Contract Farming and Cashew Production in North Benin: Socio-economic importance and determinants of profitability (original) (raw)
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– This study aims to analyze the adoption of agricultural contracts in Northeastern Benin, precisely in the communes of Tchaourou and N'Dali. The data collection was conducted on a sample of 144 producers (including 72 adopting farmers and 72 non-adopters) from the questionnaire. The information obtained was analyzed from the STATA 13 software. The analysis of the determinants of the adoption of agricultural contracts was based on a binary logistic regression model. Thus, the adoption of agricultural contracts by cashew producers is determined by variables such as: the age of the producer, the number of schooling years, the size of the household, the agreement on the quantity of nuts to be delivered under contract, the appreciation of the solidarity guarantee and the assessment of the risks presented by agricultural contracts. These determinants have a positive influence on the adoption of agricultural contracts by cashew producers, with the exception of the producer's assessment of the joint and several guarantees and the producer's assessment of the risks posed by agricultural contracts.
2018
This study aims to analyze the adoption of agricultural contracts in Northeastern Benin, precisely in the communes of Tchaourou and N'Dali. The data collection was conducted on a sample of 144 producers (including 72 adopting farmers and 72 non-adopters) from the questionnaire. The information obtained was analyzed from the STATA 13 software. The analysis of the determinants of the adoption of agricultural contracts was based on a binary logistic regression model. Thus, the adoption of agricultural contracts by cashew producers is determined by variables such as: the age of the producer, the number of schooling years, the size of the household, the agreement on the quantity of nuts to be delivered under contract, the appreciation of the solidarity guarantee and the assessment of the risks presented by agricultural contracts. These determinants have a positive influence on the adoption of agricultural contracts by cashew producers, with the exception of the producer's assessm...
Contract Farming: A Boon to Farmers
Advances in Dairy Research, 2014
Farming is an age-old means of livelihood for millions of India’s small and marginal farmers. Contract farming has been in existence for many years as a means of organizing the commercial agricultural production of both large– scale and small–scale farmers. In an age of market liberalization, globalization and expanding agri-business, there is a danger that small-scale farmers will find difficulty in fully participating in the market economy. In the era of globalization, the concept of ‘Contract farming’ is an effective way to co-ordinate and promotes production and marketing in agriculture. “Contract farming can be defined as an agreement between farmers and processing or marketing firms for the production and supply of agricultural products under forward agreements frequently at predetermined prices.” Sustained income growth and urbanization are causing rapid changes in the “food consumption, production and marketing” in India. Over the last two decades, there has been a rapid inc...
The Determination of Contracts in Agricultural Economies Abstract
2000
This paper aims to analyze how contracts are determined and modified given diverse agricultural settings and to examine the implications of these changes with respect to their efficiency, distribution and sustainability. The contract model presented here differs from previous contract models as the enforcement issues regarding contracts across various agro-climatic and output conditions are considered. Emphasis is placed on the
Unlocking the Potential of Contract Farming: Lessons from Ghana
"This paper analyses sorghum contract farming in north-east Ghana in order to explore ways of making such arrangements viable for small farmers. The analysis draws on the convergence of sciences approach, which sees both science and social relations interactions among the relevant stakeholders) as important for developing small farmer-relevant agricultural innovations (technology, procedures, new forms of organisation). The study reveals that the failure and problems encountered in this particular contracting scheme were both technical and institutional. The technical issues were a combination of pest problems, the environment and the sorghum variety chosen. The institutional issues involved the contractual arrangements and relations between the contracting parties. The authors argue that if contracts are to be fair, they must allow for compensation, contingencies and production risks. But scientific knowledge is required in order to adequately incorporate these elements."
Comparing contracts: An evaluation of contract farming schemes in Africa
World Development, 1997
The sufferings of so many small farmers in Africa who produce on contract have been well recorded and analyzed, yet it seems that such production will continue to expand. Can governments and nongovernment organizations (NGOs) take any action to reduce the suffering? We examine our own experience of contract farming in Nigeria and South Africa in the context of earlier research, and draw attention to important issues which have received little attention in the literature, notably staffing of schemes, farmers' previous experience with multinational national companies (MNCs), water control and labor issues. We make recommendations toward codes of practice which could be issued to companies, regulators and small fanners.
Contract Farming in the Morocco Cereal Sector: Contract Clauses, Ambiguity, and Opportunism
International Journal of Agricultural Economics
Our main aim was to analyze of the various types of contractual clauses framework of Agricultural Aggregation Projects (AAP) in the cereal sector in Morocco. We used the data from the content of the contracts and by individual interviews with key actors complicated in the process of implementation of the aggregation projects of cereals. The results reveal that only eight Agricultural Aggregation Project, out of 119, received the certificate of aggregation. This is reflecting the fact that, the implementation of this model of vertical coordination was underway. In addition, the analysis of the contract-farming data for clauses has shown us 5 important clauses categories: production (quantity and quality) and payment methods; agricultural extension systems; inputs supply; management of risks; and dispute resolution mechanisms. These findings highlight the value added to the contractual clauses and the need to strengthen the visibility and role of the contract farming as a framework to accompany the investments of ''The Green Morocco Plan'', in particular with regard to agricultural aggregation projects. We also show that the contract participation reduces the transaction costs in aggregation system, reduction in the number of intermediaries and ensure the link between the producers and markets. The study concludes that, despite enactment of laws on farm aggregation, contract smallholders remain vulnerable to opportunist behavior. It suggests that the contract clauses must be accompanied by commensurate controls and Involving farmers in negotiating contract terms to ensure 'win-win' outcomes for Aggregator (AG) and Aggregated (Ag).
Impact of contract farming on smallholders in Ethiopia: the case of chickpea growers
2016
Contract farming (CF) is an institutional arrangement by which agribusinesses replace or supplement primary agricultural production with supply from smallholders. In developing countries where farms are typically small and resource poor, questions have been asked about its impact on smallholders, particularly the poorest. This study examined these aspects of a Contract Farming Arrangement (CFA) between a chickpea processing firm and a farmers' cooperative union in central Ethiopia. A random sample of 95 growers was drawn from a list of CF participants. In addition, a representative sample of 114 households was drawn from seven counties where the CFA was active. A subset of nonparticipating households with characteristics similar to those of participants was identified as a control group using propensity scores predicted by a logit model. The logit model indicated that the CFA was biased against farmers who were relatively poor, risk averse and short of farming skills and experience. However, there was no evidence that participation was influenced by gender, education, farm size or household labour endowments. Univariate comparisons revealed significant differences in key outcomes between participants and households in the control group. A multivariate 'treatment' model estimated to isolate the impact of the CFA found that participation had a substantial positive impact on household cash revenue (ETB 3,658 per adult equivalent) and net cash income (ETB 3,411 per adult equivalent) earned from crop production. Local Average Treatment Effects (LATEs) computed for 'complier' households were also sizeable for these outcomes at ETB 2,879 and ETB 1,896 per adult equivalent respectively. Participants attributed increases in net income to improved seed, a stable product price, higher yields and a guaranteed market. Descriptive analysis of other perceived outcomes suggested that participants also benefitted from improved food security and better access to preferred markets, credit, new technology, information and technical advice. Levels of satisfaction with the terms and administration of the CFA were high.
Does contract farming improve productivity and income of farmers?: A review of theory and evidence
The Journal of Developing Areas, 2015
The share of agriculture in the gross domestic product of (GDP) in many countries has been declining. Yet agriculture still plays an important role in many developing country economies as the sector is a source of employment for an estimated 60 to 70 percent of the population in most developing countries. Most agricultural production in developing countries is associated with low productivity and poor income due to high dependence on subsistence farming with minimal technology as well as poor access to markets. Contract farming is believed to improve productivity and income because it facilitates coordination between farmers and other actors in terms of production, processing and marketing of agricultural products. The effect of contract farming on income and productivity has been a subject of increasing research but most of the available information is aggregated and there is lack of detail analysis on the mechanisms of the effects. We conducted a systematic literature review of contract farming studies using keyword search strategy Econlit, Scopus and Science Direct search engines. The keywords "contract", "farming", "contract farming" were used in combination with the words "income", "productivity", "quantitative", "qualitative", "agriculture", "aquaculture", "developing", "developed" and "country". Initially a selection criteria for the potential studies were defined and used by the authors separately to select and rank 20 studies by importance. In the second round, the authors were provided with their own rankings as well as with the results of the first round for others. A revision of ranking was requested. Based on this approach a shortlist of 23 studies emerged; 11 on the impact of contract farming on productivity and 12 were on the effects of contract farming on income of producers. We conduct an in depth analyses of the selected studies and present evidence on the effect of contract farming on farmer productivity and income. Almost all the selected studies analyzing the impact of contract farming on income argue that farmers' on contract farming schemes experienced some increase in their income.