Improving farm-to-market linkages through contract farming: A case study of smallholder dairying in India
Abstract"Contract farming is emerging as an important form of vertical coordination in the agrifood supply chain in India, and its socioeconomic consequences are attracting considerable attention in public policy debates. This study is an empirical assessment of the costs and benefits of contract farming in milk using information generated through field surveys in the western state of Rajasthan. Contract farming is found to be more profitable than independent production. Its major benefits come from a reduction in marketing and transaction costs, which are otherwise much higher in the open markets. Contract farming also contributes toward improving milk yield and reducing production costs, albeit not significantly. Dairy producers also benefit from provision of services and technical advice by integrators/firms who secure milk supplies from farmers through contract. The benefits of contract farming vary by scale of operation. Economies of scale are also important determinants of competitiveness, in which large farms (both contract and independent) have lower per unit cost due to buying of inputs in bulk and greater access to markets. Smallholders, on the other hand, derive significant benefits from a reduction in marketing and transaction costs due to their participation in contract farming." from authors' abstract
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 814.
Date of creation: 2008
Date of revision:
Contract farming; smallholder dairying in India; marketing and transaction costs; milk supply chain; treatment effects model; mass balance approach;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-11-04 (Agricultural Economics)
- NEP-ALL-2008-11-04 (All new papers)
- NEP-CWA-2008-11-04 (Central & Western Asia)
- NEP-MKT-2008-11-04 (Marketing)
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.:
- Birthal, Pratap S. & Joshi, P. K. & Gulati, Ashok, 2005. "Vertical coordination in high-value commodities," MTID discussion papers 85, International Food Policy Research Institute (IFPRI).
- Delgado, Christopher L. & Rosegrant, Mark W. & Steinfeld, Henning & Ehui, Simeon K. & Courbois, Claude, 1999.
"Livestock to 2020: the next food revolution,"
2020 vision briefs
61, International Food Policy Research Institute (IFPRI).
- Ramaswami, Bharat & Birthal, Pratap Singh & Joshi, P.K., 2006.
"Efficiency and distribution in contract farming: the case of Indian poultry growers,"
MTID discussion papers
91, International Food Policy Research Institute (IFPRI).
- Bharat Ramaswami & Pratap Singh Birthal & P.K. Joshi, 2005. "Efficiency and distribution in contract farming:The case of Indian poultry growers," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 05-01, Indian Statistical Institute, New Delhi, India.
- Delgado, Christopher L. & Narrod, Clare A. & Tiongco, Marites M. & Barros, Geraldo Sant'Ana de Camargo & Catelo, Maria Angeles & Costales, Achilles & Mehta, Rajesh & Naranong, Viroj & Poapongsakorn, N, 2008. "Determinants and implications of the growing scale of livestock farms in four fast-growing developing countries:," Research reports 157, International Food Policy Research Institute (IFPRI).
- Patrick, Ian, 2004. "Contract farming in Indonesia: Smallholders and agribusiness working together," Technical Reports 113792, Australian Centre for International Agricultural Research.
- Davis, Junior, 2006. "How can the poor benefit from the growing markets for high value agricultural products?," MPRA Paper 26048, University Library of Munich, Germany.
- Holloway, Garth & Nicholson, Charles & Delgado, Chris & Staal, Steve & Ehui, Simeon, 2000. "Agroindustrialization through institutional innovation: Transaction costs, cooperatives and milk-market development in the east-African highlands," Agricultural Economics, Blackwell, vol. 23(3), pages 279-288, September.
- Joshi, P.K. & Gulati, Ashok & Birthal, Pratap S. & Tewari, Laxmi, 2003. "Agriculture diversification in South Asia," MSSD discussion papers 57, International Food Policy Research Institute (IFPRI).
- Varadan, R. Jayakumara & Kumar, Pramod, 2012. "Impact of Crop Insurance on Rice Farming in Tamil Nadu," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 25(2).
- S. Mahendra Dev, 2012. "Small farmers in India: Challenges and opportunities," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-014, Indira Gandhi Institute of Development Research, Mumbai, India.
- S. Mahendra Dev, 2012. "Small Farmers in India: Challenges and Opportunities," Working Papers id:5037, eSocialSciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.