Applying Transaction Cost Economics: A Note on Biomass Supply Chains

Abstract

Agricultural supply chains, especially those from producer to first handler, are relatively mature institutions. While agricultural economists often observe the evolution of marketing structures in developing nations, it is a rare opportunity to research a developing market within North America. The emerging bioenergy industry—which relies on non-food crops such as straw—provides the potential to research and potentially impact the development of new supply chains. Here, we briefly review the literature related to biomass supply chains, pose a transaction cost approach to studying their development, and then discuss the procurement strategies of an industry leader: the Iogen Corporation.