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Participation in contract farming and farm performance: Insights from cashew farmers in Ghana

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  • Caroline Dubbert

Abstract

The global demand for cashew nuts continues to increase steadily. However, many African countries face difficulties in marketing and adding value to the product. Using recent survey data of 391 cashew farmers in Ghana, this paper contributes to the growing evidence on the significance of contract farming (CF) in improving the welfare of rural households in developing countries. Specifically, the paper analyzes the factors that influence cashew farmers’ decisions to participate in CF, and the impact of participation on farmers’ performance. We employ a recently developed switching regression model with endogenous explanatory variables and endogenous switching to control for selection bias caused by observable and unobservable factors. The empirical results show that participation in CF significantly increases labor productivity and price margins, as well as cashew yields, and net revenues. A disaggregated analysis of the sample into farm size categories reveals that small‐sized cashew farms tend to benefit more through CF, compared to medium‐ and large‐sized farms.

Suggested Citation

  • Caroline Dubbert, 2019. "Participation in contract farming and farm performance: Insights from cashew farmers in Ghana," Agricultural Economics, International Association of Agricultural Economists, vol. 50(6), pages 749-763, November.
    • Handle: RePEc:bla:agecon:v:50:y:2019:i:6:p:749-763
    DOI: 10.1111/agec.12522
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    Cited by:

    1. Ali,Daniel Ayalew & Deininger,Klaus W., 2021. "Does Title Increase Large Farm Productivity ? Institutional Determinants of Large Land-BasedInvestments’ Performance in Zambia," Policy Research Working Paper Series 9702, The World Bank.
    2. Adaku, Abigail Ampomah & Amanor-Boadu, Vincent, 2021. "Typology and performance of inter-organizational relationships among Ghanaian farmers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(3), November.
    3. Hongyun Zheng & Puneet Vatsa & Wanglin Ma & Dil Bahadur Rahut, 2023. "Does agricultural cooperative membership influence off‐farm work decisions of farm couples?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 831-855, September.
    4. Murigi, Michael & Muchai, Dianah Ngui & Ogada, Maurice Juma, 2024. "Drivers of Participation in Smallholders Banana Contract Farming in Kenya," African Journal of Economic Review, African Journal of Economic Review, vol. 12(2), June.
    5. BEHERA, Deepak Kumar & SWAIN, Braja Bandhu, 2021. "Coperative-Led Contract Farming On Farm Productivity In India," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 21(1), pages 49-58.
    6. Mai Chiem Tuyen & Prapinwadee Sirisupluxana & Isriya Bunyasiri & Pham Xuan Hung, 2022. "Perceptions, Problems and Prospects of Contract Farming: Insights from Rice Production in Vietnam," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    7. Mai Chiem Tuyen & Prapinwadee Sirisupluxana & Isriya Bunyasiri & Pham Xuan Hung, 2022. "Stakeholders’ Preferences towards Contract Attributes: Evidence from Rice Production in Vietnam," Sustainability, MDPI, vol. 14(6), pages 1-21, March.
    8. Marwa, Erick & Manda, Julius, 2021. "Do Youth Farmers Benefit from Participating in Contract Farming: Evidence from French Beans Youth Farmers in Arusha, Tanzania," 2021 Conference, August 17-31, 2021, Virtual 315907, International Association of Agricultural Economists.
    9. Thanh‐Tung Nguyen & Trung Thanh Nguyen & Ulrike Grote, 2023. "Internet use and agricultural productivity in rural Vietnam," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1309-1326, August.
    10. Ali, Daniel Ayalew & Deininger, Klaus, 2022. "Institutional determinants of large land-based investments’ performance in Zambia: Does title enhance productivity and structural transformation?," World Development, Elsevier, vol. 157(C).
    11. Jaah, Mkupete & Fintel, Dieter von & Burger, Ronelle, 2021. "Maize Price Shock, Agriculture Production and Children Nutrition Outcomes in Tanzania," 2021 Conference, August 17-31, 2021, Virtual 314974, International Association of Agricultural Economists.
    12. Daniel Faibil & Martin Agyemang & Owusu Amponsah & Himanshu Gupta & Simonov Kusi-Sarpong, 2021. "Assessing drivers of post-harvest losses: tangible and intangible resources’ perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 15785-15829, November.
    13. Ayeduvor Selorm & D. B. S. Sarpong & Irene S. Egyir & Akwasi Mensah Bonsu & Henry An, 2023. "Does contract farming affect technical efficiency? Evidence from soybean farmers in Northern Ghana," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-22, December.
    14. Mengshuai Zhu & Chen Shen & Yajun Tian & Jianzhai Wu & Yueying Mu, 2022. "Factors Affecting Smallholder Farmers’ Marketing Channel Choice in China with Multivariate Logit Model," Agriculture, MDPI, vol. 12(9), pages 1-11, September.
    15. Creppy, Priscilla & Bicknell, Kathryn & Renwick, Alan, 2024. "Understanding smallholder preferences for joint ventures in Ghana's rice sector: Improving market access through inclusive business models," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 470-481.
    16. Caroline Dubbert & Awudu Abdulai & Sadick Mohammed, 2023. "Contract farming and the adoption of sustainable farm practices: Empirical evidence from cashew farmers in Ghana," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 487-509, March.
    17. Guyo Godana Dureti & Martin Paul Jr. Tabe‐Ojong & Enoch Owusu‐Sekyere, 2023. "The new normal? Cluster farming and smallholder commercialization in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 900-920, November.

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