Determinants of contract farming in barley production – Regression tree approach

Abstract

Barley, a nutri-rich cereal is gaining momentum among stakeholders owing to multiple health benefits but the concern is its declining area, possibly attributed to lack of market and competitive pricing strategy. Amongst alternatives, contract farming is widely suggested for better price realisation and assured market. In the context, the present study was carried out during 2013-15 in four major barley growing states in India, viz. Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh for identifying the determinants of contract farming from a sample of 400 randomly selected farmers using regression tree approach. Findings indicated that the average yield of farmers enrolled in contract farming was 4791 kg/ha (n=90) against non-contractors with an estimated yield of 3549 kg/ha (n=310), implying a yield advantage of 35%. The practice of enrollment into contracts was popular in Rajasthan as corroborated by regression tree. The analysis also indicated that farm size, seed replacement behaviour, source of seed and area under barley were turned as deciding factors in contract enrollment. Overall, the study indicated that region plays a prominent role in enrollment into contracts despite multiple benefits availed. The study advocates barley growers to take advantage of contract farming, especially small-holders to enroll into contracts for mitigating price risk apart from self-empowerment in barley production.