NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Contract Farming and Rural Transformation: Evidence from a Field Experiment in Benin

Aminou Arouna, Jeffrey D. Michler, Jourdain C. Lokossou

NBER Working Paper No. 25665
Issued in March 2019, Revised in September 2020
NBER Program(s):Development Economics

Contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. Yet, there is a lack of consensus on its ability to spur structural transformation in rural economies. We present results from a field experiment on contract farming in a developing country. While all contracts have positive effects on welfare and productivity measures, we find that the simplest contract has impacts nearly as large as contracts with additional attributes. This suggests that once price risk is resolved through the offer of a fixed-price contract, farmers are able to address other constraints on their own.

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Document Object Identifier (DOI): 10.3386/w25665

 
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