We utilize an unusual data set, involving fifteen tomato growers over four years, to analyze the impact of incentive contracts on behavior. Each grower delivers processing tomatoes under a price incentives contract and for a fixed price per ton. Our comparison of the quality of the tomatoes delivered under the two arrangements confirms that growers do respond to incentive contracts by improving tomato quality, as predicted by economic theory. The comparison is not confounded by the usual contract endogeneity and simultaneity problems, due to characteristics of the processing tomato industry and our data set.

We examine the determinants of the adoption of genetically modified (GM) corn and soybean varieties by Iowa producers using data collected from a survey of producers. The representative respondent increased or held constant his GM soybean acreage but decreased his GM corn acreage. Agreement with the statement that consumers will not accept some bioengineered foods was associated with a significant decline in the intended share of acreage devoted to GM corn but had no explanatory power for GM soybean planting intentions. Risk attitudes did not prove to be a significant explanatory factor, perhaps due to the existence of production risk and price risk, which may have offset each other in the acreage allocation decision. Other significant factors included gross farm income, the previous year’s acreage allocation, agreement with the statement that farmers will benefit from biotechnology, years of schooling (soybeans only), total corn acreage (corn only), and concern regarding European corn borer yield damage (corn only). An increase in gross farm income was associated with an increase in the share of GM acreage for both crops. The previous year’s GM acreage share for that crop was highly significant.