Contract farming is emerging as an important form of vertical coordination in the agrifood supply chain in India, and its socioeconomic consequences are attracting considerable attention in public policy debates. This study is an empirical assessment of the costs and benefits of contract farming in milk using information generated through field surveys in the western state of Rajasthan. Contract farming is found to be more profitable than independent production. Its major benefits come from a reduction in marketing and transaction costs, which are otherwise much higher in the open markets.

The distributional benefits of commercialization of agriculture, access to commercialization opportunities, and sharing of commercialization risks are functions of institutional arrangements. Obviously, the indirect food security and nutritional effects are, thereby, partly a function of such institutional arrangements. This chapter explores the relevance to food security of one form of contractual relationship in agriculture: formal contracts between producers and buyers (generally processors or exporters), a production and marketing system known as contract farming.

Contract farming is seen by proponents as a way to raise small-farm income by delivering technology and market information to small farmers, incorporating them into remunerative new markets. Critics, however, see it as a strategy for agribusiness firms to pass production risk to farmers, taking advantage of an unequal bargaining relationship. There is also concern that contract farming will worsen rural income inequality by favoring larger farmers.

In recent years, quality standards have become crucial for developing countries’ agricultural production systems in gaining access to high-value markets abroad or at home. High-value supply chains offer opportunities for high profits, but in order to comply with the required standards, suppliers in developing countries often need extensive support from agrifood companies.

"Contract farming is conventionally thought of as a form of industrial organization that helps to overcome high monitoring, supervision, and environmental mitigation costs incurred from ensuring a reliable and uniform-quality supply (from the standpoint of integrators) and high capital and small-scale input and service purchase costs (from the standpoint of individual farmers). But contract farming is also a private sector vertical coordination response to the changing demand for certifying the use of quality inputs to produce quality outputs and of safe production procedures.

The purpose of this study is twofold. On one hand, the objective is to assess the impact of new and more complex contracting schemes, as opposed to traditional marketing channels, on small farmers’ welfare. On the other hand, the study explores which may be the critical factors that determine the small farmers’ participation in these institutional arrangements. In this context, two critical factors are stressed. The first one has to do with access to credit and the second one is the size of the agricultural plot.

This paper is an empirical analysis of the gains from contract farming in the case of poultry production in the state of Andhra Pradesh in India. The paper finds that contract production is more efficient than noncontract production. The efficiency surplus is largely appropriated by the processor. Despite this, contract growers still gain appreciably from contracting in terms of lower risk and higher expected returns. Improved technology and production practices as well as the way in which the processor selects growers are what make these outcomes possible.

As in other societies in Southeast Asia
and the Pacific, customary social organization features
strongly in rural Timor-Leste. As well as providing avenues
for conflict resolution, the influence of customary systems
extends to land tenure. As the state, development partners,
private investors, non-governmental organizations (NGOs),
and others seek to promote rural development in Timor-Leste,
they will be forced to engage in some way with customary

The main focus of this book is land
redistribution. To forge greater consensus among
practitioners of land reform, and to enable them to make
better choices among the many options, the book describes
and analyzes alternative broad paths of implementation,
using examples and the detailed implementation mechanisms
that were used in those examples. The objectives of this
book are to review and analyze: a) the growing consensus on

Almost a decade after large land-based
investment for agriculture increased sharply, opinions on
its impact continue to diverge, partly because (positive or
negative) spillovers on neighboring smallholders have never
been rigorously assessed. Applying methods from the urban
literature on Mozambican data suggests that changes in the
number and area of large farms within 25 or 50 kilometers of
these investments raised use of improved practices, animal

Agriculture is among the most risk-prone
sectors in the economies of Central Asia. Production shocks
from weather, pests and diseases and adverse movements in
agricultural product and input prices not only impact
farmers and agri-business firms, but can also strain
government finances. Some of these risks are small and
localized and can be managed by producers. Others are the
result of more severe, exogenous shocks outside agriculture