Contractual arrangements in the cattle beef chain: an analysis of trust

Abstract

ABSTRACT: In Brazil, the conflict between cattlemen and the slaughterhouse industry is evident and historic in the beef cattle Agribusiness System, in which opportunistic behavior is commonplace. Accordingly, the role of trust is significant in trade decisions, which makes the analysis of trust in the construction process of governance structure an important factor. The present article aimed to identify the influence of trust in selecting the contractual arrangement in transactions between cattle ranchers and abattoirs. This qualitative and descriptive study used semi-structured interviews, done in loco, along with 30 beef cattle ranchers and five abattoirs in the west of São Paulo State. It was observed that transactions involve opportunistic behavior, and that trust is critical in selecting the contractual arrangement.