Business

Archaeology

Pure mathematics

Mathematics

Economic growth

Agriculture

Welfare

Economics

Geography

Microeconomics

Productivity

Production (economics)

Contract farming

Agricultural economics

Field (mathematics)

Market economy

Developing country

Journal of 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 for rice production in Benin. 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.

Contract farming and rural transformation: Evidence from a field experiment in Benin