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Sugarcane outgrowers in Ethiopia: ’Forced’ to remain poor?

Mengistu Assefa Wendimu (), Arne Henningsen and Peter Gibbon ()
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Mengistu Assefa Wendimu: Danish Institute for International Studies (DIIS), Natural Resources and Development
Peter Gibbon: Danish Institute for International Studies (DIIS), Global Transformations

No 2015/06, IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics

Abstract: Contract farming is often seen as a panacea to many of the challenges faced by agricultural production in developing countries. Given the large heterogeneity of contract farming arrangements, it is debatable whether all kinds of contract farming arrangements offer benefits to participating smallholders. We apply matching methods to analyze the effects of a public sugarcane outgrower scheme in Ethiopia. Participation in the outgrower scheme significantly reduces the income and asset stocks of outgrowers who contributed irrigated land to the outgrower scheme, while the effect was insignificant for outgrowers who contributed rain-fed land. We provide several explanations and discuss policy implications.

Keywords: Productivity; Outgrower scheme; contract farming; sugarcane; propensity score; genetic matching; Ethiopia (search for similar items in EconPapers)
JEL-codes: Q12 Q13 O13 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-agr and nep-dev
Date: 2015-04
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Related works:
Journal Article: Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor? (2016) Downloads
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