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Contract farming has frequently been shown to increase the income of participating households. Whether contract farming increases other aspects of household welfare, however, remains unclear. Using a 1,200-household data set from Madagascar and the results of a contingent valuation experiment aimed at eliciting respondent's willingness to pay to participate in contract farming, we show that for the average household, participating in contract farming (i) reduces the duration of the hungry season experienced by the household by about 10 days and (ii) increases the likelihood that the household's hungry season will end by almost 20 percent in any given month. Further, we find that these effects are even more pronounced for households with a larger number of children and for households with a larger number of female children, who often bear a disproportionate share of the burden of food insecurity.

Keywords: Contract Farming ; Outgrower Schemes ; Grower-Processor Contracts ; Agricultural Value Chains ; Food Security

Subject(s): Agribusiness

Agricultural and Food Policy

Food Security and Poverty

International Development

Issue Date: May 26 2014

Publication Type: Working or Discussion Paper

PURL Identifier:

Total Pages: 30

JEL Codes: L24; O13; O14; Q12

Record appears in: Agricultural and Applied Economics Association (AAEA) > 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota

Autor: Bellemare, Marc F. ; Novak, Lindsey


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