Choice of Contract Farming Strategies, Productivity, and Profits: Evidence from High-Value Crop Production

Journal of Agricultural and Resource Economics · Volume 45, Issue 3, September 2020 · Pages 589–604

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Abstract

This study examines the impact of the choice of contract farming (CF) conditions on the productivity and profitability of ginger growers. Using farm-level data from Nepal and the selectivity-corrected multinomial endogenous switching regression (MESR) method, we found that ginger growers increased yields by 16%, 19%, and 15% by participating in CF with input conditions (IC), with output conditions (OC), and with input and output conditions (BC), respectively. Ginger growers also increased profits by participating in CF. Price difference in spot and contract markets, distance to market and transportation facilities, and farm location are important factors affecting participation in any form of CF.

Article details

Issue
Volume 45, Issue 3
Published
September 2020
Pages
589–604
Full text
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