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Contract-farming in Staple Food Chains: The Case of Rice in Benin

Miet Maertens and Katrien Vande Velde

World Development, 2017, vol. 95, issue C, 73-87

Abstract: In this paper, we analyze the impact of smallholder participation in a contract-farming scheme in the rice sector in Benin. We use data from a cross-sectional farm-household survey and different propensity score matching estimations to reveal how participation in a contract-farming scheme affects smallholder rice production. We find that contract-farming results in expansion of the rice area, intensification of rice production, increased commercialization of rice, and higher farm-gate prices, and ultimately contributes to rice output growth and increased income. Our findings imply that contract-farming can contribute to upgrading the rice supply chain and the development of the rice sector in Benin. Promoting and supporting the spread of contract-farming schemes in the sector might be an effective way to contribute to reaching the government goals of expanding rice production to become self-sufficient and improving rice quality to compete with imported rice. While there is a large empirical literature on contract-farming in high-value and commodity export sectors, studies on contract-farming in staple food sectors are very scarce. Our results document that contract-farming for staple food crops can be sustainable and benefit smallholder farmers; which is against theoretical expectations that contracting for staple food crops is not feasible because of contract-enforcement problems that stem from a low value of produce, low storage and transport costs, and a larger number of buyers in the chain. Our study contributes to understanding the role that contract-farming might play in the much needed upgrading of domestic and staple food crop sectors in developing countries.

Keywords: contract-farming; staple food supply chains; Rice; Africa; Benin (search for similar items in EconPapers)
Date: 2017
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Related works:
Working Paper: Contract-farming in staple food chains: the case of rice in Benin (2015) Downloads
Working Paper: Contract-farming in staple food chains: the case of rice in Benin (2014) Downloads
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