Contract Preferences of Smallholders: Evidence From a Study on Potato Production in Uzbekistan

Modernization and globalization of agri-food systems in developing countries are increasing the role of contractfarming. In most developing countries, smallholder farmers’ resource endowments are limited; they lack access tocredit, input and output markets and market information. While most available studies on contract farming concentrate onsmallholder farms in developing countries such as Asia, Latin America, and Africa, empirical research on smallholders’motivation to participate in contract farming in Central Asia is scarce. This paper explores preferences of smallholderfarmers for contract attributes in Uzbekistan where smallholder farmers dominate in the production of agricultural foodcrops. We employ conditional and mixed logit models to elicit smallholder potato producers’ preferences for contractualarrangements using a structured questionnaire for 180 potato growing smallholder farmers. The most important contractattributes are found to be price, payment method, input provision, and relation to the buyer. As the relation to a buyeris important for smallholders’ participation in contract farming, programs (such as local agri-fair) to link producers andretailers will be important.