Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWith the modernization of global agri-food systems, the role of contract farming is increasing. This also involves smallholder farmers in developing countries. While previous studies have looked at economic impacts of contract schemes on smallholder farmers, little is known about farmers' preferences for contracting in general, and for specific contract design attributes in particular. Better understanding farmers' preferences and constraints is important to make smallholder contract schemes more viable and beneficial. This article builds on a choice experiment to analyze farmers' preferences and preference heterogeneity for contracts in Kenya. In the study region, supermarkets use contracts to source for fresh vegetables directly from preferred suppliers. However, farmer dropout rates are high. Mixed logit models are estimated to examine farmers' attitudes towards critical contract design attributes. Having to deliver their harvest to urban supermarkets is costly; hence farmers require a significant output price markup. Farmers also dislike delayed payments that are commonplace in contract schemes. The most problematic contract attribute is related to unpredictable product rejection rates, which substantially add to farmers' risk. Designing contracts with lower transaction costs, more transparent quality grading, and fairer risk-sharing clauses could enhance smallholder participation in supermarket procurement channels.

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Crop diversification is a viable climate risk management strategy to increase crop production and productivity among farm households. We use a panel of farm household and meteorological data collected over ten years to analyze crop diversification trends and the impacts of climate change and variability on crop diversification in small-scale farms in Kenya. Previous studies are inconclusive on what context(s) crop diversification is beneficial to farmers and the influence of climate change and variability on the decision to diversify crop production. Using panel data models, we find small-scale farmers in regions with low rainfall and high temperatures are more likely to diversify crop production. Further findings show that farm size, inorganic fertilizer use, household incomes and access to off-farm livelihood options are predictors of crop diversification. Crop diversification is not a one-size-fits-all strategy and should be adopted in situations where it gives maximum benefits, consistent to existing land use policies and well-known benefits of a specified crop portfolio. A win-win situation will involve land sparing, a balance between specialized and diversified cropping systems and scaling up adoption of the improved technologies among vulnerable farmers in drought risk areas.

This Working Paper is an output of the Bunda Grant Scheme program of IFPRI-Lilongwe. This mentorship scheme provides selected MSc students from the Lilongwe University of Agriculture and Natural Resources (Bunda College) with opportunities to improve, publish, and disseminate the research that they undertake during their MSc training by working with a seasoned researcher from IFPRI. The Bunda Grant Scheme program is made possible by the support of the American people through the United States Agency for International Development (USAID). The views expressed in this working paper imply no endorsement by IFPRI-Malawi, USAID, or anyone except the authors.

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