IDEAS home Printed from https://ideas.repec.org/p/ags/aaea19/291286.html

Effects of marketing contracts and resource-providing contracts in the African small farm sector: Insights from oil palm production in Ghana

Author

Listed:
  • Ruml, Anette
  • Qaim, Matin

Abstract

Smallholder farmers in developing countries often suffer from high risk and limited market access. Contract farming may improve the situation under certain conditions. Several studies analyzed effects of contracts on smallholder productivity and income with mixed results. Most existing studies focused on one particular contract scheme. Contract characteristics rarely differ within one scheme, so little is known about how different contract characteristics may influence the benefits for smallholders. Here, we address this research gap using data from oil palm farmers in Ghana who participate in different contract schemes. Some of the farmers have simple marketing contracts, while others have resource-providing contracts where the buyer also offers inputs and technical services on credit. A comparison group cultivates oil palm without any contract. Regression models that control for selection bias show that resource-providing contracts increase farmers’ input use and yield. Resource-providing contracts also incentivize higher levels of specialization and an increase in the scale of production. These effects are especially pronounced for small and medium-sized farms. In contrast, the marketing contracts have no significant effects on input use, productivity, and scale of production. The results suggest that resource-providing contracts alleviate market access constraints, while simple marketing contracts do not in this context.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ruml, Anette & Qaim, Matin, "undated". "Effects of marketing contracts and resource-providing contracts in the African small farm sector: Insights from oil palm production in Ghana," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291286, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea19:291286
    DOI: 10.22004/ag.econ.291286
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/291286/files/Abstracts_19_05_08_06_29_57_89__134_76_138_181_0.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.291286?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
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ihli, Hanna & Seegers, Ronja & Winter, Etti & Chiputwa, Brian & Gassner, Anja, 2021. "Preferences for Tree-Fruit Market Attributes Among Smallholder Farmers in Eastern Rwanda: A Discrete Choice Experiment," 2021 Conference, August 17-31, 2021, Virtual 314980, International Association of Agricultural Economists.
    2. Frimpong, Stephen, 2024. "Against Democracy, Neo-totalitarianism, or What? A Cross-Country Dynamic Panel Endogenous Switching Regressing Analysis of Innovation, Economic Growth, and Political Stability," World Development Perspectives, Elsevier, vol. 36(C).
    3. Bethelhem Legesse Debela & Anette Ruml & Matin Qaim, 2022. "Effects of contract farming on diets and nutrition in Ghana," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 911-929, June.
    4. Ahmed Zainul Abideen & Veera Pandiyan Kaliani Sundram & Shahryar Sorooshian, 2023. "Scope for Sustainable Development of Small Holder Farmers in the Palm Oil Supply Chain—A Systematic Literature Review and Thematic Scientific Mapping," Logistics, MDPI, vol. 7(1), pages 1-24, January.
    5. 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.
    6. 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.
    7. Hanna Ihli & Ronja Seegers & Etti Winter & Brian Chiputwa & Anja Gassner, 2022. "Preferences for tree fruit market attributes among smallholder farmers in Eastern Rwanda," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 5-21, January.
    8. Ruml, Anette & Chrisendo, Daniel & Iddrisu, Abdul Malik & Karakara, Alhassan A. & Nuryartono, Nunung & Osabuohien, Evans & Lay, Jann, 2022. "Smallholders in agro-industrial production: Lessons for rural development from a comparative analysis of Ghana’s and Indonesia’s oil palm sectors," Land Use Policy, Elsevier, vol. 119(C).
    9. Anette Ruml & Martin C. Parlasca, 2022. "In‐kind credit provision through contract farming and formal credit markets," Agribusiness, John Wiley & Sons, Ltd., vol. 38(2), pages 402-425, April.
    10. 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.
    11. Abman, Ryan & Lundberg, Clark, 2022. "Market Access and Deforestation," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322251, Agricultural and Applied Economics Association.
    12. 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.
    13. Saroj & Kirtti Ranjan Paltasingh, 2024. "What promotes production contract in Indian agriculture? Managing market risk versus profit orientation," Agricultural Economics, International Association of Agricultural Economists, vol. 55(1), pages 140-153, January.
    14. Anette Ruml & Matin Qaim, 2021. "New evidence regarding the effects of contract farming on agricultural labor use," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 51-66, January.
    15. Kopp, Thomas & Dsouza, Alwin & Mishra, Ashok K., 2024. "The relation between contract type and market power: Evidence from a high-value crop in India," Food Policy, Elsevier, vol. 127(C).
    16. Yuyang Li & Jiahui Li & Xinjie Li & Qian Lu, 2025. "Income Effects and Mechanisms of Farmers’ Participation in Agricultural Industry Organizations: A Case Study of the Kiwi Fruit Industry," Agriculture, MDPI, vol. 15(13), pages 1-25, July.
    17. Abman, Ryan & Lundberg, Clark, 2024. "Contracting, market access and deforestation," Journal of Development Economics, Elsevier, vol. 168(C).
    18. Paul Aseete & Andrew Barkley & Enid Katungi & Michael Adrogu Ugen & Eliud Birachi, 2023. "Public–private partnership generates economic benefits to smallholder bean growers in Uganda," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(1), pages 201-218, February.
    19. Nkhubedu Magakwe & Oluwasogo Olorunfemi, 2024. "A Systematic Review of the Trends, Effects, and Deterrents of Collective Marketing Participation Among Smallholder Farmers in Sub-Saharan Africa," Sustainability, MDPI, vol. 16(21), pages 1-13, November.
    20. Janne Bemelmans & Miet Maertens, 2025. "Implementation and effectiveness of corporate-driven smallholder cocoa certification schemes in Indonesia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 13(1), pages 1-38, December.
    21. Zhihui Gao & Xinrui Liu & Xinling Zhang, 2024. "The Impact of Tie Strength on the Sustainable Participation of Farmers in Contract Farming: An Empirical Study in Inner Mongolia, China," Sustainability, MDPI, vol. 16(4), pages 1-17, February.
    22. Agus Dwi Nugroho, 2021. "Agricultural market information in developing countries: A literature review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(11), pages 468-477.
    23. Amir Karbassi Yazdi & Yong Tan & Cristi Spulbar & Ramona Birau & Jorge Alfaro, 2022. "An Approach for Supply Chain Management Contract Selection in the Oil and Gas Industry: Combination of Uncertainty and Multi-Criteria Decision-Making Methods," Mathematics, MDPI, vol. 10(18), pages 1-20, September.
    24. Widadie, Fanny & Wulandari, Eliana & Lestari, Retna Dewi, . "Business models for engaging smallholder farmers in high-value markets: empirical evidence from vegetable value chains," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 10(4).
    25. Ruml, Anette & Chrisendo, Daniel & Osabuohien, Evans & Karakara, Alhassan & Iddrisu, Abdul Malik & Lay, Jann, 2021. "Smallholders in Agro-Industrial Production: Lessons from Rural Development at New Frontiers from a Comparative Analysis of Ghana’s and Indonesia’s Oil Palm Sectors," 2021 Conference, August 17-31, 2021, Virtual 315162, International Association of Agricultural Economists.

    More about this item

    Keywords

    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:aaea19:291286. 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.

    We have no bibliographic references for this item. You can help adding them by using 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://edirc.repec.org/data/aaeaaea.html .

    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.