Contract Farming and Rural Transformation: Evidence from a Field Experiment in Benin

70 Pages Posted: 19 Mar 2019 Last revised: 26 May 2021

See all articles by Aminou Arouna

Aminou Arouna

Africa Rice Center (WARDA)

Jeffrey D. Michler

University of Arizona

Jourdain Lokossou

CGIAR - International Crops Research Institute for the Semi-arid Tropics (ICRISAT)

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Date Written: March 2019

Abstract

Contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. Yet, there is a lack of consensus on its ability to spur structural transformation in rural economies. We present results from a field experiment on contract farming in a developing country. While all contracts have positive effects on welfare and productivity measures, we find that the simplest contract has impacts nearly as large as contracts with additional attributes. This suggests that once price risk is resolved through the offer of a fixed-price contract, farmers are able to address other constraints on their own.

Suggested Citation

Arouna, Aminou and Michler, Jeffrey D. and Lokossou, Jourdain, Contract Farming and Rural Transformation: Evidence from a Field Experiment in Benin (March 2019). NBER Working Paper No. w25665, Available at SSRN: https://ssrn.com/abstract=3354319

Aminou Arouna (Contact Author)

Africa Rice Center (WARDA) ( email )

Kennedy
Bouake, Bouake 2551
Ivory Coast (Cote D'ivoire)

Jeffrey D. Michler

University of Arizona ( email )

Department of History
Tucson, AZ 85721
United States

Jourdain Lokossou

CGIAR - International Crops Research Institute for the Semi-arid Tropics (ICRISAT) ( email )

Nairobi, 39063
Kenya

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