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Vertical Integration In Agriculture And Contract Farming

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Author Info
Rehber, Erkan
Abstract

It has been widely argued recently that agriculture is undergoing a process of vertical integration with allied industries. One of the worldwide ways of vertical integration in agriculture is contract farming. Contract farming is a continually evolving process. Worldwide applications of contract farming have shown that the terms of contracts are shaped by their own conditions and varied from product to product. Also, each country has its own experiences. Contract farming has many advantages for both producers/growers and integrators, besides some inherent disadvantages and failures regarding its implementation. Some measures, however, could be taken to outweigh these advantages for both sides. In this study, first of all, a brief history is presented along with an explanation of contract farming concepts. Secondly, the reasons behind contract farming are discussed. And, successes and failures of contract farming are analyzed based on several research works and articles. Finally a simplified model is presented for the success of private contractual arrangements in the light of evidence taken from the experiences on the world.

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Publisher Info
Paper provided by Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance in its series Working Papers with number 25991.

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Date of creation: 1998
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Handle: RePEc:ags:rpspwp:25991

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Postal: Draper Hall, College of Food and Natural Resources, Amherst, MA 01003
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Web page: http://www.umass.edu/ne165/
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Related research
Keywords: Vertical integration; contract farming; out-grower schemes; Agribusiness;

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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.:
  1. Johnson, C. Scott & Foster, Kenneth A., 1994. "Risk Preferences And Contracting In The U.S. Hog Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(02), December. [Downloadable!]
  2. Glover, David J., 1984. "Contract farming and smallholder outgrower schemes in less-developed countries," World Development, Elsevier, vol. 12(11-12), pages 1143-1157. [Downloadable!] (restricted)
  3. D. Glover, 1990. "Contract Farming And Outgrower Schemes In East And Southern Africa," Journal of Agricultural Economics, Blackwell Publishing, vol. 41(3), pages 303-315. [Downloadable!] (restricted)
  4. Minot, Nicholas William, 1986. "Contract Farming and Its Effect on Small Farmers in Less Developed Countries," Food Security III Papers 11286, Michigan State University, Department of Agricultural, Food, and Resource Economics. [Downloadable!]
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(explanations, 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.)

  1. Hudson, Darren, 2000. "Contracting In Agriculture: A Primer For Farm Lenders," Research reports 15789, Mississippi State University, Department of Agricultural Economics. [Downloadable!]
  2. Navajas, Roberto & Hinson, Roger A. & Pinel, Raul A., 2003. "Analyzing Linkages Between Nursery Farm Growth Rates, Structural Variables, And Firm Characteristics," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35125, Southern Agricultural Economics Association. [Downloadable!]
  3. Okello, Julius J. & Swinton, Scott M., 2005. "Compliance with International Food Safety Standards in Kenya's Green Bean Industry: A Paired Case Study of Small and Large Family Farms," 2005 Annual meeting, July 24-27, Providence, RI 19241, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Mansur, Kasim & Tola, Mansur & Ationg, Romzi, 2009. "Contract Farming System: A Tool to Tranforming Rural Society in Sabah," MPRA Paper 13271, University Library of Munich, Germany. [Downloadable!]
  5. Rehber, Erkan, 2000. "Vertical Coordination In The Agro-Food Industry And Contract Farming: A Comparative Study Of Turkey And The Usa," Research Reports 25225, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
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