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Safe gambles? Farmer perceptions of transactional certainty and risk-return tradeoffs in contract farming schemes in Southern India

Author Info

  • Sudha Narayanan

    ()

    (Indira Gandhi Institute of Development Research)

Abstract

This paper examines the idea that contract farming arrangements in developing countries even while offering farmers insurance against certain kinds of risks could simultaneously exacerbate other risks or entail new risks of their own. If correct, farmer perceptions of risks and returns would vary systematically across farmers with different contracting status and also across schemes. Using survey data that elicits subjective distributions of returns and psychometric mapping of risk perceptions from farmers, the study finds that contract farming, not unlike its alternatives, is associated with multiple dimensions of uncertainty and sources of risk, in ways that likely influence participation.

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File URL: http://www.igidr.ac.in/pdf/publication/WP-2012-021.pdf
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Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2012-021.

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Length: 54 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:ind:igiwpp:2012-021
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Keywords: contract farming; subjective distributions; risk perceptions; stochastic dominance; elicitation methods;

Find related papers by JEL classification:

  • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
  • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
  • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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Cited by:

  1. Michelson, Hope & Boucher, Stephen R. & Bai, Junfei & Jia, Xiangping & Huang, Jikun & Chen, Xinzhe, 2013. "Supermarket Supply Chains with Chinese Characteristics: The Case of Walmart's Direct Farms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150441, Agricultural and Applied Economics Association.

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