Contract Farming Research Articles

Effects of dairy contract farming on the smallholder farmer income: a case from dairy farming in Ethiopia

Effects of dairy contract farming on the smallholder farmer income: a case from dairy farming in Ethiopia

Farmer’s literacy and contract farming participation in Tanzania’s cash crops agriculture: application of human capital theory

Farmer’s literacy and contract farming participation in Tanzania’s cash crops agriculture: application of human capital theory

Factors influencing the entrepreneurial behaviour of the contract and non-contract farmers in Haveri district

Factors influencing the entrepreneurial behaviour of the contract and non-contract farmers in Haveri district

Key drivers behind contract farming engagement decisions in Tanzania: empowering sorghum farmers

Key drivers behind contract farming engagement decisions in Tanzania: empowering sorghum farmers

From bean to market: exploring the chemical and production dynamics of high-quality Indonesian vanilla

Indonesia’s vanilla industry requires continuous efforts to enhance its quality and safety to ensure its sustainability. The objective of this research is to identify the chemical composition, production constraints, and post-harvest practices impacting vanilla quality. This research investigates the quality of Indonesian vanilla through in-depth interviews with vanilla growers and exporters, as well as quality analysis in the laboratory. Purposive sampling targeted key producers across seven provinces from May to August 2023. Vanilla samples were collected for chemical analysis after a direct interview with each producer. The result shows that the physical and chemical qualities of vanilla products fulfill Indonesian standards (SNI). The vanillin content ranged from 1.21 to 3.50. Establishing universal standards requires considering various vanilla varieties and determining minimum quality attribute values. Due to the risk of theft, vanilla pods are often picked when they are less than 9 months old, before the fruit is fully ripe. This practice results in a drop in quality, particularly in vanillin concentration. Sustainable growth, stakeholder involvement, inclusive business models, education, and contract farming arrangements help navigate challenges like theft and premature harvesting. Advancements in processing methodologies and the selection of clonal materials reinforce the industry’s commitment to enhancing quality.

Contract Farming in Low and Lower-Middle-Income Countries: Using Meta-Analysis and Factor Analysis

Purpose: Smallholder farmers' agriculture in developing countries particularly in low and lower-middle-income countries is known for poor production and productivity levels which has been related to the inadequate use of improved agricultural inputs and marketing systems, and in this case, contract farming. Therefore, this study aimed to investigate the various factors which affect contract farming among smallholder farmers in developing countries. However, trying to investigate those contract farming determinants by a single analytical method leads it to have limited findings, narrowed generalizability and difficulty in investigating major determinants that determine contract farming success. Therefore, a joint approach using factor analysis and meta-analysis can give a more comprehensive understanding of contract farming factors. Methodology: The data was gathered through a Systematic Literature Review, finding a total of 3007 studies from SCOPUS, PubMed, PubAg, and EMBASE. The PRISMA method was applied to, and finally, 35 peer-reviewed articles in English between January 1990 to September 2023 were selected. Findings: The meta-analysis showed interesting insights into factors influencing contract farming participation. Education and household size exhibited a negative association, suggesting that farmers with higher education levels and larger families may be less likely to participate in contract farming arrangements. This could be due to a preference for independent decision-making or the need for family labor in alternative income-generating activities. On the other hand, farmers with larger landholdings are more inclined to participate. To encourage broader participation, policymakers, and program designers could consider targeted outreach and support services for these specific demographics. Originality and value: Our new approach, joining meta-analysis and factor analysis, sheds innovative light on contract farming determinants. While the expected determinants like farm and household size, along with education, remained significant, our analysis showed unexpected nuances. Age of the household head emerged as potentially favoring younger, less experienced farmers. Moreover, access to extension services played an important role, while large household size might have a more complex influence depending on age composition. This comprehensive approach offers valuable insights for targeted outreach programs and collaboration with extension services to optimize contract farming adoption and success in developing countries.

Optimal strategies for contract farming supply chain with government subsidies under e-commerce assistance to farmers.

The agricultural issue is a focal point of concern for each country, and e-commerce assistance to farmers, as an emerging model, is gaining increasing attention. Considering this trend, this paper bases on e-commerce assistance to farmers and considers four types of government subsidies: no subsidy, price subsidy model with the farmer as the subsidy target, price subsidy model with the e-commerce platform as the subsidy target, and area subsidy model. Based on this, a game model of the contract farming supply chain involving a farmer and an e-commerce platform was established to explore the optimal decision-making in the contract farming supply chain considering various government subsidies under the background of e-commerce assistance to farmers. The results indicate that: (1) Consumer preference for supporting farmers and consumer premiums can stimulate the farmer to expand farm size, increase agricultural production, increase the purchase price of agricultural products and promote the growth of profits for the farmer and the e-commerce platform, contributing to the growth of social welfare. Output volatility can lead to a decrease in farm size and a reduction in the purchase price of agricultural products. (2) Government subsidies can support the farmer in expanding farm size and contribute to increased profits for the farmer and the e-commerce platform. However, government subsidies do not universally have a positive impact on every variable. The influence of government subsidies on the purchase price of agricultural products is contingent upon the method of subsidy distribution. Similarly, the effects of government subsidies on social welfare are influenced by factors such as price elasticity and agricultural productions per unit area. (3) From the perspectives of farm size, the purchase price of agricultural products, and profits of the farmer and the e-commerce platform, the government will have different and more targeted subsidy models, and the corresponding subsidy models are influenced by the agricultural productions per unit area. The research conclusion can provide references for optimal decision-making in contract farming under the model of e-commerce assistance to farmers.

Does Contract Farming Improve Diet Quality? The Case of Senegalese Smallholders

ABSTRACTThe institution of contract farming has gained prominence in most developing countries owing to its numerous benefits. While several studies have already highlighted the welfare benefits of contract farming, very few have investigated the effects on diet quality, despite poor quality diets being a serious challenge in most parts of the developing world. Moreover, such existing studies deal with contract farming in speciality crops, although contract farming in staple crops may have different effects on diet quality. Therefore, this study evaluates the role of staple crop contracts on diet quality, proxied by two measures of dietary diversity. Using cross‐sectional data from rice‐producing households in Senegal, we employ linear models through ordinary least squares to estimate the relationship between contract farming and diet quality. Our results show that participation in contract farming is positively associated with household dietary diversity and hence, diet quality. Our results further show that income is the main pathway through which contracts and diet quality are associated. With increasing calls for agriculture to be nutrition‐sensitive, our results suggest that the institution of contract farming can play an important role in this regard by improving diet quality.

Constraints Faced by Potato Contract Farmers in the Northern District of West Bengal, India: An RBQ Method Approach

Constraints Faced by Potato Contract Farmers in the Northern District of West Bengal, India: An RBQ Method Approach

Participation of smallholder farmers in cattle contract farming: a systematic review

Participation of smallholder farmers in cattle contract farming: a systematic review

Green agricultural technology extension strategies considering industrial organization impacts: Direct subsidy VS indirect incentive

Considering an agricultural production and consumption system composed of the government, enterprise, farmers and consumers, this paper constructs models for green agricultural technologies (GATs) extension based on the contract farming and cooperative, so as to investigate the interaction mechanism between promotion strategies and agricultural industrial organizations (AIOs) as well as its effect on GATs extension. The results show that direct subsidy and indirect incentive both can promote GATs, but the incentive mechanisms of the two promotion strategies are different; under the two AIOs, the optimal promotion strategy to the government is related to the coefficient of indirect incentive cost, and the direct subsidy and indirect incentive both have advantage intervals; given promotion strategies of the government, the combination of direct subsidy and the cooperative can increase the profit of green farmers, while the combination of indirect incentive and the contract farming can increase the amount of green farmers; based on interaction mechanism, the combination of indirect incentive and the contract farming as well as the combination of direct subsidy and the cooperative both can achieve Nash equilibrium from perspectives of the government and enterprise, however, the maximum promotion effect of GATs can be achieved only within its advantage interval. Thus, our research can provide theoretical guidance for governments to make better decisions on promotion strategies, and also is helpful to enterprises to choose optimal AIOs in the process of green transformation of agriculture.

Intensity of Adoption of Improved Malt Barley Production Technologies in Ethiopia: A Case Study in Oromia Region

Improved malt barley production technology packages are not yet widely adopted in Ethiopia. Stakeholders, including brewers, malt factories, research institutes, and farmer-based organizations, have been collaborating and promoting new malt barley production technologies in order to boost the intensity of acceptance. The aim of this study was to find out the intensity of improved malt barley production technologies adoption in Arsi zones, Oromia region, Ethiopia. A stratified random sampling approach with multiple stages was employed to collect primary data from 384 malt barley household heads. The data was analyzed using descriptive statistics, and the intensity of adoption of improved malt barley production technologies was determined using an econometric Tobit regression model. The findings specified that the most adopted improved malt barley variety was Traveler (47.92%), which was followed in descending order by Iboni (14.58%), Sabini (9.38%), Grace (5.47%), Holker (4.43%), and 18.23% unnamed varieties. The Tobit model result also depicted that the intensity to which improved malt barley varieties adopted were affected by, taking into account factors including contract farming involvement, cooperative membership, off-farm income, size of livestock holdings, access to training, and mobile ownership. Enhancing farmers’ knowledge of the advantages of contract farming, income diversification, and mobile phone-based information delivery are among the many ways to support access to and accelerate the adoption of improved malt barley technology in the research area and beyond.

Contract Farming & Cost of Funding: Evidence from Madurase Solar Salt Small Businesses

This study aimed to estimate the indirect expenses borne by tenant farmers due to credits they receive in community salt farming operations managed through contract farming systems in Pamekasan Regency. Credits constitute a crucial aspect of tenant farmers’ rights within the community salt farming contract farming framework. This study employed a comparative analysis of the cost of funds based on the adopted contract farming models, specifically the two-way and three-way contract farming structures. Moreover, it investigated the correlation between the cultivated salt field’s size and the magnitude of the cost of funds endured by tenant farmers. The results of the analysis reveal that the average costs of funds borne by tenant farmers are notably high, ranging from 5.24% to 6.71% per month. Surprisingly, these figures exceed the loan interest rates offered by two formal financial institutions: BRI and Bank JATIM. Another significant finding is the positive correlation between the size of cultivated salt fields and the magnitude of the cost of funds borne by tenant farmers. Lastly, there is a clear positive relationship between the credit amount received and the corresponding cost of funds endured by tenant farmers. The substantial costs of funds shouldered by tenant farmers involved in the community salt farming, operated through contract farming systems in Pamekasan Regency, signify inefficiencies within the contract farming structure. It is expected that the government can aid these tenant farmers by disbursing subsidized credits through collaborations with relevant ministries and local formal financial institutions.

Contract farming in northern district of West Bengal: A socio-economic profile study

Contract farming in northern district of West Bengal: A socio-economic profile study

Role Of Government Policies In Shaping Vegetable Marketing Practices: Evidence FromRajasthan

This study examines the impact of government policies on vegetable marketing practices in the Indian state of Rajasthan. Using primary data collected from surveys of 500 farmers, 100 wholesalers, and 50 retailers across five districts of Rajasthan, as well as secondary data fromgovernment reports and academic literature, the paper analyzes how various national and state-level agricultural policies have influenced the structure and functioning of vegetable value chains in the region. Key policies considered include the Agricultural Produce Market Committee (APMC) Act, contract farming laws, minimum support prices (MSP), and agricultural subsidies. The results show that the APMC Act has led to the development of a network of regulated wholesale markets which serve as the main marketing channel for vegetables, but its provisions restricting sales outside these markets have hindered direct linkages between producers and buyers. Recent reforms aimed at allowing private markets and removing barriers to interstate trade have had limited impact so far. Contract farming remains underdeveloped due to regulatory uncertainty and lack of trust between stakeholders. MSP haslittle relevance for most vegetable crops given their perishability and lack of public procurement. Input subsidies, while increasing yields, have exacerbated problems of overuse of chemicals and declining water tables. The paper argues for a more holistic, nutrition-sensitive approach to agricultural policy that goes beyond a narrow focus on boosting production and marketable surplus. Specific recommendations include investments in storage and cold-chain infrastructure, expansion of crop insurance coverage, promotion of Farmer Producer Organizations and shorter supply chains, and greater emphasis on sustainable production practices and nutrition education. Enhancing smallholder access to credit, information, and input-output markets remains critical

A review of intensive contract poultry farming in Nigeria

Contract farming (CF) is a sort of vertical integration in agricultural commodity chains that provides a business with strong control over several operational processes, including the production process, the features of the items, quantity, quality, and timeliness of project execution. Birds were first domesticated by humans as farm animals, and as a result, many years ago, the contemporary practice of raising birds began with the harvesting of their eggs and young from their natural habitat. The Nigerian poultry industry falls into three main categories: small-, medium-, and large-scale, which are also referred to as backyard, semi-commercial, and commercial respectively. Contract farming emerged as an alternative to traditional or spot market-based agricultural production and was introduced into Nigeria under a variety of business names, including CHI, AMO, ANIMAL CARE, and ZARTECH, among others. Nigeria consumes 192.69 MT of poultry meat and egg products annually, resulting in enormous environmental impacts that have not been adequately addressed because of the growing use of contract farming. Contract farming has always received a lot of attention from academics and policymakers. Even though contract farming acknowledges the transfer of technology, prospects for increased revenue, and improved access to inputs, a great deal of research has focused on the risks that smallholder farmers face. In recent years, debate has erupted regarding the benefits and dangers of factory poultry production considering rising awareness of the challenges it poses to public health and the environment. This review reveals that backyard flocks of chickens can thrive independently of large-scale poultry operations. Survival traits including tiny size, hardiness, sluggish growth, low mature body weight, tolerance, or resistance to common local disease organisms and parasites define local chickens.

Analyzing the Adoption of Improved Production Technologies among Cassava Contract and Non-Contract Farmers in Kogi State, Nigeria

Analyzing the Adoption of Improved Production Technologies among Cassava Contract and Non-Contract Farmers in Kogi State, Nigeria

Smallholders in contract farming value chain: Challenges and opportunities, empirical evidence from West Bengal, India

This paper uses the mixed-methods approach to analyze farmer position in contract farming (CF) value chain, challenging simplistic “win-win” narratives that ignore power dynamics and “win-lose” ones that overlook economic factors. PepsiCo hires intermediaries as principal agents to control many smallholders, thereby reducing transaction costs and exerting control over quality raw materials. Through secure commissions to agents and fixed prices to farmers, PepsiCo transfers capital and production risks, respectively. The value chain analysis at each farming stage reveals that although CF addressed specific inputs and output constraints for smallholders, the unequal power dynamics and monopsony position of PepsiCo and intermediaries raise sustainability concerns. The existing unequal power relations within CF value chains underline the urgency of establishing a regulatory mechanism. Without such oversight, individual farmers may find it challenging to advocate for their interests in the face of corporations and intermediaries in cultivating high-value crops, for which demand is rising.

Does Contract Farming Improve Income of Smallholder Avocado Farmers? Evidence from Sidama Region of Ethiopia

Does Contract Farming Improve Income of Smallholder Avocado Farmers? Evidence from Sidama Region of Ethiopia

Education, Risk-attitude and Agricultural Innovation: Farm Level Investigation in North India

This paper explores the role of farmers’ education in promoting farming innovation, that is, contract farming (CF). Applying the Tobit model on cross-sectional data of 754 wheat growers in Haryana, it has been found that education directly and indirectly (by reducing risk aversion) stimulates the participation intensity of farmers in CF. It directly enhances farmers’ capacity to absorb and comprehend CF complexities and indirectly reduces farmers’ risk-aversion attitude. It fosters a positive attitude and willingness to adopt modern technologies. Hence, both the education and risk-taking attitudes of farmers are found to be significant for CF adoption probability and intensity. Other factors like farm size, non-farm income, asset ownership and access to credit, media and contact with extension services are all positive stimuli of CF participation intensity. The study suggests promoting field school and awareness programmes to help farmers both acquire and disseminate information on modern farm practices and technologies. JEL Codes: C01, I25, Q16