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
Philippine Institute for Development Studies
Surian sa mga Pag-aaral Pangkaunlaran ng PilipinasThe PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are being circulated in a limited number of copies only for purposes of soliciting comments and suggestions for further refinements. The studies under the Series are unedited and unreviewed.The views and opinions expressed are those of the author(s) and do not necessarily reflect those of the Institute.Not for quotation without permission from the author(s) and the Institute.
AbstractLinking small farmers to modern markets, whether domestically or for export, increasingly entails participation in modern supply chains coordinated by contract farming. Concerns have been raised regarding the possible disadvantages from contract farming facing small farmers. Most empirical work points to a positive correlation between participation in contract farming and net farm income. Such a correlation fails to correct for endogeneity of participation; few studies have performed multivariate analysis with such a correction. This case study, based on a survey of smallholders in the tobacco industry, seems to be the first such application for the Philippines. The study finds that, correcting for endogeneity, participation in contract farming causes a sizable increase in farm profitability; moreover participation appears to be biased towards smaller farm sizes. The findings are robust to the econometric method used and even definition of participation. This is further evidence to confirm that supply chains linking agribusiness with small farmers via contract schemes are a viable model of value addition and inclusive growth in rural areas. Policies should be implemented to support an enabling environment for expansion of supply chains.