Impact of Participation in Contract Farming on Smallholder Farmers’ Income and Food Security in Rural Benin: PSM and LATE Parameter Combined

Odountan Ambaliou Olounlade, Gu-Cheng Li, Sènakpon E. Haroll Kokoye, François Vihôdé Dossouhoui, Kuassi Auxence Aristide Akpa, Dessalegn Anshiso and Gauthier Biaou
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Odountan Ambaliou Olounlade: College of Economics and Management, Huazhong Agricultural University, No. 1 Shizishan Street, Hongshan District, Wuhan 430070, China
Gu-Cheng Li: College of Economics and Management, Huazhong Agricultural University, No. 1 Shizishan Street, Hongshan District, Wuhan 430070, China
Sènakpon E. Haroll Kokoye: Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama, AL 36849, USA
François Vihôdé Dossouhoui: Department of Economy Socio-Anthropology and Communication, University of Abomey-Calavi, Cotonou 01BP526, Benin
Kuassi Auxence Aristide Akpa: Faculté de Philosophie, Arts et Lettres, Université Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium
Dessalegn Anshiso: College of Economics and Management, Huazhong Agricultural University, No. 1 Shizishan Street, Hongshan District, Wuhan 430070, China
Gauthier Biaou: School of Agribusiness and Agricultural Policy, National University of Agriculture of Benin, Porto-Novo 01BP55, Benin

Sustainability, 2020, vol. 12, issue 3, 1-19

Abstract: Investigated in this work is the impact of contract farming participation on smallholder farmers’ income and food security in rice crop production in Northern Benin using 400 randomly selected rice farmer households. Unlike previous studies, we corrected for both observed and unobserved biases by combining propensity score matching (PSM) and the local average treatment effect parameter (LATE). The results showed significant negative consequences of partaking in rice contract farming. We found evidence of significant negative effects on rice production income at a 1% level. The more the rice farmers join in contract farming, the lower the farm income became. Decreased food consumption was also a result of contract farming participation for potential participants by a score of 60.64, placing their households at the food security status level of poor food consumption because the quantity and nutritional quality of the food consumed were inadequate. Contract farming is, therefore, not a reasonable policy instrument that can help farmers increase their income and improve their food security level in the Alibori Department, Benin if farmers do not diversify their crops. The necessary resources and economic environment are not yet in place to allow contract farming to take full advantage of its potential benefits. To prevent the wasting of scarce public resources, expanding contract farming would not be appropriate in marginal areas with markets and other infrastructure. Additional measures are needed for contract farming to be profitable for contracting actors and to ensure sustainability and the large-scale participation of farmers.

Keywords: contract farming; impact; income; food security; rice; Benin (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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