Contract Farming and Rural Transformation: Evidence from a Field Experiment in Benin
Posted: 14 Nov 2018 Last revised: 30 Sep 2020
Date Written: March 1, 2019
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 in a developing country. 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.
Keywords: structural transformation, contract farming, RCT, rice, sub-saharan africa
JEL Classification: C93, L14, O13, Q12
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