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Evaluation of a Hybrid Seed Contract between Smallholders and a Multinational Company in East Java, Indonesia

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Author Info

  • Paul Winters
  • Phil Simmons
  • Ian Patrick

Abstract

This article evaluates a hybrid seed contract between Indonesian smallholders and Pioneer Hybrid International. A transaction cost approach was used to analyse contract participation, total farm gross margins and labour and chemical use. The empirical results suggest: (a) the contract favours farmers with more irrigated land; (b) the contract improved returns to farm capital and was welfare improving; (c) the contract increased the demand for non-family labour, particularly female labour; and (d) the contract increased the intensity of chemical use. The success of the contract was attributed to the nature of the contracting process, which was between Pioneer and grower groups and not individual smallholders.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0022038042000276572
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 41 (2005)
Issue (Month): 1 ()
Pages: 62-89

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Handle: RePEc:taf:jdevst:v:41:y:2005:i:1:p:62-89

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  1. Andrew Dorward, 2001. "The Effects of Transaction Costs, Power and Risk on Contractual Arrangements: A Conceptual Framework for Quantitative Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 59-73.
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Cited by:
  1. 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.
  2. Ito, Junichi & Bao, Zongshun & Su, Qun, 2012. "Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation," Food Policy, Elsevier, vol. 37(6), pages 700-709.
  3. Suzuki, Aya & Jarvis, Lovell S. & Sexton, Richard J., 2011. "Partial Vertical Integration, Risk Shifting, and Product Rejection in the High-Value Export Supply Chain: The Ghana Pineapple Sector," World Development, Elsevier, vol. 39(9), pages 1611-1623, September.
  4. Patrick, Ian & Marshall, Graham R. & Abdurrahman, Muktasam & Ambarawati, I Gusti Agung Ayu, 2006. "Determining the Role of Social Capital in Linking Smallholders with Agribusiness," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139890, Australian Agricultural and Resource Economics Society.

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