[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v36y2020i2p259-280.html
   My bibliography  Save this article

Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana

Author

Listed:
  • Awal Abdul‐Rahaman
  • Awudu Abdulai
Abstract
Despite the fact that contracting facilitates farmer participation in agrifood value chains, evidence on farmers’ participation in different forms of contracts and the impact on farm performance is still limited. This study examines the determinants and impacts of vertical coordination mechanism‐spot market transactions, written, and verbal contract‐on‐farm performance of rice farmers in northern Ghana, using a multinomial BFG model to account for selectivity bias. The findings indicate that vertical coordination participation decision is significantly influenced by age, access to credit, labor, association membership, and sales to institutional buyers. The empirical results also reveal significant gains in farm performance outcomes from participating in written and verbal contracts, relative to spot market transactions.

Suggested Citation

  • Awal Abdul‐Rahaman & Awudu Abdulai, 2020. "Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 259-280, April.
    • Handle: RePEc:wly:agribz:v:36:y:2020:i:2:p:259-280
    DOI: 10.1002/agr.21628
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21628
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21628?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Maertens, Miet & Vande Velde, Katrien, 2017. "Contract-farming in Staple Food Chains: The Case of Rice in Benin," World Development, Elsevier, vol. 95(C), pages 73-87.
    2. Wanglin Ma & Awudu Abdulai, 2016. "Linking apple farmers to markets," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 8(1), pages 2-21, February.
    3. Awudu Abdulai & Wallace E. Huffman, 2005. "The Diffusion of New Agricultural Technologies: The Case of Crossbred-Cow Technology in Tanzania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 645-659.
    4. Ragasa, Catherine & Dankyi, Awere & Acheampong, Patricia & Wiredu, Alexander Nimo & Chapoto, Antony & Asamoah, Marian & Tripp, Robert, 2013. "Patterns of adoption of improved rice technologies in Ghana:," GSSP working papers 35, International Food Policy Research Institute (IFPRI).
    5. Hope C. Michelson, 2013. "Small Farmers, NGOs, and a Walmart World: Welfare Effects of Supermarkets Operating in Nicaragua," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 628-649.
    6. Marc F. Bellemare & Lindsey Novak, 2017. "Contract Farming and Food Security," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 357-378.
    7. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    8. Aditya R. Khanal & Ashok K. Mishra, 2014. "Agritourism and off-farm work: survival strategies for small farms," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 65-76, November.
    9. Christoph Saenger & Maximo Torero & Matin Qaim, 2014. "Impact of Third-party Contract Enforcement in Agricultural Markets-A Field Experiment in Vietnam," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(4), pages 1220-1238.
    10. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    11. Barrett, Christopher B. & Bachke, Maren E. & Bellemare, Marc F. & Michelson, Hope C. & Narayanan, Sudha & Walker, Thomas F., 2012. "Smallholder Participation in Contract Farming: Comparative Evidence from Five Countries," World Development, Elsevier, vol. 40(4), pages 715-730.
    12. Isaac Maina Kariuki & Jens‐Peter Loy, 2016. "Contractual Farming Arrangements, Quality Control, Incentives, and Distribution Failure in Kenya's Smallholder Horticulture: A Multivariate Probit Analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 547-562, November.
    13. Heath Henderson & Alan G. Isaac, 2017. "Modern Value Chains and the Organization of Agrarian Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 379-400.
    14. Dimova, Ralitza & Gang, Ira N., 2007. "Self-selection and wages during volatile transition," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 612-629, September.
    15. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. Tullio Jappelli & Jörn-Steffen Pischke & Nicholas S. Souleles, 1998. "Testing For Liquidity Constraints In Euler Equations With Complementary Data Sources," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 251-262, May.
    18. Reardon, Thomas & Barrett, Christopher B. & Berdegué, Julio A. & Swinnen, Johan F.M., 2009. "Agrifood Industry Transformation and Small Farmers in Developing Countries," World Development, Elsevier, vol. 37(11), pages 1717-1727, November.
    19. Catherine Ragasa & Jennifer Golan, 2014. "The role of rural producer organizations for agricultural service provision in fragile states," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 537-553, September.
    20. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    21. Timothy Park & Ashok K. Mishra & Shawn J. Wozniak, 2014. "Do farm operators benefit from direct to consumer marketing strategies?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 213-224, March.
    22. Park, Timothy A., 2009. "Assessing the Returns from Organic Marketing Channels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-15, December.
    23. Kleemann, Linda & Abdulai, Awudu & Buss, Mareike, 2014. "Certification and Access to Export Markets: Adoption and Return on Investment of Organic-Certified Pineapple Farming in Ghana," World Development, Elsevier, vol. 64(C), pages 79-92.
    24. Bolwig, Simon & Gibbon, Peter & Jones, Sam, 2009. "The Economics of Smallholder Organic Contract Farming in Tropical Africa," World Development, Elsevier, vol. 37(6), pages 1094-1104, June.
    25. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    26. Johan F. M. Swinnen & Miet Maertens, 2007. "Globalization, privatization, and vertical coordination in food value chains in developing and transition countries," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 89-102, December.
    27. Bellemare, Marc F., 2012. "As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming," World Development, Elsevier, vol. 40(7), pages 1418-1434.
    28. Caroline Roussy & Aude Ridier & Karim Chaib & Marie Boyet, 2018. "Marketing contracts and risk management for cereal producers," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 616-630, June.
    29. Neda Trifković, 2016. "Vertical coordination and farm performance: evidence from the catfish sector in Vietnam," Agricultural Economics, International Association of Agricultural Economists, vol. 47(5), pages 547-557, September.
    30. Awudu Abdulai & Eliud A. Birachi, 2009. "Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(1), pages 103-121.
    31. Dilip Dutta & Ihab Magableh, 2006. "A socio-economic study of the borrowing process: the case of microentrepreneurs in Jordan," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1627-1640.
    32. Baydas, Mayada M. & Meyer, Richard L. & Aguilera-Alfred, Nelson, 1994. "Discrimination against women in formal credit markets: Reality or rhetoric?," World Development, Elsevier, vol. 22(7), pages 1073-1082, July.
    33. repec:fth:pennfi:69 is not listed on IDEAS
    34. Ito, Junichi & Bao, Zongshun & Su, Qun, 2012. "Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation," Food Policy, Elsevier, vol. 37(6), pages 700-709.
    35. Alex Winter‐Nelson & Anna Temu, 2005. "Impacts of prices and transactions costs on input usage in a liberalizing economy: evidence from Tanzanian coffee growers," Agricultural Economics, International Association of Agricultural Economists, vol. 33(3), pages 243-253, November.
    36. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    37. Jeffrey M. Wooldridge, 2015. "Control Function Methods in Applied Econometrics," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 420-445.
    38. Jenny C. Aker & Ishita Ghosh & Jenna Burrell, 2016. "The promise (and pitfalls) of ICT for agriculture initiatives," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 35-48, November.
    39. Keijiro Otsuka & Yuko Nakano & Kazushi Takahashi, 2016. "Contract Farming in Developed and Developing Countries," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 353-376, October.
    40. Ma, Wanglin & Abdulai, Awudu, 2016. "Does cooperative membership improve household welfare? Evidence from apple farmers in China," Food Policy, Elsevier, vol. 58(C), pages 94-102.
    41. Luis Huesca & Mario Camberos, 2010. "Selection-bias correction based on the multinomial logit: An application to the Mexican labor market," Mexican Stata Users' Group Meetings 2010 08, Stata Users Group.
    42. Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 219-234.
    43. Ashok K. Mishra & Anjani Kumar & Pramod K. Joshi & Alwin D'Souza, 2018. "Cooperatives, contract farming, and farm size: The case of tomato producers in Nepal," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 865-886, October.
    44. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    45. Rao, Elizaphan J.O. & Qaim, Matin, 2011. "Supermarkets, Farm Household Income, and Poverty: Insights from Kenya," World Development, Elsevier, vol. 39(5), pages 784-796, May.
    46. Arega, D.A. & Manyong, Victor M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, George D., 2008. "Smallholder marketed surplus and input use under transactions costs: maize supply and fertilizer demand in Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52074, African Association of Agricultural Economists (AAAE).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Awal Abdul‐Rahaman & Awudu Abdulai, 2022. "Mobile money adoption, input use, and farm output among smallholder rice farmers in Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 236-255, January.
    2. Yazeed Abdul Mumin & Awudu Abdulai, 2022. "Informing Food Security and Nutrition Strategies in Sub‐Saharan African Countries: An Overview and Empirical Analysis," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 364-393, March.
    3. Francisco Benitez‐Altuna & Valentina C. Materia & Jos Bijman & Daniel Gaitán‐Cremaschi & Jacques Trienekens, 2024. "Farmer–buyer relationships and sustainable agricultural practices in the food supply chain: The case of vegetables in Chile," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 3-30, January.
    4. Zhihui Gao & Xinrui Liu & Xinling Zhang, 2024. "The Impact of Tie Strength on the Sustainable Participation of Farmers in Contract Farming: An Empirical Study in Inner Mongolia, China," Sustainability, MDPI, vol. 16(4), pages 1-17, February.
    5. Wen Li & Chenying Liu & Qizhi Yang & Yulan You & Zhihang Zhuo & Xiaolin Zuo, 2023. "Factors Influencing Farmers’ Vertical Collaboration in the Agri-Chain Guided by Leading Enterprises: A Study of the Table Grape Industry in China," Agriculture, MDPI, vol. 13(10), pages 1-14, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Soullier, Guillaume & Moustier, Paule, 2018. "Impacts of contract farming in domestic grain chains on farmer income and food insecurity. Contrasted evidence from Senegal," Food Policy, Elsevier, vol. 79(C), pages 179-198.
    2. Bellemare, Marc F. & Bloem, Jeffrey R., 2018. "Does contract farming improve welfare? A review," World Development, Elsevier, vol. 112(C), pages 259-271.
    3. Viet Hoang & Vinh Nguyen, 2023. "Determinants of small farmers' participation in contract farming in developing countries: A study in Vietnam," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 836-853, July.
    4. Arouna, Aminou & Michler, Jeffrey D. & Lokossou, Jourdain C., 2021. "Contract farming and rural transformation: Evidence from a field experiment in Benin," Journal of Development Economics, Elsevier, vol. 151(C).
    5. Delelegne A. Tefera & Jos Bijman, 2021. "Economics of contracts in African food systems: evidence from the malt barley sector in Ethiopia," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-21, December.
    6. Viet Hoang, 2021. "Impact of Contract Farming on Farmers’ Income in the Food Value Chain: A Theoretical Analysis and Empirical Study in Vietnam," Agriculture, MDPI, vol. 11(8), pages 1-16, August.
    7. Awal Abdul‐Rahaman & Gazali Issahaku & Wanglin Ma, 2023. "Agrifood system participation and production efficiency among smallholder vegetable farmers in Northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 812-835, July.
    8. Ragasa, Catherine & Lambrecht, Isabel & Kufoalor, Doreen S., 2018. "Limitations of Contract Farming as a Pro-poor Strategy: The Case of Maize Outgrower Schemes in Upper West Ghana," World Development, Elsevier, vol. 102(C), pages 30-56.
    9. Ton, Giel & Vellema, Wytse & Desiere, Sam & Weituschat, Sophia & D'Haese, Marijke, 2018. "Contract farming for improving smallholder incomes: What can we learn from effectiveness studies?," World Development, Elsevier, vol. 104(C), pages 46-64.
    10. Kuijpers, Rob, 2020. "Integrated Value Chain Development: Evidence from Bangladesh," Food Policy, Elsevier, vol. 97(C).
    11. Abdul-Rahaman, Awal & Abdulai, Awudu, 2018. "Do farmer groups impact on farm yield and efficiency of smallholder farmers? Evidence from rice farmers in northern Ghana," Food Policy, Elsevier, vol. 81(C), pages 95-105.
    12. Hisatoshi Hoken & Qun Su, 2018. "Measuring the effect of agricultural cooperatives on household income: Case study of a rice‐producing cooperative in China," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 831-846, October.
    13. Ma, Wanglin & Abdulai, Awudu, 2015. "Linking apple farmers to markets: Determinants and impacts of marketing contracts in China," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 202719, Agricultural and Applied Economics Association.
    14. Shahzad, Muhammad Faisal & Abdulai, Awudu, 2020. "Adaptation to extreme weather conditions and farm performance in rural Pakistan," Agricultural Systems, Elsevier, vol. 180(C).
    15. Marc F. Bellemare, 2018. "Contract farming: opportunity cost and trade†offs," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 279-288, May.
    16. Ochieng, Dennis O. & Veettil, Prakashan C. & Qaim, Matin, 2017. "Farmers’ preferences for supermarket contracts in Kenya," Food Policy, Elsevier, vol. 68(C), pages 100-111.
    17. Wanglin Ma & Awal Abdul‐Rahaman & Gazali Issahaku, 2023. "Welfare implications of participating in agri‐value chains among vegetable farmers in Northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 793-811, July.
    18. Khan, Muhammad Fawad & Nakano, Yuko & Kurosaki, Takashi, 2019. "Impact of contract farming on land productivity and income of maize and potato growers in Pakistan," Food Policy, Elsevier, vol. 85(C), pages 28-39.
    19. repec:oup:apecpp:v:40:y:2018:i:3:p:379-401. is not listed on IDEAS
    20. Otsuka, Keijiro & Ali, Mubarik, 2020. "Strategy for the development of agro-based clusters," World Development Perspectives, Elsevier, vol. 20(C).
    21. Huma Neupane & Krishna P. Paudel & Qinying He, 2023. "Impact of cooperative membership on market performance of Nepali goat farmers," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 805-830, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:36:y:2020:i:2:p:259-280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.