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

See all articles by Paul Winters

Paul Winters

International Fund for Agricultural Development (IFAD)

Phil Simmons

University of New England (Australia) - Graduate School of Agricultural and Resource Economics

Ian Patrick

Independent

Date Written: September 8, 2010

Abstract

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.

Suggested Citation

Winters, Paul and Simmons, Phil and Patrick, Ian, Evaluation of a Hybrid Seed Contract Between Smallholders and a Multinational Company in East Java, Indonesia (September 8, 2010). The Journal of Development Studies, 2010, Available at SSRN: https://ssrn.com/abstract=3306693

Paul Winters (Contact Author)

International Fund for Agricultural Development (IFAD) ( email )

Via Paolo di Dono
Rome, 00142
Italy

Phil Simmons

University of New England (Australia) - Graduate School of Agricultural and Resource Economics ( email )

Australia

Ian Patrick

Independent ( email )

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