TY - JOUR
T1 - Contract farming and rural transformation
T2 - Evidence from a field experiment in Benin
AU - Arouna, Aminou
AU - Michler, Jeffrey D.
AU - Lokossou, Jourdain C.
N1 - Funding Information:
We gratefully acknowledge financial support from the University Illinois [Grant number: 2015-03766-03 ], the ISPC- SPIA program “Strengthening Impact Assessment in the CGIAR System (SIAC),” the CGIAR research program (CRP) RICE, the Bill & Melinda Gates Foundation (Grants no. OPP1088843 ), and the West African Economic and Monetary Union (UEMOA). We also thank the manager of ESOP Bante for the support during the experiment. The experiment was registered at the AEA RCT registry, ID AEARCTR-0002619 and received IRB approval from the University of Illinois (#16618). Helpful comments were provided by Kodjo Aflagah, Mary Arends-Kuenning, Chris Barrett, Kathy Baylis, Karen Brooks, Michael Carter, Lorenzo Casaburi, Molly Ingram, Anna Josephson, Sunghun Lim, Hope Michelson, Ameet Morjaria, Jake Ricker-Gilbert, Gerald Shively, Tavneet Suri, Emilia Tjernström, and participants at the NBER Conference on Transforming Rural Africa, CSAE, University of Arizona, the CGIAR PIM Workshop, and the International Rice Congress. All errors are our own. We declare that we have no relevant or material financial interests that relate to the research described in this paper.
Publisher Copyright:
© 2021 The Authors
PY - 2021/6
Y1 - 2021/6
N2 - Contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. Yet, there is a lack of consensus on its ability to spur structural transformation in rural economies. We present results from a field experiment on contract farming for rice production in Benin. While all contracts have positive effects on welfare and productivity measures, we find that the simplest contract has impacts nearly as large as contracts with additional attributes. This suggests that once price risk is resolved through the offer of a fixed-price contract, farmers are able to address other constraints on their own.
AB - Contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. Yet, there is a lack of consensus on its ability to spur structural transformation in rural economies. We present results from a field experiment on contract farming for rice production in Benin. While all contracts have positive effects on welfare and productivity measures, we find that the simplest contract has impacts nearly as large as contracts with additional attributes. This suggests that once price risk is resolved through the offer of a fixed-price contract, farmers are able to address other constraints on their own.
KW - Contract farming
KW - RCT
KW - Rice
KW - Structural transformation
KW - Sub-Saharan Africa
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U2 - 10.1016/j.jdeveco.2021.102626
DO - 10.1016/j.jdeveco.2021.102626
M3 - Article
AN - SCOPUS:85102133137
VL - 151
JO - Journal of Development of Economics
JF - Journal of Development of Economics
SN - 0304-3878
M1 - 102626
ER -