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Overview of smallholder contract farming in developing countries

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  • Simmons, Paul

Abstract

An agribusiness firm's choice to expand activities through contract farming rather than plantations, buying directly from open markets or other means reflects differences in transaction costs found in different types of procurement systems. Smallholders may enter contracts to reduce transaction costs of accessing new markets, borrowing, managing risk, acquiring information or increasing employment opportunities. The success of contracts reflects both the contracting environment and management practices. The contracting environment includes the strength of markets for contracted output, government macro policies, technical sophistication in production and attenuation of land ownership while important management elements are farm groups, selection of participants for contracts, managing contract default and conflict resolution.

Suggested Citation

  • Simmons, Paul, 2002. "Overview of smallholder contract farming in developing countries," ESA Working Papers 289109, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
  • Handle: RePEc:ags:faoaes:289109
    DOI: 10.22004/ag.econ.289109
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    File URL: http://ageconsearch.umn.edu/record/289109/files/a-ae023t.pdf
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    Citations

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    Cited by:

    1. repec:oup:apecpp:v:40:y:2018:i:3:p:379-401. is not listed on IDEAS
    2. Nolte, Kerstin & Ostermeier, Martin, 2017. "Labour Market Effects of Large-Scale Agricultural Investment: Conceptual Considerations and Estimated Employment Effects," World Development, Elsevier, vol. 98(C), pages 430-446.
    3. W.O. Chamberlain & W. Anseeuw, 2017. "Contract Farming as Part of a Multi-Instrument Inclusive Business Structure: A Theoretical Analysis," Agrekon, Taylor & Francis Journals, vol. 56(2), pages 158-172, April.
    4. 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.
    5. Curtiss, Jarmila, 2012. "Determinants of Financial Capital Use: Review of theories and implications for rural businesses," Factor Markets Working Papers 123, Centre for European Policy Studies.
    6. Swati Dhingra, 2016. "Piggy-Back Exporting, Intermediation, and the Distributional Gains from Trade in Agricultural Markets," 2016 Meeting Papers 712, Society for Economic Dynamics.
    7. Xolile Mamba, Tangetile, 2016. "The role of contracts in improving access to credit in the smallholder livestock sector of Swaziland," Research Theses 243472, Collaborative Masters Program in Agricultural and Applied Economics.
    8. Giuliano Martiniello & Ricardo Azambuja, 2019. "Contracting Sugarcane Farming in Global Agricultural Value Chains in Eastern Africa: Debates, Dynamics, and Struggles," Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, vol. 8(1-2), pages 208-231, April.
    9. Curtiss, Jarmila, 2012. "Determinants of Financial Capital Use: Review of theories and implications for rural businesses," Working papers 122846, Factor Markets, Centre for European Policy Studies.

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