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Smallholder farmers and contract farming in developing countries

Proceedings of the National Academy of Sciences - PNAS, 2020-01, Vol.117 (1), p.259-264 [Peer Reviewed Journal]

Copyright National Academy of Sciences Jan 7, 2020 ;2020 ;ISSN: 0027-8424 ;EISSN: 1091-6490 ;DOI: 10.1073/pnas.1909501116 ;PMID: 31836695

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  • Title:
    Smallholder farmers and contract farming in developing countries
  • Author: Meemken, Eva-Marie ; Bellemare, Marc F.
  • Subjects: Biological Sciences ; Developing countries ; Development policy ; Farmers ; Farming ; Farms ; Labor ; LDCs ; Poverty ; Rural development ; Small farms ; Social Sciences
  • Is Part Of: Proceedings of the National Academy of Sciences - PNAS, 2020-01, Vol.117 (1), p.259-264
  • Description: Poverty is prevalent in the small-farm sector of many developing countries. A large literature suggests that contract farming—a preharvest agreement between farmers and buyers—can facilitate smallholder market participation, improve household welfare, and promote rural development. These findings have influenced the development policy debate, but the external validity of the extant evidence is limited. Available studies typically focus on a single contract scheme or on a small geographical area in one country. We generate evidence that is generalizable beyond a particular contract scheme, crop, or country, using nationally representative survey data from 6 countries. We focus on the implications of contract farming for household income and labor demand, finding that contract farmers obtain higher incomes than their counterparts without contracts only in some countries. Contract farmers in most countries exhibit increased demand for hired labor, which suggests that contract farming stimulates employment, yet we do not find evidence of spillover effects at the community level. Our results challenge the notion that contract farming unambiguously improves welfare. We discuss why our results may diverge from previous findings and propose research designs that yield greater internal and external validity. Implications for policy and research are relevant beyond contract farming.
  • Publisher: United States: National Academy of Sciences
  • Language: English
  • Identifier: ISSN: 0027-8424
    EISSN: 1091-6490
    DOI: 10.1073/pnas.1909501116
    PMID: 31836695
  • Source: GFMER Free Medical Journals
    PubMed Central
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