Abstract: There are two different modes in the upstream of Porksupply chain: one is through the brokers to transact, and another one is directtransaction. We compare the total transaction costs of the two differentstructures from two perspectives. The one is Williamson transactions athree-dimensional perspective, another perspective is to account thetransaction cost by making model. The result of the comparison show that withthe expansion of the scale of farming, the structure of the upstream of porksupply chain will be changed from the patterns with brokers to the directtransaction mode.

Keywords: Transaction Costs, Pork, the Supply Chain Structure

1 Introduction

Porksupply chain is made up of three nodes: the supplier of boar and baby pork fromthe upstream, pork raisers from the middle stream, and others like butchers,processors and sellers from the downstream. Only a few scholars, at home andabroad, take on research in this supply chain. Including: Lu Fengjun and SunShimin (2003) do research on the organism and activity tactics of the supplychain of high-level pork. Pan and Jean Kinsey（2002）compared the porksupply chain in China and in USA. Most studies put their emphasis on thedownstream of the supply chain and give little attention to the upstream.However the upstream is the origin of the whole supply chain and has very largeresearch value.

Asdispersive peasant-raising mode is the most important mode in the pork raisingstructure of present China, the supplier of boar and baby pork from the upstreamis usually connected with pork raisers from the middle stream through themiddleman—pork brokers. In this situation, the upstream structure of porksupply chain presented in the form of “Supplier of boar /baby pork—porkbrokers—pork raisers”.

As brokersof the upstream pork supply chain, the value of pork brokers also lies on thatthey can reduce the transaction costs between suppliers of boar/baby pork and porkraisers. However, with the scalization in pork raising, do pork brokers stillhave their value? We studied the transformation trend of pork raising structurein Chinaand the following changes of transaction character at first. Then we comparethe transaction costs of the upstream structure of pork supply chain with andwithout pork brokers, just to study whether pork brokers still have their valuein the trend of scalization, namely the transformation trend of upstreamstructure of pork supply chain.