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Abstract
The paper investigates the significance of external and internal transaction costs and risk in
agriculture in the Tatarstan Republic. The analysis is conducted for independent farms and
farms which are members of agroholdings. The result indicates that external transaction costs
are more marked in independent farms than in agroholding members. However, average prices
do not differ among the organisational forms. With regard to internal transaction costs (or
inefficiency) the result is the opposite. Inefficiency in agroholding members is considerably
higher than in independent farms. However, the estimation suggests that this result is due to
more intense risk management in agroholding members. Thus, members of a business group
have a more intense use of inputs; however, these are rather allocated to reduce uncertainty of
production than to increase production.