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Impact of contract farming on rice farm performance: Endogenous switching regression

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  • John Kanburi Bidzakin
  • Simon C. Fialor
  • Dadson Awunyo-Vitor
  • Iddrisu Yahaya

Abstract

Contract farming (CF) is increasing been used as a strategy in rice production in Ghana while there is no empirical data supporting it. This study investigated the importance of CF in rice production. Cross-sectional farm household level data collected from 350 rice farmers randomly selected across the rice production areas of Ghana was used. The adoption and casual impact of CF was estimated using endogenous switching regression and propensity score matching methods. Results revealed positive and significant relationship between CF and farm performance measures (yield and gross margins). Results indicate that, CF increases yield and gross margins significantly. It further identified educational level, rice farm size and ISFM as positive determinants of contract participation. This evidence provides strong support for efforts to promote CF in Ghana. Educated farmers should be targeted for CF participation because their propensity to participate in CF is high. Sensitising our illiterate farmers to participate in CF should be vigorously pursued. CF should also be encouraged as a means to promote the adoption of ISFM technology. CF is recommended as a good tool for developing the local rice value chain in Ghana.

Suggested Citation

  • John Kanburi Bidzakin & Simon C. Fialor & Dadson Awunyo-Vitor & Iddrisu Yahaya, 2019. "Impact of contract farming on rice farm performance: Endogenous switching regression," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1618229-161, January.
    • Handle: RePEc:taf:oaefxx:v:7:y:2019:i:1:p:1618229
    DOI: 10.1080/23322039.2019.1618229
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    1. Geoffrey Muricho & Jourdain Lokossou & Hippolyte Affognon & Benjamin Ahmed & Haile Desmae & Hakeem Ajeigbe & Michael Vabi & Jummai Yila & Essegbemon Akpo & Christopher Ojiewo, 2020. "Estimating and Decomposing Groundnut Gender Yield Gap: Evidence from Rural Farming Households in Northern Nigeria," Sustainability, MDPI, vol. 12(21), pages 1-20, October.
    2. Shadrack Kipkogei & Ruth Karoney & John Kipkorir Tanui, 2024. "Impact of Cooperative Membership on Tea Marketing Strategies and Farmers’ Income in Kericho, Kenya: Use of Endogenous Switching Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(8), pages 3156-3173, August.
    3. Yigezu, Yigezu A. & Abbas, Enas & Swelam, Atef & Sabry, Sami R.S. & Moustafa, Moustafa A. & Halila, Habib, 2021. "Socioeconomic, biophysical, and environmental impacts of raised beds in irrigated wheat: A case study from Egypt," Agricultural Water Management, Elsevier, vol. 249(C).
    4. William F. Vásquez & Laura Beaudin, 2020. "On the use of hypothetical price data to estimate hedonic models in a developing country context," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 219-231, December.
    5. Saroj & Kirtti Ranjan Paltasingh, 2024. "What promotes production contract in Indian agriculture? Managing market risk versus profit orientation," Agricultural Economics, International Association of Agricultural Economists, vol. 55(1), pages 140-153, January.
    6. Yigezu A. Yigezu & Tamer El‐Shater, 2021. "Socio‐economic impacts of zero and reduced tillage in wheat fields of the Moroccan drylands," Agricultural Economics, International Association of Agricultural Economists, vol. 52(4), pages 645-663, July.
    7. Gemechu, Abera & Jaleta, Moti & Zemedu, Lemma & Beyene, Fekadu, 2024. "Impact of membership of seed-producer cooperatives on commercialisation among smallholder farmers in the central highlands of Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 19(1), March.
    8. Emokpae, O. P. & Okoruwa, V.O., 2024. "Agricultural Technology Utilization and the Welfare Outcomes of Smallholder Farming Households in Nigeria: An Insight from Rice Farmers in the Anchor Borrower Programme," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344266, International Association of Agricultural Economists (IAAE).
    9. Kumar, K. Nirmal Ravi & Reddy, M. Jagan Mohan & Shafiwu, Adinan Bahahudeen & Reddy, A. Amaraendar, 2023. "Impact of Farmer Producer Organizations on Price and Poverty Alleviation of Smallholder Dry Chillies Farmers in India," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 4(3), August.
    10. Md Omar Faruk & Keshav Lall Maharjan, 2022. "Impact of Farmers’ Participation in Community-Based Organizations on Adoption of Flood Adaptation Strategies: A Case Study in a Char-Land Area of Sirajganj District Bangladesh," Sustainability, MDPI, vol. 14(14), pages 1-20, July.
    11. Anette Ruml & Catherine Ragasa & Matin Qaim, 2022. "Contract farming, contract design and smallholder livelihoods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(1), pages 24-43, January.
    12. Arnold L. Musungu & Beatrice W. Muriithi & Changeh J. Ghemoh & Dorothy Nakimbugwe & Chrysantus M. Tanga, 2023. "Production, consumption, and market supply of edible crickets: insights from East Africa," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-23, December.
    13. Angelo Frascarelli & Stefano Ciliberti & Gustavo Magalhães de Oliveira & Gabriele Chiodini & Gaetano Martino, 2021. "Production Contracts and Food Quality: A Transaction Cost Analysis for the Italian Durum Wheat Sector," Sustainability, MDPI, vol. 13(5), pages 1-12, March.
    14. 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.
    15. Phiri, Isaac, 2020. "The effect of access to finance on commercialisation of smallholder maize farmers in Eswatini," Research Theses 334755, Collaborative Masters Program in Agricultural and Applied Economics.
    16. Kabayiza, Alexis & Owuor, George & Langat, K.J. & Mugenzi, Patrice & Niyitanga, Fidèle, 2021. "Determinants and Effect Evaluation of Credits on the Farm Outcome - a Micro-Perspective of Tea Production from Rwanda," 2021 Conference, August 17-31, 2021, Virtual 315091, International Association of Agricultural Economists.

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