Dataset Information

Smallholder farmers and contract farming in developing countries.

ABSTRACT: Poverty is prevalent in the small-farm sector of many developing countries. A large literature suggests that contract farming-a preharvest agreement between farmers and buyers-can facilitate smallholder market participation, improve household welfare, and promote rural development. These findings have influenced the development policy debate, but the external validity of the extant evidence is limited. Available studies typically focus on a single contract scheme or on a small geographical area in one country. We generate evidence that is generalizable beyond a particular contract scheme, crop, or country, using nationally representative survey data from 6 countries. We focus on the implications of contract farming for household income and labor demand, finding that contract farmers obtain higher incomes than their counterparts without contracts only in some countries. Contract farmers in most countries exhibit increased demand for hired labor, which suggests that contract farming stimulates employment, yet we do not find evidence of spillover effects at the community level. Our results challenge the notion that contract farming unambiguously improves welfare. We discuss why our results may diverge from previous findings and propose research designs that yield greater internal and external validity. Implications for policy and research are relevant beyond contract farming.

SUBMITTER: Meemken EM

PROVIDER: S-EPMC6955373 | biostudies-literature | 2020 Jan

REPOSITORIES: biostudies-literature

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Smallholder farmers and contract farming in developing countries.

Meemken Eva-Marie EM Bellemare Marc F MF

Proceedings of the National Academy of Sciences of the United States of America 20191213 1

Poverty is prevalent in the small-farm sector of many developing countries. A large literature suggests that contract farming-a preharvest agreement between farmers and buyers-can facilitate smallholder market participation, improve household welfare, and promote rural development. These findings have influenced the development policy debate, but the external validity of the extant evidence is limited. Available studies typically focus on a single contract scheme or on a small geographical area ...[more]

PMID: 31836695

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Project description:ContextThe COVID-19 pandemic caused unprecedented global disruption and continues to wreak havoc. Dire predictions were made about the risks to smallholder farmers in lower- and middle- income, but hard data have been lacking. We present the results from 9201 interviews with smallholder farmers from seven countries.ObjectiveThe objectives are to describe: i) how farmers perceive the key effects of the COVID-19 pandemic and containment measures on livelihoods and food security; ii) the effects on agricultural activities; iii) the coping strategies households deployed.MethodsHousehold surveys were conducted as part of ongoing monitoring programs during the latter half of 2020. Sites in seven countries were covered: Burundi; Kenya; Rwanda; Tanzania; Uganda; Zambia; and Vietnam. Findings are representative of smallholder farmers across multiple districts per country.Results and conclusionsThe effects of the COVID-19 containment measures were widespread and often perceived to be severe. Food purchase, off-farm income, sale of farm produce, and access to crop inputs were all affected. In locations under more stringent restrictions during the time of the survey, up to 80% of households had to reduce food consumption and/or variety. Almost all households with off-farm incomes reported reductions, by half on average. A half to three-quarters of households (depending on the location) with income from farm sales reported losses compared to the pre-pandemic situation. In locations with more relaxed containment measures in place during the time of the survey, less frequent and less severe economic and food security outcomes were perceived by the respondent, with around 20% of households reporting negative outcomes. Mobility restrictions, reduced market access, crashes in sale price for agricultural goods, and soaring prices for food purchase were key factors. Sale prices generally dropped for all agricultural products in any given location, and affected not only high-value perishable products, but also staple crops such as maize and cassava. Depending on the location, between 30% and 90% of the households applied coping strategies in response to the pandemic during 2020. There was an almost complete absence of official aid amongst households interviewed.SignificanceOur results raise the thorny issue of how best to balance containment of disease against the wellbeing of the vulnerable rural population in lower- and middle-income countries. There is a risk that the buffering capacity of rural people will become exhausted. Possible policy measures to limit negative outcomes include i) tiered mobility restrictions with travel allowed for economic reasons; ii) short-term price guarantee schemes to stabilise the food system; iii) direct aid; iv) the timely re-installation of distribution channels for agricultural inputs.

Project description:In Tajikistan, owning beef cattle is an important survival mechanism for smallholder farmers to alleviate poverty. Therefore, beef cattle farming enterprises should indeed strive to maximize profit to excel and flourish in a free economy. Nevertheless, smallholder beef cattle farmers are known for making little profit. Thus, this study was set to evaluate the profitability of beef cattle farming and its determinants to enhance profit maximization among smallholder beef cattle farmers in the Baljovan District of Khatlon region, Tajikistan. A total of 388 farming households were chosen at random and purposive for the study. The cross-sectional data collected using questionnaires was analyzed by using descriptive, gross margin (GM), and ordinary least squares (OLS) regression models. Based on the descriptive analyses, the mean age of beef cattle farmers was 52.73 years, with a household size of 7.07 members. The beef cattle farmers had an average of 18.23 cattle herd size with 8.54 years of farming experience. The average land area possessed by farmers was 10.59 hectares. Among farmers, men (98.2%) dominated beef cattle farming activities. Around 83.8% of farmers had a college grade (higher literacy). Besides, around 89.4% of farmers had access to farm credits. However, only 71.4% of farmers used farm credit points to produce beef cattle. Most of the farmers (89.7%) had access to accurate market information. Such market information enabled 75.8% of farmers to sell their beef cattle to open market (profitable) outlets rather than middlemen. About 89.4% had access to veterinary services. Additionally, about 82.7% of farmers acknowledged the availability of pasture for grazing, which motivated 87.6% of farmers to be involved in selling contracts. Furthermore, economic investigation results revealed that on average, farmers had a gross margin (GM-profit) of 353.77 US$ per cattle, with feed costs (58.6%) and medications costs (26.1%) accounting for the largest share of total variable costs. Meanwhile, the profitability of beef cattle farming among farmers was significantly influenced by education level, family size, farming experience, pasture availability, land size owned, selling contract, feed costs, medications expenses, access to credits, and sales costs (P < 0.05). This study concluded that beef cattle production is a feasible business. However, the potential for increased profitability is significant if existing resources are efficiently coordinated and production expenses, notably feed and healthcare costs, are minimized. Thus, the government should develop additional measures for addressing concerns such as capacity building, suitable and freely available pasture as well as health management, to boost beef cattle profitability among farmers in Tajikistan.

Project description:The present study aimed to classify smallholder dairy production systems by analyzing land allocation for various crop types and characterizing them based on integration with specific crops which is gap in earlier studies. A total of 360 smallholder farmers were interviewed to generate firsthand information in addition to using secondary data sources. The classification utilized K-means clustering, while discriminant analysis was applied to accentuate the distinct characteristics of dairy production systems (DPSs). Subsequently, for a particular crop to be considered dominant, the minimum farmland allocation had to exceed 30%. Based on this, the 360 respondent farmers in the study areas were categorized into four distinct DPSs: diversified crop-based (DCB) at 31%, enset-based (EB) at 28%, cereal-based (CB) at 24% and cash crop-based (CCB) with coffee, khat, vegetables, fruits, and sugarcane accounting for 17%. Within the CCB dairy production system, where cash crops were cultivated most dominantly, averaging 56% of the farmland, farmers reported the highest annual income and, consequently, acquired more improved dairy cows, facilitating their entry into intensive dairy production. Ownership of improved dairy cattle breeds, use of agro-industrial byproducts as feed, practicing stall feeding and better housing are observed practices in this DPS that relate to the intensification of dairy production. This positive relationship was observed between the commercialization of crops and the intensification of dairy production in the CCB dairy production system. In the EB dairy system, enset dominates with a 33% area share, leading to increased residues for cattle feed. They keep large herds of local cattle, limited crossbreeding experience, and prefer conventional feeding. The CB system allocates 47% of land to cereals, justifying cereal residues as primary dairy feed. Cultivating grasses like Pennisetum pedicellatum and Phalaris arundinacea is also highly valued in the system. The DCB system, with diverse crops (none exceeding 30%), implies varied residues for dairy feed. These findings reveal unique characteristics across dairy systems, indicating a positive correlation between crop commercialization and dairy intensification. Hence, understanding each type of DPS and its characteristics will help development experts or those in charge of designing agricultural policy to establish the best strategic plans for enhancing the productivity of dairy cattle under smallholder conditions.

Dataset Information

Smallholder farmers and contract farming in developing countries.

Publications

Smallholder farmers and contract farming in developing countries.

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