Evaluation of a Hybrid Seed Contract Between Smallholders and a Multinational Company in East Java, Indonesia
The Journal of Development Studies, 2010
Posted: 8 Jan 2019
Date Written: September 8, 2010
This article evaluates a hybrid seed contract between Indonesian smallholders and Pioneer Hybrid International. A transaction cost approach was used to analyse contract participation, total farm gross margins and labour and chemical use. The empirical results suggest: (a) the contract favours farmers with more irrigated land; (b) the contract improved returns to farm capital and was welfare improving; (c) the contract increased the demand for non-family labour, particularly female labour; and (d) the contract increased the intensity of chemical use. The success of the contract was attributed to the nature of the contracting process, which was between Pioneer and grower groups and not individual smallholders.
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