As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming

Marc F. Bellemare

doi:10.1016/j.worlddev.2011.12.008

As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming

Marc F. Bellemare

Applied Economics

Research output: Contribution to journal › Article › peer-review

279 Scopus citations

Abstract

Contract farming is widely perceived as a means of increasing welfare in developing countries. Because of smallholder self-selection in contract farming, however, it is not clear whether contract farming actually increases grower welfare. In an effort to improve upon existing estimates of the welfare impacts of contract farming, this paper uses the results of a contingent-valuation experiment to control for unobserved heterogeneity among smallholders. Using data across several regions, firms, and crops in Madagascar, results indicate that a 1-percent increase in the likelihood of participating in contract farming is associated with a 0.5-percent increase in household income, among other positive impacts.

Original language	English (US)
Pages (from-to)	1418-1434
Number of pages	17
Journal	World Development
Volume	40
Issue number	7
DOIs	https://doi.org/10.1016/j.worlddev.2011.12.008
State	Published - Jul 2012

Bibliographical note

Funding Information:
I am grateful to David Stifel for invaluable help with the data as well as to Stefano Paternostro for making data collection possible and Eliane Ralison for coordinating the work of the survey team. I thank Jean-Marie Baland, Zack Brown, Catherine Guirkinger, Jonathan Kaminski, Bob Myers, Subhrendu Pattanayak, Vincenzo Verardi, Christian Vossler, and Ying Zhu for helpful comments. I am also grateful to seminar participants at Hebrew University, Leuven, Michigan State, and Namur as well as participants at the 2010 SCC-76 “Economics and Management of Risk in Agriculture and Natural Resources” conference and the 2011 Africa Growth Forum at the Brookings Institution for their comments. This paper was written while I was on leave at the University of Namur, whose generous financial support I wish to acknowledge. I have also benefited from a seed grant from the Duke Center for International Development for preliminary work. All remaining errors are mine.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 2 Zero Hunger
SDG 15 Life on Land

Keywords

Africa
Contract farming
Grower-processor contracts
Madagascar
Outgrower schemes
Welfare

Publisher link

10.1016/j.worlddev.2011.12.008

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abstract = "Contract farming is widely perceived as a means of increasing welfare in developing countries. Because of smallholder self-selection in contract farming, however, it is not clear whether contract farming actually increases grower welfare. In an effort to improve upon existing estimates of the welfare impacts of contract farming, this paper uses the results of a contingent-valuation experiment to control for unobserved heterogeneity among smallholders. Using data across several regions, firms, and crops in Madagascar, results indicate that a 1-percent increase in the likelihood of participating in contract farming is associated with a 0.5-percent increase in household income, among other positive impacts.",

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note = "Funding Information: I am grateful to David Stifel for invaluable help with the data as well as to Stefano Paternostro for making data collection possible and Eliane Ralison for coordinating the work of the survey team. I thank Jean-Marie Baland, Zack Brown, Catherine Guirkinger, Jonathan Kaminski, Bob Myers, Subhrendu Pattanayak, Vincenzo Verardi, Christian Vossler, and Ying Zhu for helpful comments. I am also grateful to seminar participants at Hebrew University, Leuven, Michigan State, and Namur as well as participants at the 2010 SCC-76 {\textquotedblleft}Economics and Management of Risk in Agriculture and Natural Resources{\textquotedblright} conference and the 2011 Africa Growth Forum at the Brookings Institution for their comments. This paper was written while I was on leave at the University of Namur, whose generous financial support I wish to acknowledge. I have also benefited from a seed grant from the Duke Center for International Development for preliminary work. All remaining errors are mine. ",

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KW - Madagascar

KW - Outgrower schemes

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As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming

Abstract

Bibliographical note

UN SDGs

Keywords

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