Bellemare, Marc F. (2010): As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming.
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What is the impact of participation in commodity chains on producer welfare? Contract farming – wherein a processing firm delegates its production of agricultural commodities to growers – is often viewed as a means of increasing grower welfare in developing countries. Because the nonrandom participation of growers in contract farming has so far not been dealt with convincingly, whether participation in contract farming increases welfare is up for debate. This paper uses the results of a contingent valuation experiment to estimate willingness to pay to enter contract farming, which is then used to control for actual participation in contract farming. Using data from Madagascar, results indicate that contract farming entails a 12- to 18-percent increase in income; a 16-percent decrease in income volatility; a two-month decrease in the duration of the hungry season; and a 30-percent increase in the likelihood that a household receives a formal loan.
|Item Type:||MPRA Paper|
|Original Title:||As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming|
|Keywords:||Contract Farming, Welfare, Grower-Processor Contracts, Outgrower Schemes|
|Subjects:||L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L24 - Contracting Out; Joint Ventures; Technology Licensing
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
|Depositing User:||Marc F Bellemare|
|Date Deposited:||05. Jul 2010 11:56|
|Last Modified:||19. Feb 2013 01:05|
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