IDEAS home Printed from https://ideas.repec.org/a/ags/ajfand/340705.html

Impact of contract farming on the income of smallholder dairy farmers from Nyagatare district in the Eastern Province of Rwanda

Author

Listed:
  • Ntaganira, E
  • Taremwa, NK
  • Majiwa, E
  • Niyitanga, F
  • Uwimana, P

Abstract

The demand for dairy milk and its products is projected to increase significantly in the developing countries by the year 2030. Globally, close to 6 billion people consume milk and other dairy products due to rising earnings, population expansion, urbanization, and dietary changes. The projected increase in demand for dairy milk and its products thus requires enhanced productivity by the dairy farmers. However, dairy farming is relatively capital intensive which requires dairy farmers to have disposal income to run the venture. Contract farming is gradually being embraced in Rwanda as a viable option to help farmers increase dairy productivity. The impact of contract farming on dairy farmers’ incomes is however not well documented in the Rwandan context. Thus, the purpose of this study was to assess the impact of contract farming on smallholder dairy farmers’ income in Rwanda among smallholders’ dairy farmers in Nyagatare District. Following the stratification and purposive sampling of two sectors, random sampling of two villages from each of those sectors allowed for the systematic and purposive sampling of representative households and farmers. Data from 214 smallholder dairy farmers were collected using structured interviews and document reviews. The multivariate logistic analysis and propensity score matching was used for data analysis in Stata Version 15. The findings showed that smallholder dairy farmers adopting contract farming earned on average 135,000 RWF (135$) more than their non-adopter counterparts. Further, contract farming was found to have a significant positive impact on income among smallholder dairy farmers in Nyagatare district. However, the impact of contract farming on farmer incomes could be further augmented by increasing the heads of cattle owned per farmer, to at least more than 30. Government intervention is one way to achieve this. The government, in collaboration with businesses like Heifer International, can give heifers to smallscale dairy farmers.

Suggested Citation

  • Ntaganira, E & Taremwa, NK & Majiwa, E & Niyitanga, F & Uwimana, P, 2023. "Impact of contract farming on the income of smallholder dairy farmers from Nyagatare district in the Eastern Province of Rwanda," African Journal of Food, Agriculture, Nutrition and Development (AJFAND), African Journal of Food, Agriculture, Nutrition and Development (AJFAND), vol. 23(5), May.
    • Handle: RePEc:ags:ajfand:340705
    DOI: 10.22004/ag.econ.340705
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/340705/files/Taremwa.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.340705?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bellemare, Marc F. & Bloem, Jeffrey R., 2018. "Does contract farming improve welfare? A review," World Development, Elsevier, vol. 112(C), pages 259-271.
    2. Ragasa, Catherine & Lambrecht, Isabel & Kufoalor, Doreen S., 2018. "Limitations of Contract Farming as a Pro-poor Strategy: The Case of Maize Outgrower Schemes in Upper West Ghana," World Development, Elsevier, vol. 102(C), pages 30-56.
    3. Arouna, Aminou & Michler, Jeffrey D. & Lokossou, Jourdain C., 2021. "Contract farming and rural transformation: Evidence from a field experiment in Benin," Journal of Development Economics, Elsevier, vol. 151(C).
    4. Odountan Ambaliou Olounlade & Gu-Cheng Li & Sènakpon E. Haroll Kokoye & François Vihôdé Dossouhoui & Kuassi Auxence Aristide Akpa & Dessalegn Anshiso & Gauthier Biaou, 2020. "Impact of Participation in Contract Farming on Smallholder Farmers’ Income and Food Security in Rural Benin: PSM and LATE Parameter Combined," Sustainability, MDPI, vol. 12(3), pages 1-19, January.
    5. 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.
    6. Schneider, Julia M. & Zabel, Florian & Schünemann, Franziska & Delzeit, Ruth & Mauser, Wolfram, 2022. "Global cropland could be almost halved: Assessment of land saving potentials under different strategies and implications for agricultural markets," Open Access Publications from Kiel Institute for the World Economy 253265, Kiel Institute for the World Economy.
    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. Fitawek, Wegayehu & Hendriks, Sheryl L., 2023. "The role of contract farming on household food security in Kenya and Madagascar," 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa 365943, African Association of Agricultural Economists (AAAE).
    2. Richard Kwasi Bannor & Yaw Gyekye, 2022. "Unpacking The Nexus Between Broiler Contract Farming and Its Impact in Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2759-2786, December.
    3. Anette Ruml & Catherine Ragasa & Matin Qaim, 2022. "Contract farming, contract design and smallholder livelihoods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(1), pages 24-43, January.
    4. Mai Chiem Tuyen & Prapinwadee Sirisupluxana & Isriya Bunyasiri & Pham Xuan Hung, 2022. "Perceptions, Problems and Prospects of Contract Farming: Insights from Rice Production in Vietnam," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    5. Otsuka, Keijiro & Ali, Mubarik, 2020. "Strategy for the development of agro-based clusters," World Development Perspectives, Elsevier, vol. 20(C).
    6. Awal Abdul‐Rahaman & Gazali Issahaku & Wanglin Ma, 2023. "Agrifood system participation and production efficiency among smallholder vegetable farmers in Northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 812-835, July.
    7. Koudima Bokoumbo & Mikémina Pilo & Magnan Petit Katanlé Kasseba, 2025. "Contract farming and sustainability: the case of organic soybean producers in Togo," SN Business & Economics, Springer, vol. 5(7), pages 1-28, July.
    8. Tabe-Ojong, Martin Paul Jr. & Abay, Kibrom A., 2023. "Smallholder farmers’ participation in profitable value chains and contract farming: Evidence from irrigated agriculture in Egypt," 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa 365884, African Association of Agricultural Economists (AAAE).
    9. 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.
    10. Nguyen, Thi Cam Van & Magezi, Eustadius Francis & Sumita, Tsuyoshi, 2023. "Inclusion of Smallholders in Staple Food Contract Farming: A Case of Firm-Cooperative-Farmer Coordination in Thai Binh Province, Vietnam," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 25.
    11. Saparova, Gulkaiyr & Khan, Ghulam Dastgir & Joshi, Niraj Prakash, 2024. "Linking farmers to markets: Assessing small-scale farmers' preferences for an official phytosanitary regime in the Kyrgyz Republic," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 696-708.
    12. Ayeduvor Selorm & D. B. S. Sarpong & Irene S. Egyir & Akwasi Mensah Bonsu & Henry An, 2023. "Does contract farming affect technical efficiency? Evidence from soybean farmers in Northern Ghana," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-22, December.
    13. Viet Hoang & Vinh Nguyen, 2023. "Determinants of small farmers' participation in contract farming in developing countries: A study in Vietnam," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 836-853, July.
    14. Shinya Ikeda & Ronnie S. Natawidjaja, 2022. "The Sustainability of Contract Farming with Specialized Suppliers to Modern Retailers: Insights from Vegetable Marketing in Indonesia," Agriculture, MDPI, vol. 12(3), pages 1-11, March.
    15. Kuijpers, Rob, 2020. "Integrated Value Chain Development: Evidence from Bangladesh," Food Policy, Elsevier, vol. 97(C).
    16. Ruml, Anette & Qaim, Matin, 2020. "Effects of marketing contracts and resource-providing contracts in the African small farm sector: Insights from oil palm production in Ghana," World Development, Elsevier, vol. 136(C).
    17. Jacopo Bonan & Harounan Kazianga & Mariapia Mendola, 2019. "Agricultural Transformation and Farmers' Expectations: Experimental Evidence from Uganda," Development Working Papers 458, Centro Studi Luca d'Agliano, University of Milano.
    18. Mai Chiem Tuyen & Prapinwadee Sirisupluxana & Isriya Bunyasiri & Pham Xuan Hung, 2022. "Stakeholders’ Preferences towards Contract Attributes: Evidence from Rice Production in Vietnam," Sustainability, MDPI, vol. 14(6), pages 1-21, March.
    19. Pierre Marion & Etienne Lwamba & Andrea Floridi & Suvarna Pande & Megha Bhattacharyya & Sarah Young & Paul Fenton Villar & Shannon Shisler, 2024. "The effects of agricultural output market access interventions on agricultural, socio‐economic, food security, and nutrition outcomes in low‐ and middle‐income countries: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 20(2), June.
    20. 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.

    More about this item

    Keywords

    ;

    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:ags:ajfand:340705. 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: AgEcon Search (email available below). General contact details of provider: https://www.ajfand.net/ .

    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.