IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article

As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming

  • Bellemare, Marc F.

Contract farming is widely perceived as a means of increasing welfare in developing countries. Because of smallholder self-selection in contract farming, however, it is not clear whether contract farming actually increases grower welfare. In an effort to improve upon existing estimates of the welfare impacts of contract farming, this paper uses the results of a contingent-valuation experiment to control for unobserved heterogeneity among smallholders. Using data across several regions, firms, and crops in Madagascar, results indicate that a 1-percent increase in the likelihood of participating in contract farming is associated with a 0.5-percent increase in household income, among other positive impacts.

If 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.

File URL: http://www.sciencedirect.com/science/article/pii/S0305750X11003111
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 7 ()
Pages: 1418-1434

as
in new window

Handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1418-1434
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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.:

as in new window
  1. John A. List & Sally Sadoff & Mathis Wagner, 2009. "So you want to run an experiment, now what? Some Simple Rules of Thumb for Optimal Experimental Design," Carlo Alberto Notebooks 125, Collegio Carlo Alberto.
  2. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
  3. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Working Papers 984, Economic Growth Center, Yale University.
  4. Singh, Sukhpal, 2002. "Contracting Out Solutions: Political Economy of Contract Farming in the Indian Punjab," World Development, Elsevier, vol. 30(9), pages 1621-1638, September.
  5. Miet Maertens & Johan F.M. Swinnen, 2006. "Trade, Standards, and Poverty: Evidence from Senegal," LICOS Discussion Papers 17706, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  6. Minot, Nicholas, 1986. "Contract Farming and Its Effect on Small Farmers in Less Developed Countries," Food Security International Development Working Papers 54740, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  7. Masahide Watanabe, 2010. "Nonparametric Estimation of Mean Willingness to Pay from Discrete Response Valuation Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1114-1135.
  8. Marc F. Bellemare, 2010. "Agricultural extension and imperfect supervision in contract farming: evidence from Madagascar," Agricultural Economics, International Association of Agricultural Economists, vol. 41(6), pages 507-517, November.
  9. Bellemare, Marc F. & Barrett, Christopher B., 2005. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," Working Papers 14748, Cornell University, Department of Applied Economics and Management.
  10. Bryan J. Hubbell & Michele C. Marra & Gerald A. Carlson, 2000. "Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 118-132.
  11. Hubbell, Bryan J. & Marra, Michele C. & Carlson, Gerald A., 2000. "Estimating The Demand For A New Technology: Bt Cotton And Insecticide Policies In The Southeast," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26016, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  12. Bart Minten & Lalaina Randrianarison & Johan F.M. Swinnen, 2006. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," LICOS Discussion Papers 16406, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  13. Porter, Gina & Phillips-Howard[malt], Kevin, 1997. "Comparing contracts: An evaluation of contract farming schemes in Africa," World Development, Elsevier, vol. 25(2), pages 227-238, February.
  14. M. Keith Chen, 2008. "Rationalization and Cognitive Dissonance: Do Choices Affect or Reflect Preferences?," Cowles Foundation Discussion Papers 1669, Cowles Foundation for Research in Economics, Yale University.
  15. Stefan Dercon, 2005. "Risk, Poverty and Vulnerability in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(4), pages 483-488, December.
  16. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," American Economic Review, American Economic Association, vol. 80(3), pages 313-36, June.
  17. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
  18. Philip McMichael, 2009. "A food regime analysis of the ‘world food crisis’," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 26(4), pages 281-295, December.
  19. 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.
  20. Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Papers 0096, Boston University - Industry Studies Programme.
  21. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
  22. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records: Errata," American Economic Review, American Economic Association, vol. 80(5), pages 1284-86, December.
  23. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
  24. Cameron, Trudy Ann & James, Michelle D, 1987. "Efficient Estimation Methods for "Closed-ended' Contingent Valuation Surveys," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 269-76, May.
  25. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
  26. Miyata, Sachiko & Minot, Nicholas & Hu, Dinghuan, 2007. "Impact of contract farming on income: Linking small farmers, packers, and supermarket in China," IFPRI discussion papers 742, International Food Policy Research Institute (IFPRI).
  27. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  28. Vossler, Christian A. & Kerkvliet, Joe, 2003. "A criterion validity test of the contingent valuation method: comparing hypothetical and actual voting behavior for a public referendum," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 631-649, May.
  29. repec:feb:framed:0075 is not listed on IDEAS
  30. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  31. repec:feb:artefa:0096 is not listed on IDEAS
  32. 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.
  33. 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.
  34. repec:feb:natura:0057 is not listed on IDEAS
  35. David Stifel & Felix Forster & Christopher B. Barrett, 2010. "The Evolution of Groupwise Poverty in Madagascar, 1999--2005-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(4), pages 559-604, August.
  36. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1418-1434. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.