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Safe gambles? Farmer perceptions of transactional certainty and risk-return tradeoffs in contract farming schemes in Southern India

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  • Sudha Narayanan

    (Indira Gandhi Institute of Development Research)

Abstract

This paper examines the idea that contract farming arrangements in developing countries even while offering farmers insurance against certain kinds of risks could simultaneously exacerbate other risks or entail new risks of their own. If correct, farmer perceptions of risks and returns would vary systematically across farmers with different contracting status and also across schemes. Using survey data that elicits subjective distributions of returns and psychometric mapping of risk perceptions from farmers, the study finds that contract farming, not unlike its alternatives, is associated with multiple dimensions of uncertainty and sources of risk, in ways that likely influence participation.

Suggested Citation

  • Sudha Narayanan, 2012. "Safe gambles? Farmer perceptions of transactional certainty and risk-return tradeoffs in contract farming schemes in Southern India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-021, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2012-021
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2012-021.pdf
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    Cited by:

    1. Michelson, Hope & Boucher, Stephen R. & Bai, Junfei & Jia, Xiangping & Huang, Jikun & Chen, Xinzhe, 2013. "Supermarket Supply Chains with Chinese Characteristics: The Case of Walmart's Direct Farms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150441, Agricultural and Applied Economics Association.
    2. Michelson, Hope, 2015. ""You Quit?" Influence of Neighbor Experience and Exit on Small Farmer Market Participation," MPRA Paper 62239, University Library of Munich, Germany.
    3. Aleksandra Tošović-Stevanović & Vladimir Ristanović & Dragan Ćalović & Goran Lalić & Milena Žuža & Gorica Cvijanović, 2020. "Small Farm Business Analysis Using the AHP Model for Efficient Assessment of Distribution Channels," Sustainability, MDPI, vol. 12(24), pages 1-15, December.

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    More about this item

    Keywords

    contract farming; subjective distributions; risk perceptions; stochastic dominance; elicitation methods;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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