Determinant in Intensity of Farmers’ Participation in Contract Farming

Abstract

This article examines the intensity of farmers’ participation in contract farming by estimating the allocation of land and family labour for the contract and non-contract crops. In addition, factors that influence farmers’ decision to allocate land for the contract crop was identified. The analysis of this article is based on 159 households of Telangana state. The empirical results indicated that farmer is likely to employ proportionately more family labour for contract crop compared to non-contract ones. Small farmers proportionately allocate more land and family labour for the contract crop compared to large ones. Landholding size, education and income have influenced farmers’ decision to allocate land for growing gherkin, while it is landholding size, family size and income in case of hybrid paddy seed. To increase participation of small farmers, focus should be given to improve the education level and increase the landholding size through implementation of proper land policy.