Contract farming, contract design and smallholder livelihoods

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dc.creatorRuml, Anette
dc.creatorRagasa, Catherine
dc.creatorQaim, Matin
dc.date2022-01
dc.date2024-04-12T13:37:24Z
dc.date2024-04-12T13:37:24Z
dc.date.accessioned2026-06-27T15:10:31Z
dc.descriptionContract farming has gained in importance in many developing countries. Previous studies analysed effects of contracts on smallholder farmers’ welfare, yet mostly without considering that different types of contractual relationships exist. Here, we examine associations between contract farming and farm household income in the oil palm sector of Ghana, explicitly differentiating between two types of contracts, namely simple marketing contracts and more comprehensive resource-providing contracts. Moreover, we look at different income sources to better understand how both contracts are linked to farmers’ livelihood strategies. We use cross-sectional survey data and regression models. Issues of endogeneity are addressed through measuring farmers' willingness-to-participate in contracts and using this indicator as an additional covariate. Farmers with both types of contracts have significantly higher household incomes than farmers without a contract, yet with notable differences in terms of the income sources. Farmers with a marketing contract allocate more household labour to off-farm activities and thus have higher off-farm income. In contrast, farmers with a resource-providing contract have larger oil palm plantations and thus higher farm incomes. The findings suggest that the two contract types are associated with different livelihood strategies and that disaggregated analysis of different income sources is important to better understand possible underlying mechanisms.
dc.identifierhttps://hdl.handle.net/10568/141171
dc.identifier.urihttp://hdl.handle.net/123456789/96756
dc.languageen
dc.publisherWiley
dc.relationhttps://doi.org/10.1016/j.worlddev.2017.09.008
dc.relationhttps://doi.org/10.1016/j.foodpol.2017.11.001
dc.rightsOpen Access
dc.sourceRuml, Anette; Ragasa, Catherine; and Qaim, Matin. 2022. Contract farming, contract design and smallholder livelihoods. Australian Journal of Agricultural and Resource Economics 66(1): 24-43. https://doi.org/10.1111/1467-8489.12462
dc.subjectelaeis guineensis
dc.subjectoil palms
dc.subjectnonfarm income
dc.subjecthousehold income
dc.subjectsmallholders
dc.subjectlivelihoods
dc.subjectcontract farming
dc.subjectcredit
dc.titleContract farming, contract design and smallholder livelihoods
dc.typeJournal Article

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)