Advanced Search
MyIDEAS: Login

As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming

Contents:

Author Info

  • Bellemare, Marc F.

Abstract

Contract farming is widely perceived as a means of increasing welfare in developing countries. Because of smallholder self-selection in contract farming, however, it is not clear whether contract farming actually increases grower welfare. In an effort to improve upon existing estimates of the welfare impacts of contract farming, this paper uses the results of a contingent-valuation experiment to control for unobserved heterogeneity among smallholders. Using data across several regions, firms, and crops in Madagascar, results indicate that a 1-percent increase in the likelihood of participating in contract farming is associated with a 0.5-percent increase in household income, among other positive impacts.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0305750X11003111
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 7 ()
Pages: 1418-1434

as in new window
Handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1418-1434

Contact details of provider:
Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: contract farming; welfare; grower–processor contracts; outgrower schemes; Africa; Madagascar;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. John A. List & Sally Sadoff & Mathis Wagner, 2009. "So you want to run an experiment, now what? Some Simple Rules of Thumb for Optimal Experimental Design," Carlo Alberto Notebooks 125, Collegio Carlo Alberto.
  2. repec:feb:artefa:0096 is not listed on IDEAS
  3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
  4. Maertens, Miet & Swinnen, Johan F.M., 2009. "Trade, Standards, and Poverty: Evidence from Senegal," World Development, Elsevier, vol. 37(1), pages 161-178, January.
  5. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
  6. Bellemare, Marc F., 2010. "Agricultural Extension and Imperfect Supervision in Contract Farming: Evidence from Madagascar," MPRA Paper 23788, University Library of Munich, Germany.
  7. M. Keith Chen, 2008. "Rationalization and Cognitive Dissonance: Do Choices Affect or Reflect Preferences?," Cowles Foundation Discussion Papers 1669, Cowles Foundation for Research in Economics, Yale University.
  8. Foster, Andrew D. & Rosenzweig, Mark R., 2010. "Microeconomics of Technology Adoption," Working Papers 78, Yale University, Department of Economics.
  9. Trudy Ann Cameron & Michelle D. James, 1986. "Efficient Estimation Methods for "Closed-Ended" Contingent Valuation Surveys," UCLA Economics Working Papers 404, UCLA Department of Economics.
  10. Masahide Watanabe, 2010. "Nonparametric Estimation of Mean Willingness to Pay from Discrete Response Valuation Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1114-1135.
  11. Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.
  12. Bart Minten & Lalaina Randrianarison & Johan F.M. Swinnen, 2006. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," LICOS Discussion Papers 16406, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  13. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2012. "Smallholder Participation in Contract Farming: Comparative Evidence from Five Countries," World Development, Elsevier, vol. 40(4), pages 715-730.
  14. Stefan Dercon, 2005. "Risk, Poverty and Vulnerability in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(4), pages 483-488, December.
  15. repec:feb:framed:0075 is not listed on IDEAS
  16. Bellemare, Marc F. & Barrett, Christopher B., 2005. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," Working Papers 14748, Cornell University, Department of Applied Economics and Management.
  17. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  18. Joshua Angrist, 1989. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," Working Papers 631, Princeton University, Department of Economics, Industrial Relations Section..
  19. Porter, Gina & Phillips-Howard[malt], Kevin, 1997. "Comparing contracts: An evaluation of contract farming schemes in Africa," World Development, Elsevier, vol. 25(2), pages 227-238, February.
  20. Warning, Matthew & Key, Nigel, 2002. "The Social Performance and Distributional Consequences of Contract Farming: An Equilibrium Analysis of the Arachide de Bouche Program in Senegal," World Development, Elsevier, vol. 30(2), pages 255-263, February.
  21. Bryan J. Hubbell & Michele C. Marra & Gerald A. Carlson, 2000. "Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 118-132.
  22. Philip McMichael, 2009. "A food regime analysis of the ‘world food crisis’," Agriculture and Human Values, Springer, vol. 26(4), pages 281-295, December.
  23. Daniel A. Ackerberg & Maristella Botticini, 2002. "Endogenous Matching and the Empirical Determinants of Contract Form," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 564-591, June.
  24. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "Supermarkets, Farm Household Income, and Poverty: Insights from Kenya," World Development, Elsevier, vol. 39(5), pages 784-796, May.
  25. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
  26. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records: Errata," American Economic Review, American Economic Association, vol. 80(5), pages 1284-86, December.
  27. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
  28. Singh, Sukhpal, 2002. "Contracting Out Solutions: Political Economy of Contract Farming in the Indian Punjab," World Development, Elsevier, vol. 30(9), pages 1621-1638, September.
  29. repec:feb:natura:0057 is not listed on IDEAS
  30. Hubbell, Bryan J. & Marra, Michele C. & Carlson, Gerald A., 2000. "Estimating The Demand For A New Technology: Bt Cotton And Insecticide Policies In The Southeast," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26016, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  31. Miyata, Sachiko & Minot, Nicholas & Hu, Dinghuan, 2007. "Impact of contract farming on income: Linking small farmers, packers, and supermarket in China," IFPRI discussion papers 742, International Food Policy Research Institute (IFPRI).
  32. Phil Simmons & Paul Winters & Ian Patrick, 2005. "An analysis of contract farming in East Java, Bali, and Lombok, Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 513-525, November.
  33. Vossler, Christian A. & Kerkvliet, Joe, 2003. "A criterion validity test of the contingent valuation method: comparing hypothetical and actual voting behavior for a public referendum," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 631-649, May.
  34. Minot, Nicholas, 1986. "Contract Farming and Its Effect on Small Farmers in Less Developed Countries," Food Security International Development Working Papers 54740, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  35. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming
    by Marc F. Bellemare in Marc F. Bellemare on 2012-05-08 09:00:08
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Céline Guimas, 2012. "Effect of organic contract farming on labor demand. A study case in the Western Uganda," Post-Print dumas-00802135, HAL.
  2. Sudha Narayanan, 2012. "Safe gambles? Farmer perceptions of transactional certainty and risk-return tradeoffs in contract farming schemes in Southern India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-021, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2012. "Smallholder Participation in Contract Farming: Comparative Evidence from Five Countries," World Development, Elsevier, vol. 40(4), pages 715-730.
  4. Neda Trifković, 2013. "Governance Strategies and Welfare Effects: Vertical Integration and Contracts in the Catfish Sector in Vietnam," IFRO Working Paper 2013/20, University of Copenhagen, Department of Food and Resource Economics.
  5. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2010. "Smallholder Participation in Agricultural Value Chains: Comparative Evidence from Three Continents," MPRA Paper 27829, University Library of Munich, Germany.
  6. Linda Kleemann & Awudu Abdulai & Mareike Buss, 2013. "Is Organic Farming Worth its Investment? The Adoption and Impact of Certified Pineapple Farming in Ghana," Kiel Working Papers 1856, Kiel Institute for the World Economy.
  7. Sudha Narayanan, 2012. "The Heterogeneous welfare impacts of participation in contract farming schemes: Evidence from Southern India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-019, Indira Gandhi Institute of Development Research, Mumbai, India.
  8. Hope C. Michelson, 2013. "Small Farmers, NGOs, and a Walmart World: Welfare Effects of Supermarkets Operating in Nicaragua," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 628-649.
  9. Abebe, Gumataw K. & Bijman, Jos & Kemp, Ron & Omta, Onno & Tsegaye, Admasu, 2013. "Contract farming configuration: Smallholders’ preferences for contract design attributes," Food Policy, Elsevier, vol. 40(C), pages 14-24.
  10. Gómez, Miguel I. & Ricketts, Katie D., 2013. "Food value chain transformations in developing countries: Selected hypotheses on nutritional implications," Food Policy, Elsevier, vol. 42(C), pages 139-150.
  11. Narayanan, Sudha, 2014. "Profits from participation in high value agriculture: Evidence of heterogeneous benefits in contract farming schemes in Southern India," Food Policy, Elsevier, vol. 44(C), pages 142-157.
  12. Bellemare, Marc F. & Holmberg, Andrew M., 2010. "The Determinants of Music Piracy in a Sample of College Students," MPRA Paper 23641, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1418-1434. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.