several factors may be identified to explain cross-country differences regarding to dairy cooperative market share. This paper discusses aspects related to the organizational structure and strategic behavior of dairy cooperatives in response to the globalization process. Based on research projects, case studies, and interviews with industry leaders, the study analyzes common features of dairy cooperatives in the United States, Western Europe and Oceania, which grew and prospered under intense competitive pressures from multinational companies. Some necessary conditions for the strengthening the Brazilian dairy cooperative system are discussed, including: consolidation by means of mergers and acquisitions, strategic alliance and network formation, adoption of professional and representative governance systems, centralized structure (replacing the singular central model), efforts to enhance membership commitment, new capitalization models, and competitive strategy aligned with the cooperative structure.

Change in trade barriers and capital flow creates opportunities for redesigning the food chain. The orange juice chain in U.S. and Brazil provides an interesting illustration of how institutional harmonization, high import tariff rates and complementary capabilities open new opportunities for strategic alliances and the re-arrangement in the FCOJ chain. This finding has the following implications. First, trade barriers are not enough to support FDI and related internationalization decisions. Second, the perspective of market integration creates a positive environment for new strategic alliances and the re-design of the food chain. And third, the existence of complementary capabilities between foreign and domestic companies is a necessary condition for this type of supply chain re-arrangement.

This study analyzes vertical-coordination practices in the U.S. beef supply chain focusing on strategic alliances. We present results from a survey of beef alliances describing their organizational structure, the nature of participants' involvement, contractual requirements, information-sharing practices, services offered to alliance participants, and marketing strategies. Survey results provide a detailed description of 13 beef alliances and are intended to inform potential participants about vertical-coordination alternatives. In addition, the study provides relevant information for future economic research on the formation, organization, and functioning of beef alliances.