Various types of agricultural organizations and institutions have appeared due to severe competition in agricultural markets and changes in consumers' preference for food. Production and marketing contracts , producers' organizations, and collective sales by producers may be good examples. The basic role of agricultural economics is to explain how such things works. In this context, a brief structure of the Transaction Cost Economics (TCE) is reviewed and the potential contributions of the TCE to agricultural economic research is suggested. Although there are some empirical research limitations, the paper argues, TCE would be a good tool for analyzing agricultural contract, agricultural cooperatives and producers' organizations, vertical integration, standardization and grading system of agricultural products, and agribusiness.