IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v104y2018icp46-64.html
   My bibliography  Save this article

Contract farming for improving smallholder incomes: What can we learn from effectiveness studies?

Author

Listed:
  • Ton, Giel
  • Vellema, Wytse
  • Desiere, Sam
  • Weituschat, Sophia
  • D'Haese, Marijke

Abstract

Contract farming is a sales arrangement between a farmer and a firm, agreed before production begins, which provides the farmer with resources or services. Many governments and donors promote contract farming as part of agricultural development policies. However, there is serious concern whether smaller farmers can benefit from these arrangements.

Suggested Citation

  • Ton, Giel & Vellema, Wytse & Desiere, Sam & Weituschat, Sophia & D'Haese, Marijke, 2018. "Contract farming for improving smallholder incomes: What can we learn from effectiveness studies?," World Development, Elsevier, vol. 104(C), pages 46-64.
  • Handle: RePEc:eee:wdevel:v:104:y:2018:i:c:p:46-64
    DOI: 10.1016/j.worlddev.2017.11.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X17303777
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2017.11.015?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Maertens, Miet & Vande Velde, Katrien, 2017. "Contract-farming in Staple Food Chains: The Case of Rice in Benin," World Development, Elsevier, vol. 95(C), pages 73-87.
    2. John P A Ioannidis, 2005. "Why Most Published Research Findings Are False," PLOS Medicine, Public Library of Science, vol. 2(8), pages 1-1, August.
    3. Wendimu, Mengistu Assefa & Henningsen, Arne & Gibbon, Peter, 2016. "Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor?," World Development, Elsevier, vol. 83(C), pages 84-97.
    4. Warning, Matthew & Key, Nigel, 2002. "The Social Performance and Distributional Consequences of Contract Farming: An Equilibrium Analysis of the Arachide de Bouche Program in Senegal," World Development, Elsevier, vol. 30(2), pages 255-263, February.
    5. Marc F. Bellemare & Lindsey Novak, 2017. "Contract Farming and Food Security," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 357-378.
    6. Wainaina, Priscilla W. & Okello, Julius J. & Nzuma, Jonathan M., 2014. "Blessing or Evil? Contract Farming, Smallholder Poultry Production and Household Welfare in Kenya," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 53(4), pages 1-22, November.
    7. Maertens, Miet & Swinnen, Johan F.M., 2009. "Trade, Standards, and Poverty: Evidence from Senegal," World Development, Elsevier, vol. 37(1), pages 161-178, January.
    8. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
    9. 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.
    10. Keijiro Otsuka & Yuko Nakano & Kazushi Takahashi, 2016. "Contract Farming in Developed and Developing Countries," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 353-376, October.
    11. Sue Duval & Richard Tweedie, 2000. "Trim and Fill: A Simple Funnel-Plot–Based Method of Testing and Adjusting for Publication Bias in Meta-Analysis," Biometrics, The International Biometric Society, vol. 56(2), pages 455-463, June.
    12. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "Supermarkets, Farm Household Income, and Poverty: Insights from Kenya," World Development, Elsevier, vol. 39(5), pages 784-796, May.
    13. Anh Tru Nguyen & Janet Dzator & Andrew Nadolny, 2015. "Does contract farming improve productivity and income of farmers? A review of theory and evidence," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(5), pages 531-538, Special I.
    14. Escobal, Javier A. & Cavero, Denice, 2012. "Transaction Costs, Institutional Arrangements and Inequality Outcomes: Potato Marketing by Small Producers in Rural Peru," World Development, Elsevier, vol. 40(2), pages 329-341.
    15. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2012. "Smallholder Participation in Contract Farming: Comparative Evidence from Five Countries," World Development, Elsevier, vol. 40(4), pages 715-730.
    16. Chege, Christine G.K. & Andersson, Camilla I.M. & Qaim, Matin, 2015. "Impacts of Supermarkets on Farm Household Nutrition in Kenya," World Development, Elsevier, vol. 72(C), pages 394-407.
    17. Ragin, Charles C., 2000. "Fuzzy-Set Social Science," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226702773, September.
    18. Christin Schipmann & Matin Qaim, 2010. "Spillovers from modern supply chains to traditional markets: product innovation and adoption by smallholders," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 361-371, May.
    19. Minten, Bart & Randrianarison, Lalaina & Swinnen, Johan F.M., 2009. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," World Development, Elsevier, vol. 37(11), pages 1728-1741, November.
    20. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    21. McKenzie, David, 2012. "Beyond baseline and follow-up: The case for more T in experiments," Journal of Development Economics, Elsevier, vol. 99(2), pages 210-221.
    22. Camilla I.M. Andersson & Christine G.K. Chege & Elizaphan J.O. Rao & Matin Qaim, 2015. "Following Up on Smallholder Farmers and Supermarkets in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(4), pages 1247-1266.
    23. Key, Nigel & Runsten, David, 1999. "Contract Farming, Smallholders, and Rural Development in Latin America: The Organization of Agroprocessing Firms and the Scale of Outgrower Production," World Development, Elsevier, vol. 27(2), pages 381-401, February.
    24. Ochieng, Dennis O. & Veettil, Prakashan C. & Qaim, Matin, 2017. "Farmers’ preferences for supermarket contracts in Kenya," Food Policy, Elsevier, vol. 68(C), pages 100-111.
    25. H. Holly Wang & Yanbing Wang & Michael S. Delgado, 2014. "The Transition to Modern Agriculture: Contract Farming in Developing Economies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1257-1271.
    26. Sokchea, An & Culas, Richard J., 2015. "Impact of Contract Farming with Farmer Organizations on Farmers’ Income: A Case Study of Reasmey Stung Sen Agricultural Development Cooperative in Cambodia," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 23, March.
    27. Girma, Jony & Gardebroek, Cornelis, 2015. "The impact of contracts on organic honey producers' incomes in southwestern Ethiopia," Forest Policy and Economics, Elsevier, vol. 50(C), pages 259-268.
    28. Miyata, Sachiko & Minot, Nicholas & Hu, Dinghuan, 2009. "Impact of Contract Farming on Income: Linking Small Farmers, Packers, and Supermarkets in China," World Development, Elsevier, vol. 37(11), pages 1781-1790, November.
    29. Narayanan, Sudha, 2014. "Profits from participation in high value agriculture: Evidence of heterogeneous benefits in contract farming schemes in Southern India," Food Policy, Elsevier, vol. 44(C), pages 142-157.
    30. Oliver E. Williamson, 2003. "Examining economic organization through the lens of contract," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(4), pages 917-942, August.
    31. Snilstveit, Birte & Vojtkova, Martina & Bhavsar, Ami & Gaarder, Marie, 2013. "Evidence gap maps -- a tool for promoting evidence-informed policy and prioritizing future research," Policy Research Working Paper Series 6725, The World Bank.
    32. Bellemare, Marc F., 2012. "As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming," World Development, Elsevier, vol. 40(7), pages 1418-1434.
    33. Paul Winters & Phil Simmons & Ian Patrick, 2005. "Evaluation of a Hybrid Seed Contract between Smallholders and a Multinational Company in East Java, Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 62-89.
    34. Sam Jones & Peter Gibbon, 2011. "Developing Agricultural Markets in Sub-Saharan Africa: Organic Cocoa in Rural Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 47(10), pages 1595-1618.
    35. Phil Simmons & Paul Winters & Ian Patrick, 2005. "An analysis of contract farming in East Java, Bali, and Lombok, Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 513-525, November.
    36. Bharat Ramaswami & Pratap Singh Birthal & P.K. Joshi, 2009. "Grower heterogeneity and the gains from contract farming," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 2(1), pages 56-74, April.
    37. Bolwig, Simon & Gibbon, Peter & Jones, Sam, 2009. "The Economics of Smallholder Organic Contract Farming in Tropical Africa," World Development, Elsevier, vol. 37(6), pages 1094-1104, June.
    38. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    39. repec:ucp:bkecon:9780226702766 is not listed on IDEAS
    40. Thomas Reardon & Julio A. Berdegué, 2002. "The Rapid Rise of Supermarkets in Latin America: Challenges and Opportunities for Development," Development Policy Review, Overseas Development Institute, vol. 20(4), pages 371-388, September.
    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. Bellemare, Marc F. & Bloem, Jeffrey R., 2018. "Does contract farming improve welfare? A review," World Development, Elsevier, vol. 112(C), pages 259-271.
    2. Ton, Giel & Vellema, Wytse & Desiere, Sam & Weituschat, Sophia & D’Haese, Marijke, 2016. "Effectiveness of contract farming for improving income of smallholder farmers-Preliminary results of a systematic review," 149th Seminar, October 27-28, 2016, Rennes, France 244792, European Association of Agricultural Economists.
    3. Viet Hoang, 2021. "Impact of Contract Farming on Farmers’ Income in the Food Value Chain: A Theoretical Analysis and Empirical Study in Vietnam," Agriculture, MDPI, vol. 11(8), pages 1-16, August.
    4. 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.
    5. Bhanot, Disha & Kathuria, Vinish & Das, Debabrata, 2021. "Can institutional innovations in agri-marketing channels alleviate distress selling? Evidence from India," World Development, Elsevier, vol. 137(C).
    6. 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.
    7. Maertens, Miet & Vande Velde, Katrien, 2017. "Contract-farming in Staple Food Chains: The Case of Rice in Benin," World Development, Elsevier, vol. 95(C), pages 73-87.
    8. 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).
    9. Bellemare, Marc F. & Lee, Yu Na & Novak, Lindsey, 2021. "Contract farming as partial insurance," World Development, Elsevier, vol. 140(C).
    10. Nhan, Tran Quoc & Gillette, Raulston & Yutaka, Tomoyuki & Can, Nguyen Duy, 2020. "Impact of Outgrower Scheme on Yield,Output Price,and Income: A Rice-Farm-Level Study in the Mekong Delta,Vietnam," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 61(1), pages 1-19, June.
    11. repec:oup:apecpp:v:40:y:2018:i:3:p:379-401. is not listed on IDEAS
    12. Soullier, Guillaume & Moustier, Paule, 2018. "Impacts of contract farming in domestic grain chains on farmer income and food insecurity. Contrasted evidence from Senegal," Food Policy, Elsevier, vol. 79(C), pages 179-198.
    13. Marc F. Bellemare, 2018. "Contract farming: opportunity cost and trade†offs," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 279-288, May.
    14. Delelegne A. Tefera & Jos Bijman, 2021. "Economics of contracts in African food systems: evidence from the malt barley sector in Ethiopia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-21, December.
    15. Benali, Marwan & Brümmer, Bernhard & Afari-Sefa, Victor, 2017. "Small producer participation in export vegetable supply chains and poverty: evidence from different export schemes in Tanzania," GlobalFood Discussion Papers 262583, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    16. Adu-Gyamfi Poku & Regina Birner & Saurabh Gupta, 2018. "Making Contract Farming Arrangements Work in Africa’s Bioeconomy: Evidence from Cassava Outgrower Schemes in Ghana," Sustainability, MDPI, vol. 10(5), pages 1-21, May.
    17. Briones, Roehlano M., 2015. "Small Farmers in High-Value Chains: Binding or Relaxing Constraints to Inclusive Growth?," World Development, Elsevier, vol. 72(C), pages 43-52.
    18. Ochieng, Dennis O. & Veettil, Prakashan C. & Qaim, Matin, 2017. "Farmers’ preferences for supermarket contracts in Kenya," Food Policy, Elsevier, vol. 68(C), pages 100-111.
    19. Neda Trifković, 2014. "Governance Strategies and Welfare Effects: Vertical Integration and Contracts in the Catfish Sector in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 50(7), pages 949-961, July.
    20. 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).
    21. Ba, Hélène A. & de Mey, Yann & Thoron, Sylvie & Demont, Matty, 2019. "Inclusiveness of contract farming along the vertical coordination continuum: Evidence from the Vietnamese rice sector," Land Use Policy, Elsevier, vol. 87(C).

    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:eee:wdevel:v:104:y:2018:i:c:p:46-64. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    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.