•Firms need to provide clear income benefits to farmers to prevent them stepping out.•With a partial control for publication bias, the pooled average income effect of contract farming lies between ...23% and 55%.•This estimate is upward biased because contract schemes that fail in the initial years are not covered by research.•Contract farmers tend to be significantly larger or richer than the average farmer in the region.•A price premium was present in the most effective cases, especially when no cooperative was involved in its set-up.
Contract farming is a sales arrangement between a farmer and a firm, agreed before production begins, which provides the farmer with resources or services. Many governments and donors promote contract farming as part of agricultural development policies. However, there is serious concern whether smaller farmers can benefit from these arrangements.
This paper presents the results of a systematic review that analysed the evidence in the literature on income effects for smallholders. The review included all studies with an econometric design to reduce selection bias in effect estimates. The meta-analysis covered 26 empirical instances of contract farming in 13 developing countries. The contracts varied widely, with varying service packages provided by the firm to the farmers. Using truth table analysis, we explored combinations of services associated with relatively high or relatively low income effects.
The meta-analysis resulted in an overall pooled average effect size of 38%. However, we show that there are publication and survivor biases. Non-significant effects are systematically underreported. Moreover, all studies assessed the effectiveness of the contractual arrangement when these had already survived the start-up problems. Both sources of bias lead to an overestimation of the average income effect.
The findings point to the need for substantial income effects for contract farming arrangements to survive over time. Both firms and farmers face risks; for example, farmers may side-sell products after having received the services from the firm. The most effective contractual arrangements included a price premium, especially when there was no farmers’ organisation to broker the contract between the farmer and the firm.
We show that smallholders can benefit from the contractual arrangement. However, the poorest farmers are rarely included; we show that, in 61% of the cases, the contract farmers had significantly larger landholdings or more assets than the average farmers in the region.
Traditional Ecological Knowledge (TEK) adjusts to changes in its socioecological system (SES). We focus on understanding if and how TEK´s spiritual, social, and ecological aspects relate to each ...other and examine the main socioecological factors that impact the transmission of TEK within and across generations. Based on quantitative and qualitative data on traditional weather forecasting in rural Bolivia, we found four factors affecting TEK’s dissemination: formal education, migration, a new religion, and the politicization of rural unions. Despite the slow disappearance of TEK, we also found that hybrid knowledge reinforces interest in TEK.
In developing countries the demand for products of animal origin is expected to grow rapidly in the coming years. Using data collected from 200 urban households this study examines the evolution of ...the dairy market in Ethiopia. In particular, this study suggests that although the Ethiopian dairy market remains extremely thin and volatile, the commercialization of processed dairy products through supermarkets is expanding and is expected to keep doing so in the foreseeable future. Increasing urbanization and corresponding changes in consumer preferences, behaviour and purchasing power are the identified causes for the rise of supermarket-processor dairy chains. This study shows also that emerging dairy chains provide new market opportunities to Ethiopian farmers, but the existence of retail-industrial monopolies and monopsonies jeopardize farmers’ economic benefits to a great extent. The study concludes with some implications for policy and further research.
Since the late 1990s, the number of supermarkets in South Africa has been steadily growing. Due to a more effective and efficient management and procurement system, the supermarkets can benefit from ...economics of scale and sell food at a relative low price. In this paper, we present a case study of two villages in the Transkei area of South Africa. In these poor rural communities, the majority of households now buy their main food items from supermarkets rather than from local shops and farmers. While presenting an important step towards livelihood development and food security, these supermarkets form also a strong competitor for local agricultural sales. The supermarkets provide many food items at lower prices. With an increase in income, the households look for variety and exotism in their food products, and will most likely find this in the supermarkets, rather than the local stores. We argue therefore that development programs should focus on the local growers’ access to the supermarket procurement systems.
We use a non‐parametric approach to investigate the (inverse) relationship between farm productivity and farm size. A kernel regression is used on data of mixed cropping systems to study the ...determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production were gathered from 640 households in 2007 in two Northern provinces of Burundi. Our results do not reject the findings of an inverse relationship between farm size and productivity. However, we find that size returns vary substantially with farm size, that is, between 0.2 for the smallest farms and 0.8 for the largest farms. Other factors that significantly affect production include soil quality. Finally, we find a significant positive association between food security and farm size.
In recent years, new tools for funding nature conservation have been designed. Because poverty is often significant in areas with high biodiversity, the improvement of local livelihoods is frequently ...considered as a secondary goal of new financing mechanisms besides nature conservation. The buffer zone of the Podocarpus National Park in Ecuador is such a high biodiversity zone. In this paper, we compare the cost-effectiveness and development potential of three different mechanisms to finance nature conservation implemented in this buffer zone, namely (a) an organic coffee label, (b) the Socio Bosque Program, a nationwide payment scheme for private forest conservation, and (c) FORAGUA, a regional water fund. This paper describes the functioning and the scope of the mechanisms and analyses their environmental and socio-economic impacts which are compared to the total costs. Results show that the water fund has the highest additionality in ecosystem service provision, while the payment scheme is the most cost-effective both for current as for increased ecosystem service provision and for extra rural job creation. Organic coffee certification has the highest positive impact on rural income creation.
•Farmers’ awareness and perception of existing legislation governing on-farm trees are examined.•Many farmers are unaware of laws governing access and trade of NTFP in Cameroon.•Strict enforcement of ...laws on NTFP does not limit intentions to plant trees on farm.•A majority would accept certificates of origin to distinguish farm fruits trees from wild ones.
From theory it is expected that forestry laws and regulations affect the adoption of agroforestry technologies, such as planting of indigenous fruit trees. These trees are important sources of nutrients and income to thousands of farmers. However data on farmers’ perceptions and behaviour towards such policy instruments are scarce and contradictory. Based on data collected from 394 households in Cameroon, using a structured questionnaire, farmers’ awareness, perception and willingness to accept policy instruments governing on-farm trees were assessed. The study further investigated whether the policy instruments would affect their intentions to plant selected indigenous fruit trees on their farms. The analysis found that a majority of farmers are unaware of the laws governing access and trade in indigenous fruit tree species. Furthermore, even if strictly applied, a significant majority of farmers (60%) would not be discouraged by the regulations, from planting trees on their farms because it constitutes part of their traditional farming practices. Yet, the authors argue that planting of indigenous fruit tree species could increase under simplified rules, as 40% of the farmers do claim they would refuse to plant such trees if existing regulations are strictly enforced. The study therefore concludes that there is a need for new policies to attract more farmers to integrate indigenous fruit trees on their farms. Given the current trend to encourage on-farm tree planting to address food security and climate change issues, this is especially relevant.
This paper analyses the efficiency with which water is used in small-scale irrigation schemes in North-West Province in South Africa and studies its determinants. In the study area, small-scale ...irrigation schemes play an important role in rural development, but the increasing pressure on water resources and the approaching introduction of water charges raise the concern for more efficient water use. With the data envelopment analysis (DEA) techniques used to compute farm-level technical efficiency measures and sub-vector efficiencies for water use, it was shown that under constant returns to scale (CRS) and variable returns to scale (VRS) specification, substantial technical inefficiencies, of 49% and 16%, respectively, exist among farmers. The sub-vector efficiencies for water proved to be even lower, indicating that if farmers became more efficient using the technology currently available, it would be possible to reallocate a fraction of the irrigation water to other water demands without threatening the role of small-scale irrigation. In a second step, Tobit regression techniques were used to examine the relationship between sub-vector efficiency for water and various farm or farmer characteristics. Farm size, landownership, fragmentation, the type of irrigation scheme, crop choice and the irrigation methods applied showed a significant impact on the sub-vector efficiency for water. Such information is valuable for extension services and policy makers since it can help to guide policies towards increased efficiency.
► Coffee cooperatives have difficulties to attract members and to limit sales leakages. ► Local (independent) traders constitute a major market for coffee producers. ► Members sell coffee to traders ...they know, trust and interact with in other markets. ► Cooperatives relax exclusion mechanisms to secure supply for the washing machines.
Apart from the difficulty to attract new members, leakage of sales outside the cooperative is a major challenge for the coffee cooperatives in Rwanda. Local (independent) traders still constitute a major market for coffee producers. Yet, cooperatives also accept the produce from non-members and pay them the same price. Our objective in this paper is to analyse the importance of this phenomenon of double side-selling. We collected data from a sample of 170 coffee farmers. We use a probit model to analyse characteristics linked to cooperative membership and to study double side-selling. We describe the trade relationships between farmers and the cooperative on the one hand, and between farmers and traders on the other by the attributes of transaction costs involved in the trade of coffee. Membership characteristics include easy access to labour, land tenure, risk aversion, and mutual trust between farmers and cooperatives’ management. Preference to sell to traders can be explained by the trust farmers seem to have in them after the repeated transactions in credit and basic consumption items and by long-term relationships in the community.
Abstract
This paper investigates the factors affecting the access of rural individual and group-based households to formal credit in the Mekong Delta (MD), Vietnam. Poverty levels in the Mekong Delta ...have reduced significantly over the last decades, but in the rural areas they remain significant. If it is assumed that access to credit is a vehicle for poverty alleviation, it is necessary to assess how households decide on borrowing. This paper identifies the determinants of the decision to borrow and of the amount that is borrowed by using the double hurdle model and Heckman selection model. Data used in this paper was obtained from a survey of 325 rural households, conducted between May and October 2009. The results indicate that household's capital endowments, marital status, family size, distance to the market center, and locations affect the probability to ask for and amount of credit.
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