Agricultural and Biological Sciences
4 years ago

Simple contracts in farming boost welfare and productivity in developing countries

SSRN Electronic Journal
Contract Farming and Rural Transformation: Evidence from a Field Experiment in Benin
Aminou Arouna, Jeffrey D. Michler, Jourdain C. Lokossou

Paper Summary

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Contract farming in developing countries can help improve farmers' welfare and productivity. A study in Benin showed that even simple contracts can have positive effects, similar to more complex ones. Once price risk is reduced with fixed-price contracts, farmers can overcome other challenges on their own.