Contract Farming and Food Security

Bellemare, Marc F.; Novak, Lindsey

doi:10.1093/ajae/aaw053

Cited by 157 publications

(110 citation statements)

References 30 publications

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“…Association membership exhibits a positive and significant impact on written contracts and verbal contracts choices but negative and significant impact on spot market transactions, suggesting that farmers who belong to farmer associations are more likely to engage paddy buyers in output transactions, using written contracts and verbal contracts but less likely to supply paddy in spot markets. This finding is consistent with Bellemare and Novak () and Maertens and Vande Velde (). Farmers belonging to farmers’ associations normally benefit from collective action through collective marketing, bulk input purchase, and other group activities, which enable members to enjoy economies of scale, increased bargaining power, and reduced transaction costs.…”

Section: Empirical Results and Discussionsupporting

confidence: 93%

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

Abdul‐Rahaman¹,

Abdulai²

2019

Agribusiness

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Despite the fact that contracting facilitates farmer participation in agrifood value chains, evidence on farmers’ participation in different forms of contracts and the impact on farm performance is still limited. This study examines the determinants and impacts of vertical coordination mechanism‐spot market transactions, written, and verbal contract‐on‐farm performance of rice farmers in northern Ghana, using a multinomial BFG model to account for selectivity bias. The findings indicate that vertical coordination participation decision is significantly influenced by age, access to credit, labor, association membership, and sales to institutional buyers. The empirical results also reveal significant gains in farm performance outcomes from participating in written and verbal contracts, relative to spot market transactions.

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Section: Empirical Results and Discussionsupporting

confidence: 93%

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

Abdul‐Rahaman¹,

Abdulai²

2019

Agribusiness

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“…Export or processing companies often source agricultural products through outgrower schemes, in order to ensure consistent and high-quality supply (Barrett et al, 2012;Dedehouanou et al, 2013;Bellemare and Novak, 2016). Also in domestic supply chains in developing countries, the role of contracting increases.…”

Section: Introductionmentioning

confidence: 99%

Farmers’ preferences for supermarket contracts in Kenya

Ochieng

Veettil²,

Qaim

2017

Food Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWith the modernization of global agri-food systems, the role of contract farming is increasing. This also involves smallholder farmers in developing countries. While previous studies have looked at economic impacts of contract schemes on smallholder farmers, little is known about farmers' preferences for contracting in general, and for specific contract design attributes in particular. Better understanding farmers' preferences and constraints is important to make smallholder contract schemes more viable and beneficial. This article builds on a choice experiment to analyze farmers' preferences and preference heterogeneity for contracts in Kenya. In the study region, supermarkets use contracts to source for fresh vegetables directly from preferred suppliers. However, farmer dropout rates are high. Mixed logit models are estimated to examine farmers' attitudes towards critical contract design attributes. Having to deliver their harvest to urban supermarkets is costly; hence farmers require a significant output price markup. Farmers also dislike delayed payments that are commonplace in contract schemes. The most problematic contract attribute is related to unpredictable product rejection rates, which substantially add to farmers' risk. Designing contracts with lower transaction costs, more transparent quality grading, and fairer risk-sharing clauses could enhance smallholder participation in supermarket procurement channels.

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“…In doing so, we explain the role contract farming plays within modernized agricultural value chains and in the broader structural transformation. We then present an empirical illustration of the diversity of contract farming arrangements using household survey data from Madagascar, which have often been used to study contract farming (Bellemare 2012(Bellemare , 2018Bellemare and Novak 2017;Bellemare, Lee, and Novak 2018), describing the nature of the contract, how authority is delegated within it, the nature of the price paid, the diverse crops grown under contract in the data, and who provides which input in those contracts. We then briefly investigate the correlates of participation in contract farming as well as the correlates of willingness to pay to participate in contract farming before concluding with some implications for policy.…”

mentioning

confidence: 99%

In All Shapes and Colors: Varieties of Contract Farming

Bellemare

Lim

2018

Applied Eco Perspectives Pol

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Contract farming, wherein a processor contracts out the production of an agricultural commodity to a grower, is the first step toward more vertically coordinated-and thus more modern-agricultural value chains. As such, in principle contract farming is a necessary condition for the structural transformation of developing economies to occur. Yet contract farming is far from monolithic, and the institution takes on a variety of forms. In this article, we describe how the institution of contract farming varies in cross-sectional data covering 1,200 households across six regions of Madagascar, half of which are growers in contract farming agreements covering a dozen different crops. In this setting, participation in contract farming has been associated with increases in income, improvements in food security, and reductions in income variability. Given those presumed effects in this setting of participation in contract farming, we then look at the correlates in our data of participation in contract farming. as well as one's willingness to pay to participate in contract farming as a grower in an attempt to better target policies aimed at encouraging participation in contract farming.

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Contract Farming and Food Security

Cited by 157 publications

References 30 publications

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

Farmers’ preferences for supermarket contracts in Kenya

In All Shapes and Colors: Varieties of Contract Farming

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