Effect of contract farming on productivity and income of small holders: The case of tea production in north-western Vietnam
AbstractThis paper examines potential of contract farming as a rural development tool by revealing its effect on productivity and income of small holders in tea production in north-western Vietnam. In the present research, three economic analyses are applied. First, the technical efficiency of tea production is estimated by using stochastic frontier model. The results show that contract farming achieved significantly higher technical efficiency compared to non-contract farming. Second, logit model is investigated to determine the influential socio-economic characteristics of households for contract participation. The model indicates that social relationship of households, such as the membership in the communist party, play an important role in contract participation with 73% correct prediction. Finally, the impact of contract participation on income is estimated by applying Propensity Score Matching. A significant effect of contract participation on income by 8,000 VND daily per capita can be observed.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51681.
Date of creation: 2009
Date of revision:
Contract farming; Tea; Vietnam; Community/Rural/Urban Development; Crop Production/Industries; Food Security and Poverty; Productivity Analysis; C21; D24; O12; Q12;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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