Profits from participation in high value agriculture: Evidence of heterogeneous benefits in contract farming schemes in Southern India

Narayanan, Sudha

doi:10.1016/j.foodpol.2013.10.010

Cited by 119 publications

(153 citation statements)

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“…The first stage uses a pair of time period dummy variables as instruments; again, contract farming has a positive effect on farm income. The most recent study (Narayan, 2014) shows that contract participation is not always a positive factor in farm incomes; for a sample of 474 farmers in four commodity sectors (gherkins, papaya, marigold, and broilers), an endogenous switching model is applied on net profit. Contracting offers net gains for papaya and broiler, but is ambiguous for gherkins and reduces net incomes for marigold farmers.…”

Section: Impact Of Contract Farming: Past Researchmentioning

confidence: 99%

Small Farmers in High-Value Chains: Binding or Relaxing Constraints to Inclusive Growth?

Briones¹

2015

World Development

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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.

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Section: Impact Of Contract Farming: Past Researchmentioning

confidence: 99%

Small Farmers in High-Value Chains: Binding or Relaxing Constraints to Inclusive Growth?

Briones¹

2015

World Development

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“…The region has become one of 2 While the impact evaluation literature has moved beyond the estimation of average welfare effects and heterogeneous effects have been analyzed in studies on the impact of entrepreneurship, contract-farming, standards and cooperative membership (e.g. Fisher and Qaim, 2012;Hansen and Trifkovic, 2014;Verhofstadt and Maertens, 2015;Narayanan, 2014;Ramaswami et al, 2009;Vial and Hanoteau, 2015), evidence on heterogeneous effects is largely lacking in the literature on high-value exports. Polygamy is common in the area, with members of polygamist households living in the same compound.…”

Section: Research Areamentioning

confidence: 99%

Global value chains, large-scale farming, and poverty: Long-term effects in Senegal

2017

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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 AbstractThis paper is the first to present panel data evidence on the longer-term impact of expansion of global value chains and large-scale export-oriented farms in developing countries. Using panel data from two survey rounds covering a seven-year period and fixed effects regression, we estimate the longer-term income effects of wage employment on large-scale farms in the rapidly expanding horticultural export sector in Senegal. In addition to estimating average income effects, we estimate heterogeneous income effects using fixed effects quantile regression. We find that poverty and inequality reduced much faster in the research area than elsewhere in Senegal. Employment in the horticultural export sector significantly increases household income and the income effect is strongest for the poorest households. Expansion of the horticultural export sector in Senegal has been particularly pro-poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population. These pro-poor employment effects contrast with insights in the literature on increased inequality from rural wage employment.

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“…More problematic were studies containing several empirical instances of contract farming, covering distinct crops. There were four such studies: Bellemare (2012), Miyata et al (2009), Narayanan (2014, and Simmons et al (2005). Of these, the first two contained several empirical instances of contract farming but did not distinguish between them in the analysis.…”

Section: Unit Of Analysis Issuesmentioning

confidence: 99%

“…On average household heads were 45 years old, went to school for eight years and cultivated 0.8 ha of land. Narayanan (2014) looks at four different empirical instances with sample sizes between 262 and 289 farmers per instance. For Marigold, farmers were 46 and 45 years and owned 2.4 ha and 2.1 ha on average, for the 208 non-participants and 59 participants, respectively.…”

Section: Included Studiesmentioning

confidence: 99%

“…The funnel plot shows a highly imprecise estimated effect size reported by Narayanan (2014) for contract farming of gherkins (the dot at the bottom) and the extremely high effect size for broiler chickens (the dot at the right-hand side of the funnel plot). To test the sensitivity of the result to this single observation, we replaced the four effect sizes reported by Narayanan (2014) by its average synthetic effect size and redrew the funnel plot ( Figure 6) and re-conducted the meta-regression (Table 7). This confirms that publication bias due to small study effects is a concern.…”

Section: Publication Biasmentioning

confidence: 99%

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The effectiveness of contract farming in improving smallholder income and food security in low- and middle-income countries: a mixed-method systematic review

Ton¹,

Desiere²,

Vellema³

et al. 2017

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The International Initiative for Impact Evaluation (3ie) is an international grant-making NGO promoting evidence-informed development policies and programmes. We are the global leader in funding, producing and synthesising high-quality evidence of what works, for whom, how, why and at what cost. We believe that using better and policy-relevant evidence helps to make development more effective and improve people's lives. 3ie systematic reviews 3ie systematic reviews appraise and synthesise the available high-quality evidence on the effectiveness of social and economic development interventions in low-and middleincome countries. These reviews follow scientifically recognised review methods, and are peer-reviewed and quality assured according to internationally accepted standards. 3ie is providing leadership in demonstrating rigorous and innovative review methodologies, such as using theory-based approaches suited to inform policy and programming in the dynamic contexts and challenges of low-and middle-income countries. About this reviewThe effectiveness of contract farming in improving smallholder income and food security in low-and middle-income countries: a mixed-method systematic review, was submitted in partial fulfilment of the requirements of grant SR6.1088 awarded under Systematic Review Window 6. This review is available on the 3ie website. 3ie is publishing this technical report as received from the authors; it has been formatted to 3ie style, however the tables and figures have not been reformatted. 3ie will also publish a brief of this review, designed for use by decision makers, which is forthcoming. This review will also be published in the Campbell Collaboration Library and will be available here.All content is the sole responsibility of the authors and does not represent the opinions of 3ie, its donors or its board of commissioners. Any errors are also the sole responsibility of the authors. Comments or queries should be directed to the corresponding author, Giel Ton, g.ton@ids.ac.uk Funding for this systematic review was provided by 3ie's donors, which include UK aid, the Bill & Melinda Gates Foundation, Hewlett Foundation and 16 other 3ie members that provide institutional support. The effectiveness of contract farming in improving smallholder income and food security in low-and middle-income countries: a mixed-method systematic review Plain language summaryContract farming is a sales arrangement between a farmer and a firm, agreed before production begins, which provides the farmer with resources or services. Many governments and donors promote contract farming as part of agricultural development policies. This systematic review analysed the evidence in the literature on income effects for smallholders. The review included all studies with an econometric design to reduce selection bias in effect estimates. The meta-analysis covered 26 empirical instances of contract farming in 13 developing countries. The contracts varied widely, with varying service packages provided by the firm to the farme...

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Profits from participation in high value agriculture: Evidence of heterogeneous benefits in contract farming schemes in Southern India

Cited by 119 publications

References 19 publications

Small Farmers in High-Value Chains: Binding or Relaxing Constraints to Inclusive Growth?

Small Farmers in High-Value Chains: Binding or Relaxing Constraints to Inclusive Growth?

Global value chains, large-scale farming, and poverty: Long-term effects in Senegal

The effectiveness of contract farming in improving smallholder income and food security in low- and middle-income countries: a mixed-method systematic review

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