Impact of Contract Farming on Income: Linking Small Farmers, Packers, and Supermarkets in China
By S. Miyata, N. Minot, D. Hu. 2009
573 citations recorded by the source corpus.
"Contract farming is seen by proponents as a way to raise small-farm income by delivering technology and market information to small farmers, incorporating them into remunerative new markets. Critics, however, see it as a strategy for agribusiness firms to pass production risk to farmers, taking advantage of an unequal bargaining relationship. There is also concern that contract farming will worsen rural income inequality by favoring larger farmers. This study examines these issues in Shandong Province, China, using survey data collected from 162 apple and green onion farmers and interviews with four contracting firms in 2005. Using a probit model to estimate participation in a contract-farming scheme, we find little evidence that contracting firms prefer to work with larger farmers, though all farms in the area are quite small. Furthermore, using a Heckman selection-correction model to control for possible selection bias, we find that contract farmers earn significantly more than independent farmers after controlling for household labor availability, education, farm size, and other characteristics. Finally, we find that the way contracting contributes to farm income varies between commodities: contract apple growers benefit from higher yields (presumably due to technical assistance), while contract green onion growers receive higher prices (presumably due to better quality). These results suggest that contract farming can help small farmers raise their incomes and gain access to the growing urban and export markets. Questions remain regarding the number of farmers that are, or could be, brought into similar contract arrangements." from Authors' Abstract
View Paper: https://www.semanticscholar.org/paper/742a45998609b2b532f93cbb6ad361dc320ab43f
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
Citations in the corpus
- As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming (2012, background): “…organizations) a respondent belongs to (Simmons et al., 2005); the distance between a respondent’s farm and the farm of the village chief (Miyata et al., 2009); the number of female laborers in the respondent’s household as well as a dummy for whether a female in the household is a…”
- Impacts of supermarkets on farm household nutrition in Kenya (2015, background): “, 2012), household income (Miyata et al., 2009; Rao and Qaim, 2011; Michelson, 2013), and labor markets (Neven et al.”
- Does contract farming improve smallholder income? The case of avocado farmers in Kenya (2016, background): “While there is evidence that CF can have a positive impact on farmers’ welfare (Miyata et al., 2009; Olomola, 2010; Wainaina et al., 2012), there is paucity of empirical evidence on its impact on the welfare of smallholder farmers, especially when the producers are loosely enjoined in the contract t”
- Food value chain transformations in developing countries: Selected hypotheses on nutritional implications (2013, background): “There is ample empirical evidence that farmers who participate in supermarket supply chains enjoy higher income opportunities (Bellemare, 2012; Miyata et al., 2009), even when facing stricter product safety and product standards established by supermarkets (Minten et al.”
- Contract Farming and Food Security (2017, background): “[20] Miyata, Sachiko, Nicholas Minot, and Dinghuan Hu (2009), Impact of Contract Farming on Income: Linking Small Farmers, Packers, and Supermarkets in China, World Development 37(11): 1781-1790.”