A systematic review of contract farming and it's impacts on broiler producers in Lebanon

Kozhaya, Rodrique (2020): A systematic review of contract farming and it's impacts on broiler producers in Lebanon.

Abstract

This Thesis has been realized within the agribusiness sector and experiments the Transaction Cost Theory a branch of the New Institutional Economy which explain market failure caused by many factors. Transaction costs are associated with carrying a transaction between buyers and sellers. This study has been conducted between 2014 and 2017; and has collected data from 11 broiler producers in Jezzine, Lebanon, about: Production costs, capital investment, revenues, land tenure, access to infrastructure, and information about the contract. The propensity score matching method is used to compare the effect of participating in contract farming and to solve the hypotheses, which say: There is a positive relationship between contract farming and the economic benefits of broiler producers and the development of the broiler sector in Jezzine District. Findings from farmer’s interviews indicated that sustainability, guaranteed price, risk reduction, credit facilities and technical aids are the main reasons for signing a contract. In contrast, Farmers have expressed problems concerning the contractors’ responsibilities such as delay in payment and delivery. Also, when prices are high, it was argued that farmers were selling the products in the open market.

• Item Type: MPRA Paper
• Language: English
• Keywords: Contract farming, broiler producers, economic sustainability.
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M10 - General

References

Allen, D., & Lueck, D. (1992). Contract choice in modern agriculture: cash rent versus crop share. The Journal of Law & Economics, 35(2), 397-426. Begum, I. A., Alam, M. J., Rahman, S., & Van Huylenbroeck, G. (2013). An assessment of the contract farming system in improving market access for smallholder poultry farmers in Bangladesh. Contract farming for inclusive market access, 39-56. Bellemare, M. F. (2012). As you sow, so shall you reap: The welfare impacts of contract farming? World Development, 40(7), 1418-1434. Bijman, J. (2008). Contract farming in developing countries. An overview of the literature, Wageningen University, Department of Business Administration (Working Paper). Boehlje, M. (1999). Structural changes in the agricultural industries: How do we measure, analyze and understand them? American Journal of Agricultural Economics, 81(5), 1028-1041. Burch, D., Lawrence, G., Green, G. P., Ichijo, K., Nonaka, I., Pimentel, M., & Carneiro, M. J. (2007). World Development Report 2008: agriculture for development (No. E14 231). The World Bank. Clapp, R. A. (1994). The moral economy of the contract. Living under contract: Contract farming and Agrarian transformation in sub-Saharan Africa, 78-96. Coase, R., & Piaget, J. THE PROBLEM OF TRANSACTION COSTS. SOUTHERN CALIFORNIA LAW REVIEW, 62, 1661. Collier, P., & Dercon, S. (2014). African Agriculture in 50Years: Smallholders in a Rapidly Changing World? World development, 63, 92-101. Da Silva, C. A., & Ranking, M. (2013). Contract farming for inclusive market access. Food and Agriculture Organization of the United Nations (FAO). Delgado, C. (1999). Sources of growth in smallholder agriculture in sub-Saharan Africa: the role of vertical integration of smallholders with processors and marketers of high value-added items. Agrekon, 38, 165-189. Eaton, C., & Shepherd, A. (2001). Contract farming: partnerships for growth (No. 145). Food & Agriculture Org. Glover, D., & Kusterer, K. (1990). Small farmers, big business: contract farming and rural development. Macmillan Press Ltd. Godfray, H. C. J., Beddington, J. R., Crute, I. R., Haddad, L., Lawrence, D., Muir, J. F., ... & Toulmin, C. (2010). Food security: the challenge of feeding 9 billion people. Science, 327(5967), 812-818. Goldsmith, A. (1985). The private sector and rural development: Can agribusiness help the small farmer? World Development, 13(10-11), 1125-1138. Goodman, D., & Watts, M. (1994). Reconfiguring the rural or fording the divide? Capitalist restructuring and the global agro‐food system. The Journal of Peasant Studies, 22(1), 1-49. Grosh, B. (1994). Contract farming in Africa: an application of the new institutional economics. Journal of African Economies, 3(2), 231-261. Hamra, C. F. (2010). An Assessment of the Potential Profitability of Poultry Farms: A Broiler Farm Feasibility Case Study (Doctoral dissertation, The University of Tennessee at Martin). Hazell, P. B. (2005). Is there a future for small farms? Agricultural Economics, 32(s1), 93-101. Key, N., & McBride, W. (2003). Production contracts and productivity in the US hog sector. American Journal of Agricultural Economics, 85(1), 121-133. Key, N., & Runsten, D. (1999). Contract farming, smallholders, and rural development in Latin America: the organization of agro-processing firms and the scale of outgrower production. World development, 27(2), 381-401. Kirsten, J., & Sartorius, K. (2002). Linking agribusiness and small-scale farmers in developing countries: is there a new role for contract farming? Development Southern Africa, 19(4), 503-529. Knoeber, C. R., & Thurman, W. N. (1995). “Don't Count Your Chicken...”: Risk and Risk Shifting in the Broiler Industry. American Journal of Agricultural Economics, 77(3), 486-496. Little, P. D. (1994). Living under contract: contract farming and agrarian transformation in sub-Saharan Africa. Univ of Wisconsin Press. Martinez, S. W. (1999). Vertical coordination in the pork and broiler industries: Implications for pork and chicken products (No. 34031). United States Department of Agriculture, Economic Research Service. Minot, N. (1986). Contract farming and its effect on small farmers in less developed countries (No. 54740). Michigan State University, Department of Agricultural, Food, and Resource Economics. Miyata, S., Minot, N., & Hu, D. (2009). Impact of contract farming on income: linking small farmers, packers, and supermarkets in China. World Development, 37(11), 1781-1790. Prowse, M. (2012). Contract farming in developing countries: a review. Agence Française de Développement À Savoir. Ramaswami, B., Singh Birthal, P., & Joshi, P. K. (2009). Grower heterogeneity and the gains from contract farming: the case of Indian poultry. Indian Growth and Development Review, 2(1), 56-74. Reardon, T., Barrett, C. B., Berdegué, J. A., & Swinnen, J. F. (2009). Agrifood industry transformation and small farmers in developing countries. World development, 37(11), 1717-1727. Reardon, T., Timmer, C. P., Barrett, C. B., & Berdegué, J. (2003). The rise of supermarkets in Africa, Asia, and Latin America. American journal of agricultural economics, 85(5), 1140-1146. Rehber, E. (2007). Contract farming: Theory and practice. ICFAI Books. Roy, E. P. (1963). Contract farming, USA. Contract farming, USA. Runsten, D., & Key, N. (1996). Contract farming in developing countries: Theoretical aspects and analysis of some Mexican cases. Report prepared for the United Nations Economic Commission for Latin America and the Caribbean, Santiago, Chile. Shepherd, A. (2005). The implications of supermarket development for horticultural farmers and traditional marketing systems in Asia. Rome, FAO. Simmons, P., Winters, P., & Patrick, I. (2005). An analysis of contract farming in East Java, Bali, and Lombok, Indonesia. Agricultural Economics, 33(s3), 513-525. Singh, S. (2002). Contracting out solutions: Political economy of contract farming in the Indian Punjab. World Development, 30(9), 1621-1638. Stiglitz, J. E. (2004). Capital-market liberalization, globalization, and the IMF. Oxford Review of Economic Policy, 20(1), 57-71. Swinnen, J. F. (Ed.). (2007). Global supply chains, standards and the poor: how the globalization of food systems and standards affects rural development and poverty. Cabi. Warning, M., & Key, N. (2002). The social performance and distributional consequences of contract farming: An equilibrium analysis of the Arachide de Bouche program in Senegal. World Development, 30(2), 255-263. Weatherspoon, D. D., & Reardon, T. (2003). The rise of supermarkets in Africa: implications for agrifood systems and the rural poor. Development Policy Review, 21(3), 333-355. Williamson, O. E. (1979). Transaction-cost economics: the governance of contractual relations. The journal of law & economics, 22(2), 233-261. Will, M. (2013). Contract Farming Handbook. A Practical Guide for Linking Small-Scale Producers and Buyers through Business Model Innovation, GIZ, Federal Ministry for Economic Cooperation and Development.