A hierarchy model of associative farming

Acceptance of the need for complementary services, when agrarian reform is introduced, such as credit and technical assistance, has led many countries in Latin America to organize land reform projects into collectives or production cooperatives. But the disincentives to effort inherent in group farming have been a continual source of underproduction and disappointment with cooperative farming experiments. The paper suggests an intermediate farming structure currently successful in the Dominican Republic. In the framework of an agency contract, incorporating the hierarchical relations between beneficiary, administrator, and governing agency, the advantages of the associative over either individual or collective farming are illustrated.