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Article
Publication date: 28 September 2021

Thuyen Thi Pham, Hoa Le Dang, Ngoc Thi Anh Pham and Huy Duc Dang

Farmers' risk attitudes and risk perceptions play an essential role in shaping risk management strategies to address risks and uncertainties. Contract farming is…

Abstract

Purpose

Farmers' risk attitudes and risk perceptions play an essential role in shaping risk management strategies to address risks and uncertainties. Contract farming is considered as one of the feasible approaches to tackle farmers' concerns. However, risk perspectives under various categories have not been included in studies on farmers' preferences for contract farming in the literature, especially in Vietnam. This study aims to determine factors affecting farmers' choices of different contract farming practices.

Design/methodology/approach

The explanatory factor analysis (EFA) and multinomial logit model (MNL) were applied to explore the impacts of risk perspectives on farmers' preferences for contract farming. Data have been collected from 211 rice farmers in An Giang Province, “the rice bowl” of the Mekong Delta, Vietnam.

Findings

The study found that farm size, cooperatives, extension, market access and trust have significantly impacted on contract participation while a delay payment was a barrier for farmers' motivation to opt for the contract. Farmers' contract choices were also influenced by their risk attitudes and perceptions under different risk dimensions. The financial, policy and human risk-averse behavior predisposed farmers to single out the full contract while the policy and human risk-loving and production, market and finance risk-averse respondents were in favor of the marketing contract. Moreover, the findings indicated that the more farmers concerned about risk of weather and market, the more choices for the full contract, whereas the risk perceptions of weather and policy encouraged farmers to use the limited contract. By contrast, farmers who perceived the impacts of risk of diseases/pests and human were likely to adopt the marketing contract.

Research limitations/implications

This study just focuses on collecting data from farmers’ perspective. Future studies involving stakeholders such as enterprises and policy makers are strongly recommended so as to design suitable contracts and enforce contract schemes effectively in Vietnam.

Originality/value

The findings also contribute to the literature on different types of contracts and the multidimensional aspect of risk for rice production in Vietnam.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 2 March 2021

Reuben Jagri Binpori, Dadson Awunyo-Vitor and Camillus Abawiera Wongnaa

In order to improve access to resources for smallholder farmers, efforts are being made to promote contract farming in Ghana. This is seen as a strategy to increase…

Abstract

Purpose

In order to improve access to resources for smallholder farmers, efforts are being made to promote contract farming in Ghana. This is seen as a strategy to increase agricultural productivity of farmers, give better market access and guarantee adequate supply of raw materials to agro-based industries. However, the challenge is whether contract farming leads to improvement in food security status of farmers. The study therefore seeks to explore to what extent farmers' food security status is influenced by their participation in contract farming activities.

Design/methodology/approach

Using Cragg's double-hurdle model to analyse participation in contract farming, the authors control for selection bias using propensity score matching applied to a data set of 336 observations to examine the impact of contract farming on the food security levels of rice farmers in Ghana.

Findings

The results of this study show that yield of paddy and the wealth of the farmer are the main factors that influence the quantity of paddy rice to be contracted in contract farming arrangements. This study also finds that participation in contract farming will increase food security by 109%. In conclusion, contract farming has a significant positive impact on the farmers' food security status.

Originality/value

Agricultural policies and rural development initiatives supporting the promotion and expansion of contract farming should be pursued to persuade more farmers to produce under contract farming agreements.

Details

World Journal of Science, Technology and Sustainable Development, vol. 18 no. 2
Type: Research Article
ISSN: 2042-5945

Keywords

Article
Publication date: 19 September 2022

Paul Mukucha and Felix Chari

The study sought to determine the possibility of supplier development in the form of contract farming as a determinant of supply chain resilience in fast-food outlets…

Abstract

Purpose

The study sought to determine the possibility of supplier development in the form of contract farming as a determinant of supply chain resilience in fast-food outlets. This is against the background of the restaurant having been designated as one of the industries that remained operational when the other industries were affected by the two-decade-long economic meltdown and more recently COVID-19 pandemic.

Design/methodology/approach

Data were collected using questionnaires from the consenting restaurants with the most senior procurement personnel in target restaurants as the informants and analysed using analysis of moment structures (AMOS) software.

Findings

The results revealed that indeed supplier development in the form of contract farming leads to supply chain resilience as indicated by improved supply chain visibility, supply chain flexibility, and supply chain redundancy. Fast-food restaurant businesses that have not yet adopted supplier development in the form of contract farming are therefore encouraged to adopt it as a way of enhancing their resilience to traditional supply chain disruptions such as transport shortages, droughts, and more recently COVID-19 pandemic.

Originality/value

It is to the best knowledge of these researchers, that no studies have attempted to analyse the three drivers of supply chain resilience, namely supply chain redundancy, supply chain flexibility, and supply chain visibility in a single study and link them to a single antecedent.

Details

Continuity & Resilience Review, vol. 4 no. 3
Type: Research Article
ISSN: 2516-7502

Keywords

Article
Publication date: 22 November 2011

H. Holly Wang, Yanping Zhang and Laping Wu

The purpose of this paper is to investigate contract farming in China, using vegetable production as a case. Specifically, the authors analyze farmers' contract decisions…

2551

Abstract

Purpose

The purpose of this paper is to investigate contract farming in China, using vegetable production as a case. Specifically, the authors analyze farmers' contract decisions for different types of contracts, their contract compliance behaviors, and their profitability affected by the contracts both analytically and empirically.

Design/methodology/approach

The authors assume growers with alternative risk preferences make the contract decisions to maximize their expected utilities, under exogenous market price risks and contract terms determined by the processor or wholesaler. Both fixed price and floating price contracts are analyzed. Two surveys of 185 and 85 farm households, respectively, are obtained in Shandong province in 2010, and econometric analyses with both Logit and least square regressions are conducted.

Findings

The results indicate that the determining factors for contract farming are related to farmers' risk attitude, gender, yield, farm size and labor availability. However, contrary to the common belief that contracts are a risk management tool for risk averse farmers, the risk lovers tend to use contract farming instead of risk averters. Female household heads and farms with more labors tend not to use contracts, but larger farms with more acreage are more likely to contract. These suggest Chinese farmers' primary motivation of contracting is not market price risk management, but rather seeking better offers and marketing transaction cost reduction.

Originality/value

The authors believe that this is the first econometric study to analyze contract farming allowing different types of contracts in China. The scenarios include cases without contracts, with fixed price contracts, and with floating price contracts, where the contract price changes to reflect the market price, a very unique yet popular situation in China. Each of the cases is also considered under the situation whether default is possible.

Details

China Agricultural Economic Review, vol. 3 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 9 December 2020

Qiao Liang, Lin Li and Rongrong Bai

The purpose of this paper is to estimate the effect of vegetable producers' inclusiveness in supply chain coordination on vegetable production performance and potential…

Abstract

Purpose

The purpose of this paper is to estimate the effect of vegetable producers' inclusiveness in supply chain coordination on vegetable production performance and potential spillover effect on farm and non-farm income.

Design/methodology/approach

A comprehensive dataset comprised of 410 paired vegetable producers in China is applied. Propensity score matching (PSM) estimation method is used to control for the selection bias problem.

Findings

The empirical results indicate that contracting farming does not have significant effect on yield or profit of vegetable production, but promote producers to obtain quality certification. In comparison, cooperative membership has positive effects on the yield, profit and quality certification of producers. Additionally, cooperatives generate positive spillover effects on members' farm and non-farm income, though the results are sensitive to unobserved factors. The inclusion of spillover effects helps to find out the potential unobserved effects which are neglected by most studies and design better policies to promote the development of agricultural companies and farmer cooperatives.

Originality/value

First, empirical evidence is provided for theories regarding the roles of different supply chain coordination modes on producers. Second, the analysis on evaluating the effects of supply chain coordination also considers the spillover effect on the farming of other products and even non-farm work of involved producers. Third, a unique dataset comprised of 420 paired vegetable producers, based on an extensive survey is built.

Details

British Food Journal, vol. 123 no. 4
Type: Research Article
ISSN: 0007-070X

Keywords

Book part
Publication date: 29 July 2020

Stefano Grando, Fabio Bartolini, Isabelle Bonjean, Gianluca Brunori, Erik Mathijs, Paolo Prosperi and Daniele Vergamini

This chapter opens the second part of the Volume, focusing on the small farms' role and dynamics within the evolving food system. Assessing small farmers' actual and…

Abstract

This chapter opens the second part of the Volume, focusing on the small farms' role and dynamics within the evolving food system. Assessing small farmers' actual and potential contribution to the change towards a sustainable food and nutrition security requires a deep understanding of their strategic decision-making processes. These processes take place in a context highly conditioned by internal and external conditions, including the complex relations between farm and household, which are mapped and described. Building on an adaptation of Porter's model (Porter, 1990), the chapter investigates how farmers, given those conditions, define their strategies (in particular their innovation strategies) aimed at economic and financial sustainability through a multidisciplinary analysis of scientific literature. Internal conditions are identified in the light of the Agricultural Household Model (Singh & Subramanian, 1986) which emphasizes how family farming strategies aim at combining business-related objectives, and family welfare. Then, a comprehensive set of external conditions is identified and then grouped within eight categories: ‘Factors’, ‘Demand’, ‘Finance and Risk’, ‘Regulation and Policy’, ‘Technological’, ‘Ecological’, ‘Socio-institutional’ and ‘Socio-demographic’. Similarly, six types of strategies are identified: ‘Agro-industrial competitiveness’, ‘Blurring farm borders’, ‘Rural development’, ‘Risk management’, ‘Political support’ and ‘Coping with farming decline’.

Article
Publication date: 5 February 2018

Biliang Luo

Based on the brief historical review, the purpose of this paper is to expound the target and bottom line for the farmland institutional reform of in China, analyze the…

1091

Abstract

Purpose

Based on the brief historical review, the purpose of this paper is to expound the target and bottom line for the farmland institutional reform of in China, analyze the “Chinese scenes” and historical heritage of farmland institutional arrangement, evaluate the policies and their effects over the last four decades and outline the keynotes and possible direction of the future reform.

Design/methodology/approach

The paper builds the analytical clue of “institutional target – institutional heritage – policy effort – realistic dilemma – future direction” and review and forecast the Chinese farmland institutional reform.

Findings

The farmland institution is an important issue with Chinese characteristics. Over the last four decades, the farmland institutional reform in China has focused on “stabilizing the land property rights” and “promote the farmland transfer.” As the study indicates, the promotion of farmland transfer has not effectively improved the scale economy of agriculture and stabilizing land property rights by titling may restrain the development of farmland transfer market because farmland transfer is of special market logic.

Originality/value

It depends on the revitalization of farmland management rights to resolve the transaction constraint of personal property and its endowment effect in farmland transfer. And, classifying the land management property to involve farmers into the economy of division can be reference for the reform of traditional agriculture worldwide.

Details

China Agricultural Economic Review, vol. 10 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 3 September 2018

Anjani Kumar, Devesh Roy, Gaurav Tripathi, P.K. Joshi and Rajendra P. Adhikari

The purpose of this paper is to quantify the benefits of contract farming (CF) on farmers’ income and adoption of food safety measures (FSMs) at the farm level. The paper…

Abstract

Purpose

The purpose of this paper is to quantify the benefits of contract farming (CF) on farmers’ income and adoption of food safety measures (FSMs) at the farm level. The paper also investigates the determinants of participation in CF.

Design/methodology/approach

The study is based on a survey of 600 tomato farmers from Nepal. Descriptive statistics, regression analysis (using instrumental variable) and propensity score matching have been used to accomplish the objectives of the study.

Findings

The study found that the CF ensures higher returns to farmers as well as higher adoption of FSMs at the farm level. The contract farmers earned about 38 per cent higher net returns and had 38 per cent higher adoption of FSM as compared to independent farmers. Caste, occupation, farm size and cropping intensity significantly affected farmers’ participation in CF.

Research limitations/implications

The analysis based on cross-section data has limitations to consider unobserved farmer-level individual heterogeneity.

Originality/value

This study will provide an empirical base to promote CF in Nepal. The study will also contribute to bridge the gap in literature on the drivers of CF and its impact on smallholders’ income and compliance with FSM in Nepal.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 8 no. 3
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 26 July 2013

Susanna Levina Middelberg

The purpose of this paper is to identify, present and compare agricultural production financing alternatives available to grain producers in South Africa. From the South…

Abstract

Purpose

The purpose of this paper is to identify, present and compare agricultural production financing alternatives available to grain producers in South Africa. From the South African perspective, agricultural land cannot always be utilised as collateral and therefore alternative financing has developed.

Design/methodology/approach

The study makes use of an exploratory study by applying qualitative techniques. The research population was agricultural finance providers in South Africa and semi‐structured interviews were conducted with representatives of the sample.

Findings

The production financing alternatives identified and presented include: grain contract financing; grain contract financing with additional collateral; and corporate farming. A comparison of these alternatives indicates that although the traditional balance sheet financing is a cheaper form of financing, using agricultural land as collateral has a number of limitations, especially within the South African context.

Practical implications

Using agricultural land as collateral to obtain production financing is not always viable considering the present South African agricultural environment. Commercial grain producers should therefore consider the identified alternative production financing.

Originality/value

Limited research on agricultural production finance from the South African perspective has been performed. Furthermore, no previous research on identifying production financing alternatives without utilising agricultural land as collateral has been performed. This paper therefore provides new knowledge by combining South African practice with theory.

Details

Agricultural Finance Review, vol. 73 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 29 April 2020

John Kanburi Bidzakin, Simon C. Fialor, Dadson Awunyo-Vitor and Iddrisu Yahaya

Even though many studies identify positive effects of contract farming (CF) on the livelihood of farmers, the use of CF as a tool to increase farm performance is unsettled…

Abstract

Purpose

Even though many studies identify positive effects of contract farming (CF) on the livelihood of farmers, the use of CF as a tool to increase farm performance is unsettled debate. Information on CF is relatively not available in staple food chains. Theoretical considerations have shown that there are challenges in employing CF in staple food chains such as rice. With the increasing trend of rice CF in Ghana, it is very critical to establish its performance in rice production in Ghana. It is therefore imperative to analyse the impact of CF on the performance of smallholder rice farmers.

Design/methodology/approach

A survey was conducted where 350 rice farmers selected through a stratified sampling technique using structured questionnaires were interviewed. Descriptive and inferential statistics including stochastic frontier analyses and endogenous treatment effect regression were used to analyse the data.

Findings

The results from the endogenous treatment effect regression model show that CF improves rice farmers' technical, allocative and economic efficiencies by 21, 23 and 26%, respectively. Farm size and CF were identified as common factors influencing technical, allocative and economic efficiency measures of the farmers positively. It further identified age of farmer, educational level and household labour as factors influencing farmers' participation in CF positively.

Research limitations/implications

It is recommended that CF is a good tool to enhance rice production efficiency, and hence, farmers should be encouraged to participate in CF as strategy to enhance the local rice production in Ghana.

Social implications

The outcome of this study has the potential to influence rice production in the country. The country is a net importer of rice and just about 35% self-sufficient in rice production.

Originality/value

This study is the first to assess performance of CF in rice crop production in Ghana and also one of the few to use efficiency as a performance measure.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 10 no. 3
Type: Research Article
ISSN: 2044-0839

Keywords

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