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This article reviews the literature on contract farming (CF) in India and assesses the impact of smallholders’ perceived production risks on the adoption of CF; the impact of CF on smallholders’ food security; and its impact on employment generation in their farming enterprises. We also show the impact of the outcome variables by risk preference of smallholders. Using farm-level data and endogenous switching regression methods, this study presents three key findings. First, the perception of weather and pest risk, access to irrigation facilities, extension visits, and access to institutional credit are the main drivers of CF adoption. Second, CF adoption increases food security and varies with the revealed risk preference of smallholders, and risk-seeking smallholders tend to gain higher food security. Third, regardless of revealed risk preferences, smallholders who did not adopt CF benefit from adoption by reducing their labor requirements, with no significant losses in yield. [ABSTRACT FROM AUTHOR]

This study investigates the impact of contract farming (CF) through cooperatives in tomatoes on employment and economic performance of smallholders in a low‐income developing country. Using farm‐level data from Nepal and a nonparametric matching estimator, the study finds a negative and significant effect of CF on employment. However, CF through cooperatives has a positive and significant impact on profits, and yield. We find that small farms (≤0.51 ha) with contracts tend to gain in profits and yield per hectare. However, large farms (>0.85 ha) with contracts employ significantly less hired labor per hectare. Finally, our estimates reveal that, compared to independent producers, smallholder households in Nepal that engaged in CF with both input and output conditions received, on average, higher profits and yield. Findings underscore the importance of cooperatives and CF. [EconLit citations: C31, D23, Q12, Q13] [ABSTRACT FROM AUTHOR]

Earlier studies have empirically illustrated the significant role that investment in agricultural research and extension (R&E) plays in enhancing productivity, accelerating agricultural growth and reducing poverty in India. This article adds to the existing literature on the spatial and temporal dimensions of agricultural R&E investments with special emphasis on returns to investment in major states of India. The study reveals that significant structural changes have occurred in the pattern of agricultural R&E investments across sectors and states over the past five decades. R&E investments on the crop and fishery sectors improved over time at the expense of the livestock sector. Similarly, the states' share in aggregate R&E investments declined over the years, while the centre's improved proportionately. Returns to investments differed significantly according to geography, with the states that had a higher share of total factor productivity growth in their output growth faring better than the rest in relative terms. The R&E investment in the crop sub-sector in India has been especially rewarding, generating returns that are close to 50 per cent. In general, the findings of the study suggest the engineering of a deliberate shift in focus from alternative types of investment to agricultural R&E to meet the future growth challenges in India's agriculture sector. [ABSTRACT FROM AUTHOR]

Demand for organic basmati rice (OBR), both at home and abroad, coupled with policy reforms have given rise to contract farming (CF) production in India. OBR production, however, is highly susceptible to weather and pest risks. This study investigates the impact of smallholders’ perceived production risks on their adoption of CF in OBR farming. We also assess the impact of CF in OBR production on yields, prices received, and the livelihood of OBR producers. We use farm-level data from smallholder organic basmati rice farms in India and the endogenous switching regression method to account for heterogeneity. Although CF in OBR led to lower yields, it increased the prices producers received and improved the livelihood of OBR producers. The impact of CF varied with farmers’ revealed risk attitudes. Risk-loving OBR growers with CF experienced the highest loss in yields, and risk-averse OBR growers with CF received the highest prices. We find that the OBR growers who did not adopt CF would benefit from adopting it, regardless of their risk attitudes, especially when it comes to prices received and livelihood. [ABSTRACT FROM AUTHOR]

Nepal’s population continues to grow, but the agricultural sector’s performance remains almost stagnant. This has led to a decline in the per capita availability of food. Increasing agricultural productivity is the key to agricultural growth, and one strategy for increasing agricultural productivity is to use improved seeds. This study investigates the impact of contract farming (CF) in high yielding varieties (HYV) of paddy seed production on costs, yield, and profits of smallholder farms in Nepal. Using farm-level data and a non-parametric propensity score matching estimator, the study finds a significant positive impact of contract HYV seed farming on revenues, profits, and yield, and a significant negative impact on total costs of production. Additionally, very small farms (⩽0.43 ha) with CF in HYV paddy seeds tend to gain the most when it comes to yield per hectare. Our estimates reveal that the average smallholder household in Nepal engaged in CF with input conditions receives higher profits. However, farmers engaged in CF with output conditions tend to have higher yields but smaller profits. Finally, farmers engaged in CF in HYV paddy seeds with both input and output conditions have the highest yield gains and significantly higher profits. [ABSTRACT FROM AUTHOR]