TY - CONF

T1 - The effects of contract farming on efficiency and productivity of small-scale sunflower farmers in Tanzania

AU - Henningsen, Arne

AU - Mpeta, Daniel F.

AU - Adem, Anwar S.

AU - Kuzilwa, Joseph A.

AU - Czekaj, Tomasz Gerard

PY - 2015

Y1 - 2015

N2 - Due to changes in the global agricultural system and support from various organizations,contract farming has recently been significantly expanded in many developing countries. Aconsiderable body of literature analyses the impact of contract farming on the welfare of smallholders, whereas its impact on efficiency and productivity is mostly overlooked. This studyaddresses this salient gap by combining the approaches of Bravo-Ureta, Greene, and Solís(Empirical Economics, 2012) and Rao, Brümmer, and Qaim (AJAE, 2012). We first estimateseparate production frontiers for contract farmers and non-contract farmers that accountfor potential selection biases, and second, we create a meta-frontier. Using cross-sectionaldata from sunflower farmers in Tanzania, we find a significant selection bias. Contract farmingsignificantly increases the yield potential but lowers the average group technical efficiency.As the first effect is slightly larger than the second, we find a small positive effect of contractfarming on productivity.

AB - Due to changes in the global agricultural system and support from various organizations,contract farming has recently been significantly expanded in many developing countries. Aconsiderable body of literature analyses the impact of contract farming on the welfare of smallholders, whereas its impact on efficiency and productivity is mostly overlooked. This studyaddresses this salient gap by combining the approaches of Bravo-Ureta, Greene, and Solís(Empirical Economics, 2012) and Rao, Brümmer, and Qaim (AJAE, 2012). We first estimateseparate production frontiers for contract farmers and non-contract farmers that accountfor potential selection biases, and second, we create a meta-frontier. Using cross-sectionaldata from sunflower farmers in Tanzania, we find a significant selection bias. Contract farmingsignificantly increases the yield potential but lowers the average group technical efficiency.As the first effect is slightly larger than the second, we find a small positive effect of contractfarming on productivity.

M3 - Paper

T2 - International Conference of Agricultural Economists (ICAE)

Y2 - 8 August 2015 through 14 August 2015

ER -