Does the Contract Type Matter? Impact of Marketing and Production Contracts on Cashew Farmers’ Farm Performance in Ghana

Dubbert Caroline () and Abdulai Awudu ()
Additional contact information
Dubbert Caroline: Department of Food Economics and Consumption Studies, University of Kiel, Olshausenstraße 40, 24118 Kiel, Germany
Abdulai Awudu: Department of Food Economics and Consumption Studies, University of Kiel, Olshausenstraße 40, 24118 Kiel, Germany

Journal of Agricultural & Food Industrial Organization, 2022, vol. 20, issue 2, 119-134

Abstract: Many studies show that participation in contract farming has positive impacts on farm productivity and incomes. Most of the literature, however, does not take into account that contracts vary in their specifications, making empirical evidence scarce on the diverse impacts of different types of contracts. In this study, we investigate the driving forces of participation in marketing and production contracts, relative to spot markets. We also study the extent to which different contract types add additional benefits to smallholder farmers, using recent survey data of 389 cashew farmers in Ghana. To account for selection bias arising from observed and unobserved factors, we apply a multinomial endogenous switching regression method and implement a counterfactual analysis. The empirical results demonstrate that farmers who participate in production contracts obtain significantly higher cashew yields, cashew net revenues, and are more food secure compared to spot market farmers. We also find substantial heterogeneity in the impact of marketing and production contracts across scale of operation. Small sized farms that participate in production contracts tend to benefit the most. Marketing contracts, however, do not appear to benefit cashew farmers.

Keywords: contract farming schemes; farm size; food security; impact assessment (search for similar items in EconPapers)
JEL-codes: C31 O13 Q13 Q17 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/jafio-2020-0040 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bjafio:v:20:y:2022:i:2:p:119-134:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/jafio/html

DOI: 10.1515/jafio-2020-0040

Access Statistics for this article

Journal of Agricultural & Food Industrial Organization is currently edited by Azzeddine Azzam

More articles in Journal of Agricultural & Food Industrial Organization from De Gruyter
Bibliographic data for series maintained by Peter Golla ().