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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.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

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

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1418-1434

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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:

• L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
• O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
• L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
• Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
• O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

References

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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

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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. Johan Swinnen & Anneleen Vandeplas, 2012. "Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains," Journal of Globalization and Development, De Gruyter, vol. 2(2), pages 2.
   
   • Swinnen, Jo & Vandeplas, Anneleen, 2011. "Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/349337, Katholieke Universiteit Leuven.
   • Swinnen, Johan F.M. & Vandeplas, Anneleen, 2009. "Rich consumers and poor producers: Quality and rent distribution in global value chains," IFPRI discussion papers 932, International Food Policy Research Institute (IFPRI).
   • Swinnen, Jo & Vandeplas, Anneleen, 2009. "Rich consumers and poor producers: quality and rent distribution in global value chains," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/255644, Katholieke Universiteit Leuven.
3. 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.
4. 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.

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