IDEAS home Printed from https://ideas.repec.org/a/fan/ecaqec/vhtml10.3280-ecag2023oa14670.html
   My bibliography  Save this article

Impact of Contract Farming on the Technical Efficiency of Broiler Farmers in Indonesia

Author

Listed:
  • Mohammad Rondhi
  • Ebban Bagus Kuntadi
  • Anik Suwandari
  • Rizky Yanuarti
  • Ahmad Fatikhul Khasan
  • Yasuhiro Mori
  • Takumi Kondo

Abstract

The objective of this paper is to estimate the effect of Contract Farming (CF) on the efficiency of broiler farmers in Indonesia. We used comprehensive socio-economic data of 438 broiler farmers in Indonesia. To achieve this objective we used causal-comparative research (CCR) design. Stochastic frontier production (SFP) employed to estimate farm efficiency. Then, the effect of CF on farm efficiency was estimated using propensity score matching (PSM). The results showed that the average technical efficiency of broiler farmers is 74.22%. Participation in CF increases TE by 7.4% and chick productivity by 12.5%. A policy that promotes farmer participation in CF is likely to improve the efficiency of broiler farmers since it is associated with improved input use intensity.

Suggested Citation

  • Mohammad Rondhi & Ebban Bagus Kuntadi & Anik Suwandari & Rizky Yanuarti & Ahmad Fatikhul Khasan & Yasuhiro Mori & Takumi Kondo, 2023. "Impact of Contract Farming on the Technical Efficiency of Broiler Farmers in Indonesia," Economia agro-alimentare, FrancoAngeli Editore, vol. 25(1), pages 35-55.
    • Handle: RePEc:fan:ecaqec:v:html10.3280/ecag2023oa14670
    as

    Download full text from publisher

    File URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=73230&Tipo=ArticoloPDF
    Download Restriction: Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Shingo Kimura & Jesús Antón & Christine LeThi, 2010. "Farm Level Analysis of Risk and Risk Management Strategies and Policies: Cross Country Analysis," OECD Food, Agriculture and Fisheries Papers 26, OECD Publishing.
    2. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    3. Donald P. Cram & Vijay Karan & Iris Stuart, 2009. "Three Threats to Validity of Choice†based and Matched†Sample Studies in Accounting Research," Contemporary Accounting Research, John Wiley & Sons, vol. 26(2), pages 477-516, June.
    4. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
    5. Le Ngoc, H., 2018. "Contract farming effects on technical efficiency of the export-oriented rice production sector in Vietnam," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277409, International Association of Agricultural Economists.
    6. Khan, Muhammad Fawad & Nakano, Yuko & Kurosaki, Takashi, 2019. "Impact of contract farming on land productivity and income of maize and potato growers in Pakistan," Food Policy, Elsevier, vol. 85(C), pages 28-39.
    7. Ruml, Anette & Qaim, Matin, 2019. "New evidence regarding the effects of contract farming on agricultural labor use," GlobalFood Discussion Papers 298450, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    8. Mao, Hui & Zhou, Li & Ifft, Jennifer & Ying, RuiYao, 2019. "Risk preferences, production contracts and technology adoption by broiler farmers in China," China Economic Review, Elsevier, vol. 54(C), pages 147-159.
    9. MacDonald, James M. & Perry, Janet E. & Ahearn, Mary Clare & Banker, David E. & Chambers, William & Dimitri, Carolyn & Key, Nigel D. & Nelson, Kenneth E. & Southard, Leland W., 2004. "Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities," Agricultural Economic Reports 34013, United States Department of Agriculture, Economic Research Service.
    10. K M Mehedi Adnan & Liu Ying & Zeraibi Ayoub & Swati Anindita Sarker & Rashid Menhas & Feiyu Chen & Man (Mark) Yu, 2020. "Risk Management Strategies to Cope Catastrophic Risks in Agriculture: The Case of Contract Farming, Diversification and Precautionary Savings," Agriculture, MDPI, vol. 10(8), pages 1-16, August.
    11. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economic Reports 34081, United States Department of Agriculture, Economic Research Service.
    12. Ismat Ara Begum & Mohammad Jahangir Alam & Jeroen Buysse & Aymen Frija & Guido Van Huylenbroeck, 2012. "Contract farmer and poultry farm efficiency in Bangladesh: a data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3737-3747, October.
    13. Patrick, Ian, 2004. "Contract farming in Indonesia: Smallholders and agribusiness working together," Technical Reports 113792, Australian Centre for International Agricultural Research.
    14. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rokhania & Rondhi, Mohammad & Kuntadi, Ebban Bagus & Suwandari, Anik & Yanuarti, Rizky & Khasan, Ahmad Fatikhul & Mori, Yasuhiro & Kondoca, Takumi, 2023. "Impact of Contract Farming on the Technical Efficiency of Broiler Farmers in Indonesia," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 25(1), April.
    2. Fanny Widadie & Jos Bijman & Jacques Trienekens, 2021. "Farmer preferences in contracting with modern retail in Indonesia: A choice experiment," Agribusiness, John Wiley & Sons, Ltd., vol. 37(2), pages 371-392, April.
    3. Jean-Louis Combes & Alexandru Minea & Pegdéwendé Nestor Sawadogo, 2019. "Assessing the effects of combating illicit financial flows on domestic tax revenue mobilization in developing countries," CERDI Working papers halshs-02019073, HAL.
    4. Dettmann, E. & Becker, C. & Schmeißer, C., 2011. "Distance functions for matching in small samples," Computational Statistics & Data Analysis, Elsevier, vol. 55(5), pages 1942-1960, May.
    5. Balima, Wenéyam Hippolyte & Combes, Jean-Louis & Minea, Alexandru, 2017. "Sovereign debt risk in emerging market economies: Does inflation targeting adoption make any difference?," Journal of International Money and Finance, Elsevier, vol. 70(C), pages 360-377.
    6. Nguyen Thi Chau & Tofael Ahamed, 2022. "Analyzing Factors That Affect Rice Production Efficiency and Organic Fertilizer Choices in Vietnam," Sustainability, MDPI, vol. 14(14), pages 1-11, July.
    7. Marco Caliendo & Stefan Tübbicke, 2020. "New evidence on long-term effects of start-up subsidies: matching estimates and their robustness," Empirical Economics, Springer, vol. 59(4), pages 1605-1631, October.
    8. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2023. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(1), pages 117-174, March.
    9. Ggombe Kasim Munyegera & Akampumuza Precious, 2018. "The gender gap in firm productivity in Rwanda: Evidence from establishment and household enterprise data," WIDER Working Paper Series wp-2018-100, World Institute for Development Economic Research (UNU-WIDER).
    10. Kodjo Adandohoin & Vigninou Gammadigbe, 2022. "The revenue efficiency consequences of the announcement of a tax transition reform: The case of WAEMU countries," African Development Review, African Development Bank, vol. 34(S1), pages 195-218, July.
    11. Ashish Aman Sinha & Hari Charan Behera & Ajit Kumar Behura & Braja Bandhu Swain, 2021. "Land Allocation Choice in Both Contract and Non-Contract Farming: A Study of Potato Growers in West Bengal, India," SAGE Open, , vol. 11(3), pages 21582440211, September.
    12. Ji, Sisi & Zhu, Zheyi, 2022. "Does higher education matter for health?," Cardiff Economics Working Papers E2022/4, Cardiff University, Cardiff Business School, Economics Section.
    13. Caliendo, Marco & Künn, Steffen & Weißenberger, Martin, 2016. "Personality traits and the evaluation of start-up subsidies," European Economic Review, Elsevier, vol. 86(C), pages 87-108.
    14. Pak, Tae-Young, 2020. "Social protection for happiness? The impact of social pension reform on subjective well-being of the Korean elderly," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 349-366.
    15. Solomon Asfaw & Silvio Daidone & Benjamin Davis & Josh Dewbre & Alessandro Romeo & Paul Winters & Katia Covarrubias & Habiba Djebbari, 2012. "Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour – Methodological Guidelines for the From Protection to Production Project," Working Papers 101, International Policy Centre for Inclusive Growth.
    16. Kruppe, Thomas & Scholz, Theresa, 2014. "Labour hoarding in Germany : employment effects of short-time work during the crises," IAB-Discussion Paper 201417, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. El Benni, Nadja & Finger, Robert, 2014. "Where is the risk? Price, yield and cost risk in Swiss crop production," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 95(3).
    18. Weneyam Hippolyte Balima & Jean-Louis Combes & Alexandru Minea, 2015. "Sovereign Debt Risk in Emerging Countries: Does Inflation Targeting Adoption Make Any Difference?," CERDI Working papers halshs-01128239, HAL.
    19. Gunther Bensch & Jochen Kluve & Jörg Peters, 2011. "Impacts of rural electrification in Rwanda," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 3(4), pages 567-588, December.
    20. Timo Mitze & Alfredo R. Paloyo & Björn Alecke, 2015. "Is There a Purchase Limit on Regional Growth? A Quasi-experimental Evaluation of Investment Grants Using Matching Techniques," International Regional Science Review, , vol. 38(4), pages 388-412, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fan:ecaqec:v:html10.3280/ecag2023oa14670. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefania Rosato (email available below). General contact details of provider: http://www.francoangeli.it/riviste/sommario.aspx?IDRivista=214 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.