No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Does Agribusiness Cluster Improve Soybean Smallholder Farmers’ Participation in Contract Farming? Evidence from Benin
... The factors in the first category included residing in a cluster village (CLUSVI), membership in a cluster (CLUSTER), producer's gender (GENDER), education (EDUCP), membership in a peasant cooperative (MCOOP), training of the farmer in soybean production techniques (TRNSOY), participation in CF negotiation meetings (PATCAG), contact with extension agents (CEXTEN), and share of soybean income in household income (REVSOY). Indeed, various authors (Hoang and Nguyen, 2023;Awode and Sodjinou, 2023;Assouma et al., 2023;Issahou, 2024) have shown that clusters, level of education, membership in a cooperative, awareness and income from soybeans tend to improve the propensity of producers adoption of CF. ...
... This could be explained by the fact that approaches based on peasant groups, such as the ABC, improve communication between actors, which, in turn, promotes trust. Our finding is in line with Issahou (2024), who argues that ABC improves knowledge of the content of contracts, attitudes, and the level of trust between stakeholders. According to Khalili et al. (2024), this trust exerts a significant influence on farmers' willingness to participate and the extent of their participation in CF. ...
The study examined contract farming participation intensity determinants among small-scale malt barley farmers in the Arsi Highlands, Oromia Region, Ethiopia. Data was gathered from 384 sample respondents using a multistage sampling procedure. Age, livestock ownership, crop output, price, advice service, cooperative membership, and credit were found to be major determinants of probability of contract farming participation. However, total land size and farming experience negatively determined the likelihood of participation in contract farming. The contract participation intensity was defined by educational level, landholding size, production selling price, amount of fertilizer applied, and off-farm income. It is discovered that smallholder producers of malt barley are increasingly drawn to contract farming. It is anticipated that the trend will continue, bringing about more awareness of the advantages of contract farming as well as better access to and utilization of agricultural input supplies.
Agricultural endeavors, especially in developing nations, entail inherent risks. Amidst challenges related to capital and agricultural marketing, contract farming emerges as a highly effective strategy. It not only facilitates capital accumulation but also ensures consistent product sales, establishes fair pricing, and contributes to the overall balanced development of the agricultural sector. This concern has been a longstanding global consideration, with Iran now addressing it. Recognizing the paramount importance of implementing contemporary agricultural methodologies, including contract farming, this research systematically investigates factors influencing farmers’ intentions in Iran. A survey methodology is employed for systematic information collection from a statistical population of 98,777 farmers in rural Markazi Province, Iran. Using the Karjesi and Morgan table for sample size determination, a representative subset of 383 farmers is selected through stratified random sampling, ensuring proportional assignment within strata. A researcher-made questionnaire, validated by expert panels and confirmed for reliability through Cronbach’s alpha coefficient, serves as the research instrument. Data analysis was conducted using SPSS 27, and structural equation modeling was performed with SmartPLS4. The findings reveal that trust (0.528), awareness (0.332), and attitude (0.168), exert the most substantial causal influence on farmers’ intention to embrace contract farming. Consequently, the research findings offer practical recommendations for the adoption of contract farming, providing valuable insights to policymakers and stakeholders for implementing targeted interventions aimed at boosting farmers’ willingness to participate in contractual agreements.
In most developing countries, village poultry are raised in a scavenging system which gives the impression that all the birds in the village belong to the same flock. Therefore, actions targeting the entire community (Community-Based Management, CBM) could better contribute to improving the productivity of village poultry, notably through the adoption of technologies similar to those used in intensive poultry. The objective of this paper was to assess the effect of CBM, as well as the socioeconomic and institutional factors, on the adoption of village poultry improvement technologies. This was addressed using a logit model and data collected on 405 village poultry-keepers in Benin. Results indicate that the adoption of village poultry technologies depends on the availability of village poultry vaccinators (VPVs) and breeders’ experience (education level and participation in CBM). Farmers from experimental villages are also more willing to adopt various technologies. This indicates that when farmers have the information and technical support through an approach based on the community, i.e. CBM, they can change their behavior, overcome traditional ways of poultry farming. Furthermore, the adoption of the technologies is successful when the strategies used are based on the involvement of private veterinarians for the supply of VPVs.
Understanding how and the extent to which contract farming arrangements impact agricultural productivity is important to ensuring that policies are designed to maximize the likelihood of success. Using cross-sectional data from 516 soybean farmers in Northern Ghana, we provide empirical evidence that contract farming increases soybean productivity and technical efficiency in Northern Ghana. We use propensity score matching to reduce bias from observables, and then estimate a stochastic production frontier model that addresses selection bias arising from unobservable variables. We find that the technical efficiency levels of contract farmers are 77 percent compared with 69 percent for non-contract farmers. We also find that access to credit, extension contact, and farmer group membership are key determinants of participating in contract farming.
Governments and development agencies increasingly promote agro‐clusters as a pathway to improving smallholder incomes and ensuring inclusive rural development through mitigating production and market risks. However, there is very limited empirical evidence to support this promise. We use a large farm household survey of about 4000 smallholder farmers in Ethiopia growing cereals like teff, maize, wheat, maltbarley and sesame to examine the relationship between agro‐clusters and smallholder welfare and poverty. Using instrumental variable estimators, we establish a positive association between agro‐clusters, household income and per capita income. Agro‐clusters are also shown to reduce poverty and poverty gaps. Our results are robust over different agro‐cluster proxies and alternative estimators, such as the augmented inverse probability weighting estimator. We also show that our findings are unlikely to be driven by omitted variable bias. Moving beyond average effects and in the interest of understanding heterogeneous effects, we use quantile regressions at different income levels. We find that agro‐clusters are associated with welfare gains for all households. However, the most significant gains are observed for the wealthier households. Despite this regressive association, our findings suggest that agro‐clusters may be useful in making farming more profitable with significant welfare implications.
Background. Smallholder farmer's market participation, through contract farming arrangements has been receiving much attention in sub-Saharan Africa, as a measure towards increasing commercialization and specialization in essential crops value chains. Material and methods. Using a sample of 361 randomly sampled maize farmers, the study identified factors influencing smallholder maize farmer's decision and extent of participation in contract farming in northwestern Nigeria. Descriptive statistics and Craggs double hurdle model were used for data analysis. Results. Maize farmers (51.8%) were found to be participating in the contract farming (CF); An average age of maize farmers involved in contract farming is 39 years; with over 20 years of farming experience and an average farm size of 2.46 hectares. On the other hand, those not involved in contract farming have an average age of 37 years, 18 years farming experience and an average farm size of about 2.16 hectares. Furthermore, the number of years of contract farming awareness, access to credit, extension services, and agricultural training had positive and significant (p < 0.0.5) effect on maize farmers' decision to participate in contract farming. The significant factors (p < 0.01) influencing the extent of contract farming participation are; farm size, farming experience, access to credit, duration of contract agreement, contract farming experience, and side-selling. Conclusion. Inadequate requisite land, lower prices offered by firms and untimely distribution of inputs were identified as major constraints affecting smallholder maize farmers participation in CF. Therefore, taking proactive measures regarding these factors such as creating more CF awareness through extension workers by relevant investors and agencies will promote contract farming participation among smallholder farmers.
Contract farming has gained in importance in many developing countries. Previous studies analysed effects of contracts on smallholder farmers’ welfare, yet mostly without considering that different types of contractual relationships exist. Here, we examine associations between contract farming and farm household income in the oil palm sector of Ghana, explicitly differentiating between two types of contracts, namely simple marketing contracts and more comprehensive resource-providing contracts. Moreover, we look at different income sources to better understand how both contracts are linked to farmers’ livelihood strategies. We use cross-sectional survey data and regression models. Issues of endogeneity are addressed through measuring farmers' willingness-to-participate in contracts and using this indicator as an additional covariate. Farmers with both types of contracts have significantly higher household incomes than farmers without a contract, yet with notable differences in terms of the income sources. Farmers with a marketing contract allocate more household labour to off-farm activities and thus have higher off-farm income. In contrast, farmers with a resource-providing contract have larger oil palm plantations and thus higher farm incomes. The findings suggest that the two contract types are associated with different livelihood strategies and that disaggregated analysis of different income sources is important to better understand possible underlying mechanisms.
Contract farming has been shown to increase agricultural productivity and thus welfare of farmers in developing countries. However, studies that look at the potential environmental effects of contract farming remain quite scanty. This is however crucial, since contract farming may contribute to intensification in cultivation of the contracted crops, in terms of area and the intensity of inputs used. This study investigates the impact of participation in contract farming on sustainable farm practices, using a marginal treatment effects (MTEs) approach to account for potential selection bias and heterogeneity across households. The empirical results show significant heterogeneity in the effects of contract farming on the intensity of sustainable farm practice use. In particular, farmers with high propensity to participate in contract farming tend to have low probabilities of using sustainable farm practices. The findings of this study not only provide new insights into the heterogeneous effects of contract farming, but also entry points for further research to address the dual challenge of agriculture to produce sufficient food, while reducing the adverse impact on the environment.
Access to credit is a key prerequisite for the development of smallholder agriculture. However, rural credit markets are typically characterized by market failures and smallholder credit access is limited. Resource‐providing contracts are an institutional tool to overcome credit market failures through the provision of production inputs in the form of in‐kind credit. Previous research has shown that interlinkage of contract and credit helps farmers overcome financial constraints, foster production investments, and hence increase productivities and income. However, if and how such contract schemes affect farmers' overall demand for and access to formal credit from other sources is not yet well understood. In this article, we therefore investigate the associations of the provision of in‐kind credit and farming households' formal credit demand and ability to receive formal credit. We use data of 463 oil palm producers in Ghana and show that participation in contract farming is associated with an increase in credit demand. Concerning credit approval, we find that the outstanding debt of the in‐kind credit scheme is associated with a substantially lower likelihood of credit acceptance. However, the results also suggest that farmers can fully compensate this negative effect by informing the bank about the contract, and thus the source of the debt. This indicates that debt acquired from resource‐providing contract schemes does not necessarily pose an additional credit constraint to farmers. [EconLit Citation G21, G23, O16, O17].
The purpose of the article is to identify additional opportunities for using agricultural clusters to stimulate the socio-economic development of agricultural territories and diagnose the constraining problems of modern clustering policy using the example of the Rostov region. The use of the cluster methodology made it possible to rethink the toolkit of the regional policy, considering not individual enterprises as an object of regulation, but integrated structures that can become regional “growth areas”. The article describes some interesting findings. First, the cluster strategy made it possible to ensure sustainable growth rates of individual regions, which became the driver of the development of the leading world powers. Secondly, the Russian experience of cluster development made it possible to identify the competitive advantages and internal regional resources for development, increasing the competitiveness of the cluster structure partners. Increasing the competitiveness of business is of particular importance for the agro-oriented regions of Russia, since the agricultural sector is subject to greater natural risks. Thirdly, the positive impact of agricultural clusters on the socio-economic development of the Rostov region, including that over the Covid-19 pandemic period, is highlighted. Fourth, constraints have been identified that reduce the effectiveness of the cluster policy.
The focus of this paper was on the determinants of contract farming adoption and its impact on productivity to smallholder cotton producers in Bunda District, Tanzania. A survey of 220 contract farmers and 194 non-contract farmers was done by the researcher through personally administered questionnaires. Results from the treatment effects model show that gender of household head, household head age, experience in cotton cultivation, obtaining loan from other sources, being wage-earner, owning cattle, and owning bicycle had influence on adopting contract farming. However,
education of household head, household size, off farm activities, owning motorcycle and radio had no influence on adopting contract farming. With regard to impact of contract farming adoption to productivity of smallholder cotton farmers in the investigation
region, findings show that there is insignificant impact due to late supply of inputs to farmers by ginners, sprayers were not given on loan basis to farmers for spraying their farms in order to control pests and cultivation service was provided at TShs. 30,000/= upfront which was not afforded by farmers. In this case, Tanzania Cotton Board (TCB)
should launch major campaign to educate farmers and ginners on the advantages of contract farming, secondly, ginners should be instructed to supply inputs (cotton seed and pesticides) to farmers timely and lastly ginners should provide sprayers and cultivation services to farmers as agreed when signing contract. Otherwise, contract farming adoption for the purpose of increasing productivity will be a nightmare.
This paper is aimed at evaluating the factors affecting the concurrent adoption of two risk coping strategies among hybrid maize farmers, namely income diversification supplemented with off-farm work and contract farming in the wake of changing climatic conditions. Climatic changes and food insecurity at the national level have emerged as key risk elements for hybrid maize production due to varying economic conditions. The present paper addresses these risks by examining various sources of risks faced by hybrid maize farmers and develops ideas to tackle these risks. Bivariate and multinomial probit models were employed to analyze numerous factors that influence farmers’ choice of the simultaneous adoption of income diversification (both on and off the farm) and contract farming at the farm level. The results reveal that hybrid maize farmers’ socioeconomic attributes significantly affect their adoption of risk coping tools. Similarly, the climatic, economic (price-related), biological, and financial risk perceptions and risk preference significantly influence the utilization of risk coping strategies in maize production. These outcomes extend our understanding of farmers’ risk preferences and provide parameters for policymakers to forestall diverse risk sources associated with hybrid maize production.
Du fait de son rôle dans l’obtention de revenus pour les paysans et de devises pour le pays, l’anacarde est une culture d’un fort intérêt économique et stratégique au Bénin. Sa commercialisation est cependant soumise à de nombreuses contraintes, dont les coûts de transaction qui font l’objet de la présente étude. En se basant sur un échantillon aléatoire de 122 producteurs choisis au nord-ouest du Bénin et en utilisant l’approche des coûts d’opportunité, l’efficacité transactionnelle des deux modes de commercialisation (individuelle et groupée) a été analysée. Il ressort des résultats que les producteurs supportent des coûts de transaction de 93 F CFA/kg dans le mode de vente individuelle contre seulement 43 F CFA/kg dans la vente groupée (1 € = 656 F CFA). Dans les deux modes, la composante majeure est constituée par les coûts de transaction ex ante (98 %) contre seulement 2 % pour les coûts ex post . Si les résultats montrent que la vente groupée a un avantage comparatif en termes de réduction des coûts de transaction, ce mode peine cependant à se développer et le mode individuel reste toujours dominant (62 %). Ce résultat ne corrobore pas l’idée généralement admise de préférence des acteurs pour le mode de coordination minimisant les coûts de transaction dans un processus d’échange. Il suggère la nécessité d’approfondir l’analyse de l’efficacité transactionnelle, en incluant l’analyse de la perception des producteurs sur le fonctionnement de chaque mode de commercialisation et sur l’importance des coûts de transaction liés à chacun.
Marketing cooperatives are gaining popularity in the supply chain management of fruits and vegetables (F&V) due to consumers’ increasing desire to purchase cooperative products as well as producers’ willingness to reinforce their bargaining power in the market. The main purpose of this empirical study is to investigate the most important factors that motivate Greek producers to participate in marketing cooperatives, as well as those motives that discourage them. The prefecture of Imathia, in the northern part of Greece, was chosen because it is characterized by a high involvement of cooperatives, wholesalers and retailers in F&V trading. A structured questionnaire was answered by 61 producers of Imathia in 2020. The results indicate that producers recognize that they ensure safer financial transactions and direct distribution of their fresh agricultural produce via marketing cooperatives. Moreover, the study showed that there is a statistically significant difference in the motives of participation in a marketing cooperative that has bargaining power and direct distribution of fresh agricultural produce between the three categories of education level. However, producers appeared to agree that (1) the great divergence in members’ reasons for participation in a marketing cooperative and (2) the inability to take collective decisions by the general assembly are the most important disincentives for participation in marketing cooperatives.
One way of fostering smallholder farmers’ agricultural productivity is through encouraging agricultural technology adoptions. However, agricultural technology adoption remains very low in Ethiopia. As a consequence, many studies have been researched why agricultural technology adoption remained low. Nonetheless, a handful information is available on aggregate factors influencing agricultural technology adoption in Ethiopia. Therefore, very little is known about the common factors affecting agricultural technology adoption in Ethiopia. Hence, this meta-analysis was aimed to quantify the determinants of agricultural technology adoption from adoption literature. Based on a comprehensive and systematic search strategy, and inclusion and exclusion criterion, 12 studies conducted between 2010 and 2018 were included in this meta-analysis. Random effect model was used to identify the determinants of agricultural technology adoption in Ethiopia. Results of random effect model confirmed that age of the household head, education level, farm size, livestock holding, access to extension services, access to credit services, cooperative membership and distance from the market were significantly associated with agricultural technology adoption. Therefore, policy makers and other stakeholders should focus on common variables found to affect agricultural technology adoption in designing policies that encourage agricultural technology adoption in Ethiopia.
Contract farming is a form of vertical coordination, largely aimed at correcting market failures associated with spot markets that arise due to imperfect information. The objective of this study was to assess the determinants of farmer engagement in sunflower (Helianthus annus L.) contracts in northern Uganda. Stratified random sampling was used to select 150 contracted and 150 non-contracted sunflower farmers in Oyam District, from where primary data were collected using a semi-structured questionnaire. A Logistic regression model was used to examine the factors that influenced farmer participation in contract farming. The major determinants of participation in contract farming by smallholder farmers were age (P<0.1), sunflower production experience (P<0.01), access to credit (P<0.01) and unit produce price (P<0.01).Collaborative efforts by all parties engaged in contracting arrangements are necessary to negotiate a minimum price with the farmers, with a possibility to re-negotiate whenever the market price is above the set price. The study pointed out that improvement in rural roads to enhance transportation of produce to mini-store is vital in driving sunflower contract farming in Oyam district. Therefore, policies aimed at improving rural roads are urgently needed.
Access to agricultural services promotes agricultural production and livelihoods of smallholders in most developing countries. This study explores the factors affecting smallholders' access to agricultural services in northern Ghana. The study relied on survey data for the analysis. We estimated a multivariate probit model to assess the factors influencing access to agricultural services and a generalized Poisson regression model to evaluate the factors affecting the degree of access to these services. The results indicated that farmers had varying degree of access to different agricultural services. The most accessed service was agricultural extension (63% access) while the least was farm credit (40% access). Access to services and the degree of access (number of services accessed) were both influenced by household size, farming experience, household income, farmer group membership, and geographical location. In addition, the number of services accessed by farmers was influenced by participation in off-farm work. The paper proposed measures to enhance smallholders' access to agricultural services to promote agricultural production, food security and rural livelihoods.
Le présent article vise à déterminer les facteurs qui influencent l’adoption de la contractualisation par les acteurs de la chaîne de valeur du riz étuvé au Nord-Ouest du Bénin. Les données ont été collectées auprès de 320 acteurs de chaîne de valeur du riz étuvé. Ces acteurs ont été sélectionnés de façon raisonnée et aléatoire en s’appuyant sur les expériences de la CARP 1 , la vente groupée du riz paddy et du cluster Sourou Bayayé. Le modèle logistique logit binaire a été utilisé pour identifier les facteurs déterminant l’adoption de la contractualisation par les acteurs de la chaîne de valeur du riz étuvé. Les résultats de cette recherche montrent que l’adoption de la contractualisation est influencée par les zones géographiques, l’appartenance à un groupement, l’accès au conseil agricole et la participation aux réunions sur la contractualisation chez les producteurs. Du côté des transformatrices, nous pouvons citer, la participation aux réunions sur la contractualisation. Enfin, au niveau des commerçants, la participation des commerçants aux réunions de négociation, la disponibilité du riz étuvé en toutes saisons, l’accès au riz de bonne qualité et l’existence de conflits inter-acteurs sont des facteurs qui influencent l’adoption de cette innovation. Ces résultats suggèrent donc aux projets et structures engagés dans la promotion desfilières, de mettre un accen particulier sur la contractualisation comme base de développement des clusters agricoles. This paper focuses on determining the factors that influence adoption of contractualization by actors in steamed rice value chain in north-west Benin. Data were collected from 320 actors selected randomly and reasoned based on CARP experiences, the group sale of paddy rice and of the Sourou Bayayé cluster. The logit binary logistic model was used to identify the factors that determine the adoption of contractualization by the actors. The results show that the adoption of contractualization is influenced by geographic areas, membership of a group, access to agricultural advice, and participation in meetings on contractualization among producers. On the transformative side, among other determinants of adoption, we can cite participation in meetings on contractualization. Finally, at the merchant level, the participation of tradersin negotiation meetings, the availability of parboiled rice in all seasons, accessto good quality rice, and the existence of inter-actor conflicts are factors that influence the adoption of this innovation. These results, therefore, suggest that projects and structures engaged in the promotion of the sectors should put a particular emphasis on contractualization as a basis for the development of agricultural clusters.
Soybean has been the world's fastest growing crop over the last 15 years. Yet, as an untraditional and unfamiliar crop, soybean requires small farmers to move beyond their traditional production practices and marketing arrangements in order to produce a successful crop. We employ complexity theory to frame soybean's production and market differences as significant and non-incremental for smallholder farmers, thus making soybean a 'long-jump' agricultural technology problem. We consider three estimation strategies using a primary dataset of smallholder women soybean producers in the Upper West region of Ghana. We first employ probit and ordinary least squares (OLS) regression models to understand adoption and performance. We then employ a combined spatial-autoregressive with spatial-autoregressive disturbances (SARAR) model using generalised spatial two-stage least squares to understand cross-unit interactions in a spatial dimension. We find positive, large and significant spatial autoregressive dependence and knowledge spillover to affect the soybean yields of smallholder female farmers within spatial networks. This finding provides guidance for agricultural development practitioners regarding the importance of social interaction and information provision when promoting long-jump technologies like soybean.
Investigated in this work is the impact of contract farming participation on smallholder farmers’ income and food security in rice crop production in Northern Benin using 400 randomly selected rice farmer households. Unlike previous studies, we corrected for both observed and unobserved biases by combining propensity score matching (PSM) and the local average treatment effect parameter (LATE). The results showed significant negative consequences of partaking in rice contract farming. We found evidence of significant negative effects on rice production income at a 1% level. The more the rice farmers join in contract farming, the lower the farm income became. Decreased food consumption was also a result of contract farming participation for potential participants by a score of 60.64, placing their households at the food security status level of poor food consumption because the quantity and nutritional quality of the food consumed were inadequate. Contract farming is, therefore, not a reasonable policy instrument that can help farmers increase their income and improve their food security level in the Alibori Department, Benin if farmers do not diversify their crops. The necessary resources and economic environment are not yet in place to allow contract farming to take full advantage of its potential benefits. To prevent the wasting of scarce public resources, expanding contract farming would not be appropriate in marginal areas with markets and other infrastructure. Additional measures are needed for contract farming to be profitable for contracting actors and to ensure sustainability and the large-scale participation of farmers.
The Vietnamese government is currently attempting to upgrade rice value chains in the Mekong River Delta by encouraging (i) vertical coordination between exporters and farmers through contract farming, and (ii) horizontal coordination among farmers through the “small farmers, large field” program. Previous studies on the determinants of contract farming participation assume that firms offer only a single contract type, whereas in reality, farmers may face a continuum of exclusive contract options. Devising correct and targeted policies for fostering contract inclusiveness hence crucially hinges on deploying correct econometric specification of the decision to participate in contract farming. We model contract farming participation and intensity in four different ways along the vertical coordination continuum: as a discrete, categorical, ordered, and continuous choice. We find that older, smaller and horizontally coordinated farmers with higher levels of trust in buyers tend to secure higher levels of buyer investment through increased vertical coordination. In contrast with the common finding in the literature that contract participation is biased towards larger farms, our findings from Vietnam suggest that the scale bias of contract farming could be successfully relaxed through horizontal coordination and even reversed under increasing levels of vertical coordination as smaller farmers are found to secure higher levels of buyer investment. These findings highlight the role both policies can play in fostering inclusiveness of contract farming in rice value chain upgrading in Vietnam.
Notes de la rédaction : Reçu le 24.08.17 et accepté pour publication le 10.01.19 Résumé Au Bénin, certains paysans produisent le maïs sous contrat conclus avec les petits commerçants. La présente étude vise à caractériser ces contrats informels et à mesurer leur contribution à la performance de la production de cette céréale. Les données utilisées sont issues d'une enquête conduite au sud-est du Bénin, considéré comme l'un des greniers du Bénin. Les résultats obtenus montrent que les 'petits' comme les 'grands' producteurs sont bien représentés parmi les contractants. Grâce aux contrats, ils bénéficient de crédits substantiels (environ 70.000 FCFA par producteur) investis prioritairement pour louer la main d'oeuvre. Les conflits autour de cet arrangement institutionnel sont rares. Les résultats de l'analyse économétrique montrent que la production du maïs chez les contractants dépasse celle des non-contractants de 25 % par parcelle, en moyenne. Il existe une relation positive et significative entre l'accès au contrat et la superficie du maïs, mais le lien avec le rendement n'est pas confirmé. L'étude conclut que les contrats agricoles contribuent au financement et à l'accroissement de la production vivrière, mais leurs effets sur les productivités sont moins convaincants. Les programmes publics devraient envisager un soutien financier aux petits commerçants de produits vivriers pour promouvoir des contrats agricoles décentralisés dont les mécanismes inciteraient les producteurs à accroître leur productivité. Abstract Informal Contract-farming and Performance of Food Crop Production: The Case of Maize in the Southern of Benin In Benin, some farmers produce maize under contract concluded with small-scale traders. This study aims at identifying the characteristics of this informal contract-farming and measuring its contribution to the performance of the production of this cereal. The data used are from a survey carried out in the southeast of Benin, one of the largest maize producing area of the country. The results of the study show that 'small' as well as 'large' farmers are well represented among the participants into the contract. The amount of credit received through the contract is substantial (70,000 FCFA per farmer) and used in priority to hire additional labour force employed in agriculture. Conflicts in this institutional arrangement are rare. Econometric analysis shows that farmers under contract have higher maize output per plot (+ 25%). There was a positive and significant relationship between participation into the contract and the maize area, but the link with the yield was not confirmed. The results of the study confirm that farmers' access to contract-farming contributes to agricultural finance and increased food crop production, but the effects on the productivity are not convincing. The study concludes that agricultural development policy should facilitate financial support to small-scale traders in order to promote decentralized private sector-based contract-farming that further motivate smallholder farmers to raise productivity.
p>Multinationals can facilitate modernisation in food value chains in developing countries. While most studies focus on export chains, insight on domestic food chains is scant. Our study aims to provide detailed insights into the process of upgrading domestic value chains. A rapidly growing beer market has attracted foreign brewery companies to invest in Ethiopia. These foreign brewers have introduced new sourcing structures in order to increase the supply of high quality raw material. We have used a case study design to explore upgrading processes in malt barley chains, where malt barley is both a food and a cash crop. By introducing strong vertical coordination between farmers and buyers, facilitated by producer organisations and NGOs, foreign brewers have been able to upgrade malt barley chains. We found that both farmers and brewers have benefitted from this upgrading process.</p
Over the course of just a few years, shrimp farming has become a major aquaculture production system in coastal areas of several developing countries across the globe. However, farmers are facing a variety of risks related to disease, market, and climate, which influence risk management strategies and adoption of new technologies. This paper looks at three practices related to pond management: (1) water quality management to ensure a good environment for shrimp growth; (2) adequate feed input; and (3) disease control practices in order to mitigate the risk of disease outbreak in the pond. We investigated adoption of these three practices in smallholder shrimp farms in the Mekong Delta, by exploring how and whether membership into a producer's cluster influences access to knowledge and perception of risk in the adoption process. The results show that, after controlling for farm characteristics, farm clustering has a positive relationship with the adoption of water quality management, feed inputs, and disease control practices. Results also indicate that increasing interaction frequency with public sector and private sector's actors, as well as the perceived degree of market risk, positively influences the adoption of the three pond management practices under study. Mediation analyses show that being a member of a farmer cluster influences adoption of farming practices via two underlying processes: frequency of interaction with public and private sector's actors, and perception of market risk, both of which ultimately promote the adoption of practices. We conclude that clustering is a promising avenue for fostering interactions between farmers and key supporting actors in aquaculture, and impacts both the formation of specific aqua-related risk perceptions and subsequent practice adoption. As such, clusters-by fostering linkages and facilitating interactions between different knowledge sources-can promote adoption of practices toward sustainable in-tensification. However, to more effectively deploy a cluster approach a key policy and practice implication is to take into consideration local idiosyncrasies defined by their social interactions, risk perception and spatial dimensions in order to better facilitate local linkages between farms (horizontal coordination) and a better integration with the value chain (vertical coordination).
Purpose - Due to rapid urbanization, rice consumption in Togo has also rapidly increased. Most consumers prefer imported rice over domestically-produced rice due to the higher quality of the imported rice. The present study shows it is possible to upgrade the quality of Togo’s domestically-produced rice by providing technical and management support in the form of contract farming.
Design/methodology/approach - Cross-sectional data were collected using a multi-stage sampling technique. An Endogenous Switching Regression Model was used for data analysis.
Findings - The results show that by participating in contract farming, paddy rice quality was upgraded from Grade IV (poor quality) to Grade I (premium quality). The factors influencing this upgrade in the quality of paddy rice grown through contract farming are: i) the number of extension visits to the farmer, ii) the mode of threshing used by the farmer, and iii) the agro-ecological zone of the farmer.
Managerial/Policy implications – To assure a high quality of Togo’s domestically-produced paddy rice, the promotion of threshing by flaying rice panicles against a barrel and the use of mechanical threshing are recommended. It is also important to increase the number of visits by extension agents to provide farmers with technical and managerial advice. Contract farming models like the Enterprise de Service et Organization des Producteur (ESOP) scheme in Togo should be promoted in other developing countries to facilitate improvements in the quality of paddy rice and other agricultural products being produced.
Originality/value – This study is original research that contributes to an improved understanding of the impacts of contract farming on the quality of agricultural products produced in developing and emerging economies.
Keywords: Agricultural extension; endogenous switching regression model; Enterprise de Service et Organization des Producteur (ESOP); paddy rice quality; rice threshing
This paper uniquely focuses on rapidly-developing domestic value chains in Africa’s emerging bioeconomy. It uses a comparative case study approach of a public and private cassava outgrower scheme in Ghana to investigate which contract farming arrangements are sustainable for both farmers and agribusiness firms. A complementary combination of qualitative and quantitative methods is employed to assess the sustainability of these institutional arrangements. The results indicate that ad hoc or opportunistic investments that only address smallholders’ marketing challenges are not sufficient to ensure mutually beneficial and sustainable schemes. The results suggest that firms’ capacity and commitment to design contracts with embedded support services for outgrowers is essential to smallholder participation and the long-term viability of these arrangements. Public-private partnerships in outgrower schemes can present a viable option that harnesses the strengths of both sectors and overcomes their institutional weaknesses.
Contract farming (CF) arrangements have the potential to address market failures and improve technology adoption, productivity, and welfare. In Ghana, government and donors use CF as a strategy for increasing adoption of new agricultural technologies and developing value chains. Yet to date, there has not been a rigorous assessment of these CF schemes. The focus in this paper is on different maize-based CF schemes in the poorest and most remote region in Ghana. It assesses the profitability and potential impact of these CF schemes, utilizing a unique plot-level dataset that covers two periods of data and two maize plots (scheme and non-scheme) per household , and employing matching techniques and an instrumental variable approach to address selection bias and unobserved heterogeneity across farmers. These are complemented by a community-level survey , in-depth interviews with scheme operators, and a series of key informant interviews. Results show that these schemes led to improved technology adoption and yield increases. In addition, a subset of maize farmers with high yield improvements due to CF participation have high profits. Maize CF schemes also enabled market coordination and consistent supply of quality maize to downstream industries. However, on average, the impact of the CF schemes on profitability is negative, even when input diversion is accounted for. Yield increases are not high enough to compensate for higher input requirements and the cost of capital under the schemes. Despite higher yields, the costs to produce one metric tonne of maize under CF schemes are higher than on maize farms without CF schemes, twice that of several countries in Africa, and more than seven times higher than that of major maize-exporting countries (the United States, Brazil, and Argentina). Sustainability of these CF schemes will largely depend on developing and promoting much-improved varieties and technologies that boost yields in order to compensate for the high input and credit costs.
Value chain development (VCD) initiatives within the horticultural and organic sectors in Africa are promising strategies to improve smallholder welfare. Contracting institutional arrangements are a common feature of VCD initiatives and are increasing in number in sub-Saharan Africa as a way to source organic products from smallholder producers. The objective of this study is to better understand men and women's participation in spice producing households that sell under contract and in conventional market chains in the East Usambaras, Tanzania. We draw on New Institutional Economics, political economy and the value chain analysis framework to assess the potential role of contracting to promote gender equity among smallholder organic horticultural producers. We describe intra-household decision making over resources and marketing, access to benefits of contracting, and labor distribution between men and women in contracting and non-contracting households. We then extend the gender analysis to evaluate the role of gender in contracting and conventional value chains operating within the community and district. Using a cross-sectional research design and data collected through 13 focus group discussions, 54 personal interviews and 156 household questionnaires, we show that contracting reduces transaction costs in the chain compared with the conventional trade. However, norms in the wider political economic context give rise to gendered patterns of participation in both household and chain activities in contracting and non-contracting households. Our findings suggest that contracting does not provide significant opportunities for women in married households to participate and benefit based on limited participation in decision-making and access to trainings. Divorced women and widows gain access to contract employment opportunities to earn income. This study highlights the importance of understanding gender relations in the household and community to guide the development of gender equitable VCD initiatives and contracting approaches.
The aim of the study was to investigate the main limiting factors that prevent emerging farmers from progressing from subsistence to commercial agricultural farming in the Eastern Cape Province. The study was conducted in the King William's Town area by means of a structured questionnaire survey. A sample of 50 households was drawn from the research area which was chosen owing to its uniqueness with regard to agricultural potential. A descriptive analysis technique was employed to investigate the main limiting factors faced by farming households in migrating towards commercial agricultural markets. The findings demonstrated that the specific limiting factors emerging farmers face are poor physical infrastructure such as poor roads, lack of transportation to the markets from the farms, lack of marketing skills and information, poor market infrastructure, and high transaction costs, insufficient land availability to expand production, lack of agricultural implements to better production, poor production and farm management skills, as well as low education levels which results in an inability to interpret market information to be used in production planning and marketing. The results from the study highlighted that the government has a crucial role to play in increasing market participation of emerging farmers through encouraging group marketing, upgrading of roads to enable smooth accessibility of farmers to output markets and the establishment of local point sales in farming rural areas. Finally the study recommended that government provides planned workshops to all farmers in order to equip them with marketing knowledge.
Purpose
– Contract farming (CF) is seen as a tool for creating new market opportunities hence increasing incomes for smallholder farmers. Critics, however, argue that CF is likely to pass risks to small scale farmers, thus favouring large scale farmers at the expense of smallholder farmers. The purpose of this paper is to examine the effect of CF on smallholder farmers’ income using a case study of avocado farmers in Kandara district in Kenya.
Design/methodology/approach
– The study uses data collected from 100 smallholder avocado farmers in Kandara district in Kenya and employs an instrumental variable model (Probit-2SLS) to control for endogeneity in participation in the contract and examine the effect of CF on household, farm and avocado income.
Findings
– The results indicate that participation in CF is not sufficient to improve household, farm and avocado income. Question remains regarding efficient implementation of CF arrangements to promote spill over effects on other household enterprises.
Research limitations/implications
– The research was carried out using farmers in Kandara district in Kenya as a case study, findings might therefore not reflect the status of CF in all countries.
Originality/value
– The paper contributes to the growing debate on the effect of value chain upgrading strategies such as contracting on smallholder farmers’ welfare. The form of contracting studied in this paper differs from the standard contracts in that the key stakeholders (producers) are loosely enjoined in the contract through officials of their groups.
Models of Autoregressive Conditional Heteroscedasticity (ARCH) and their generalizations are widely used in applied econometric research, especially for analysis of financial markets. We bring to our reader’s attention a consul-tation on this topic prepared from the book of Marno Verbeek “A Guide to Modern Econometrics” appearing soon in the Publishing House “Nauchnaya Kniga”
Note: this is not the textbook "A Guide to Modern Econometrics", which is copyright owned by John Wiley and Sons.
This study aims to explore the determinants of farmers' participation in contract farming by using a qualitative approach and empirically assess the impact of the factors withdrawn from the qualitative analysis and previous studies by employing the probit model in Vietnam. The qualitative analysis illustrates 10 original factors that affect farmers' participation in contract farming, including cooperative membership, quality certifications, sale preferences, farming difficulties, technology, supporting policy and program, estimation of oversupply, market information flow, association membership, and experience of contract farming failure. The quantitative analysis provides empirical evidence that female heads, firm consulting activities, firm scales, cooperative membership, quality certifications, and good‐road locations can significantly and positively influence farmers' participation in contract farming. Cooperative membership and quality certifications are the most important factors. Contrary to the expectation, head education and good soil negatively impact farmers' participation in contract farming. Besides, bad soil can hinder farmers from participating in contract farming. [EconLit Citations: C12, L24, O13, O14, Q12, Q18].
Edamame has many nutritional and human health benefits and has the potential to overcome malnutrition, a common scourge among West African populations. This study aims to identify sensory preference criteria in order to select edamame varieties that meet the organoleptic needs of potential consumers in Benin. Ten soybean varieties were selected on the basis of their stability, adaptability, and yield performance in Benin. These varieties were evaluated by a hedonic test conducted with 200 untrained panelists, followed by a descriptive sensory evaluation conducted with 20 trained panelists identified and selected among the previous 2. The hedonic test used sensory attributes such as appearance, flavor, taste, and texture. The descriptive test characterized each sensory parameter using sensory descriptors such as seed size, green color, sweetness, aftertaste, starch, nuttiness, beaniness, and chewiness. The study showed significant variation in sensory attributes for most genotypes (p < .001), expressing the variation in choices made by panelists. With the exception of flavor, all other sensory parameters scored higher. Sensory preference criteria were large seed size, sweetness, moderate chewiness, and starchy texture. The genotypes AGS 466, AGS 472, and Ashorowase were the most preferred by more than 90% of the panelists. In contrast, the soybean varieties Maksoy 3N and Early Hakucho were the least preferred by less than 20% of the panelist. The grain type soybean variety S1079‐6‐7, which showed moderate acceptability for edamame consumption among consumers in Benin may be considered by breeders for improvement of sensory attributes. This study revealed the sensory preference criteria of consumers in Benin for edamame. Such information is instrumental in the design of breeding programs for the crop. Also the findings of this study is useful for market segmentation. The panelists expressed high willingness to adopt edamame consumption. This is key, as it can it will inform decision of private companies, maket gardenning professionnals and ultimately can boost the edamame sector in Benin.
Poverty is prevalent in the small-farm sector of many developing countries. A large literature suggests that contract farming-a preharvest agreement between farmers and buyers-can facilitate smallholder market participation, improve household welfare, and promote rural development. These findings have influenced the development policy debate, but the external validity of the extant evidence is limited. Available studies typically focus on a single contract scheme or on a small geographical area in one country. We generate evidence that is generalizable beyond a particular contract scheme, crop, or country, using nationally representative survey data from 6 countries. We focus on the implications of contract farming for household income and labor demand, finding that contract farmers obtain higher incomes than their counterparts without contracts only in some countries. Contract farmers in most countries exhibit increased demand for hired labor, which suggests that contract farming stimulates employment, yet we do not find evidence of spillover effects at the community level. Our results challenge the notion that contract farming unambiguously improves welfare. We discuss why our results may diverge from previous findings and propose research designs that yield greater internal and external validity. Implications for policy and research are relevant beyond contract farming.
Purpose
The purpose of this paper is to quantify the benefits of contract farming (CF) on farmers’ income and adoption of food safety measures (FSMs) at the farm level. The paper also investigates the determinants of participation in CF.
Design/methodology/approach
The study is based on a survey of 600 tomato farmers from Nepal. Descriptive statistics, regression analysis (using instrumental variable) and propensity score matching have been used to accomplish the objectives of the study.
Findings
The study found that the CF ensures higher returns to farmers as well as higher adoption of FSMs at the farm level. The contract farmers earned about 38 per cent higher net returns and had 38 per cent higher adoption of FSM as compared to independent farmers. Caste, occupation, farm size and cropping intensity significantly affected farmers’ participation in CF.
Research limitations/implications
The analysis based on cross-section data has limitations to consider unobserved farmer-level individual heterogeneity.
Originality/value
This study will provide an empirical base to promote CF in Nepal. The study will also contribute to bridge the gap in literature on the drivers of CF and its impact on smallholders’ income and compliance with FSM in Nepal.
In the recent explosion of attention given to the land grabbing phenomenon, contract farming has been identified as a potentially inclusive alternative for smallholders to outright acquisition of farm land by agri-business capital. This paper responds to these claims by resituating contract farming as an equally important form of land control. The focus of the paper is a case study of potato contract farming in Maharashtra, India. While there is ‘nothing new’ about contract farming as a mode of agriculture production in India, its influence on patterns of agrarian change is poorly understood. Adopting an agrarian political economy-informed livelihoods approach, the paper argues that rather than an inclusive alternative to land grabbing, contract farming in the study site represents another way that capital is coming to control land in rural India, with just as important implications for agrarian livelihoods. While some individual households have improved their livelihoods through participation, the contract scheme acts to reinforce already existing patterns of inequality. In particular, the unequal power relations between firm and farmer skew the capture of benefits towards the firm, and render participating households vulnerable to indebtedness and loss of autonomy over land and livelihood decisions.
Contract farming (CF) has long been practiced but is becoming increasingly common in both developed and developing countries with the heightened interest of consumers in food safety and quality. Under CF, farmers and buyers make advance agreements on volume, quality, time of delivery, use of inputs, and price or pricing formula. This article critically reviews the literature on CF to assess how it contributes to improving production efficiency and income of farmers in general and of small-scale farmers in particular. Although our review focuses on literature in developing countries because of its predominance, we refer to literature in developed countries (primarily the United States) to gain a deeper understanding of the impacts of CF. We find that although CF contributes to the improvement of farmers’ income by introducing new crops and production methods, there is room for strengthening its effects on poverty reduction through policy. Expected final online publication date for the Annual Review of Resource Economics Volume 8 is October 05, 2016. Please see http://www.annualreviews.org/catalog/pubdates.aspx for revised estimates.
Despite more than a decade of NGO and government activities promoting developing world farmer participation in high-value agricultural markets, evidence regarding the household welfare effects of such initiatives is limited. This article analyzes the geographic placement of supermarket supply chains in Nicaragua between 2000 and 2008 and uses a difference-in-differences specification on measures of supplier and nonsupplier assets to estimate the welfare effects of small farmer participation. Though results indicate that selling to supermarkets increases household productive asset holdings, they also suggest that only farmers with advantageous endowments of geography and water are likely to participate.
Supermarkets, specialized wholesalers, processors, and agro-exporters are transforming the marketing channels into which smallholder farmers sell produce in low-income economies. We develop a conceptual framework with which to study contracting between smallholders and a commodity-processing firm. We then synthesize results from empirical studies of contract farming arrangements in five countries (Ghana, India, Madagascar, Mozambique, and Nicaragua). The resulting meta-narrative documents patterns of participation, the welfare gains associated with participation, reasons for nonparticipation, the significant extent of contract noncompliance, and the considerable dynamism of these value chains as farmers and firms enter and exit frequently.
This article explores the motivations behind the decision of small-scale producers to grow nontraditional vegetables under contract for export. Based on a survey of small-scale producers in Zimbabwe, four factors are identified as motivating contracting, namely, market uncertainty, indirect benefits (e.g., knowledge acquisition), income benefits, and intangible benefits. Respondents are clustered according to the relative importance of these factors in their contracting decision. Four clusters are identified and related to the characteristics of these farmers including size of the farm, amount of land devoted to export crops, access to alternative markets, and the proportion of family income derived from export crops. The results suggest that there are systematic differences between farmers in their decisions to contract which needs to be recognized in contract design and management.
Participation in Contract Farming and Economic Efficiency of Soybean Production in the Northern Region of Ghana. PhD dissertation. University for Development Studies
- Y Abdulai
Abdulai Y, 2023. Participation in Contract Farming and Economic Efficiency of Soybean Production in the
Northern Region of Ghana. PhD dissertation. University for Development Studies, Tamale, Ghana.
Déterminants de la participation des producteurs aux Agribusiness Clusters (ABC) au Bénin
- A Assouma
- Sodjinou
- J A Amadou
- Yabi
Assouma A, E Sodjinou, Z Amadou, and JA Yabi, 2023. Déterminants de la participation des producteurs aux
Agribusiness Clusters (ABC) au Bénin. Bulletin de la Recherche Agronomique du Bénin, 33(4): 116-127.
Influence des Agribusiness Clusters (ABC) sur l'accès des petits riziculteurs aux services agricoles de productivité au Centre et au Nord du Bénin
- O R Awode
- E Sodjinou
Awode OR, and E Sodjinou, 2023. Influence des Agribusiness Clusters (ABC) sur l'accès des petits
riziculteurs aux services agricoles de productivité au Centre et au Nord du Bénin. Bulletin de la
Recherche Agronomique du Bénin, 33(5): 36-46.
Farmer's participation in contract farming in india: a study of Bihar
- D K Behera
Behera DK, 2019. Farmer's participation in contract farming in india: a study of Bihar. Agricultural
Economics Review, 20(2): 80-89