[Arouna, A., Michler, J.D., and Lokossou, J.C. 2021. Contract farming and rural transformation: Evidence from a field experiment in Benin. Journal of Development Economics, 151. https://doi.org/10.1016/j.jdeveco.2021.102626]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. This paper presents results from a field experiment on contract farming for rice production in Benin. While all contracts have positive effects on welfare and productivity measures, the paper finds 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.
