Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233750 
Year of Publication: 
2021
Citation: 
[Journal:] Agricultural Economics [ISSN:] 1574-0862 [Volume:] 52 [Issue:] 1 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2021 [Pages:] 51-66
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
Contractual agreements between smallholder farmers and agribusiness companies have gained in importance in many developing countries. While productivity and income effects of contracting in the small farm sector were analyzed in many previous studies, labor market and employment effects are not yet well understood. This is an important research gap, especially against the background of continued population growth and structural transformation. Here, we investigate the effects of two types of contractual agreements between large international processing companies and smallholder farmers on agricultural labor use, household labor allocation, and hired labor demand in Ghana's palm oil sector. We use cross-sectional survey data and a willingness-to-pay approach to control for unobserved heterogeneity between farmers with and without contracts. We find that agricultural labor intensity is substantially reduced through the contracts, because contracting in Ghana is associated with the adoption of labor-saving procedures and technologies. Simple marketing contracts lead to reallocation of the saved household labor to off-farm employment, whereas resource-providing contracts lead to a stronger reallocation of labor within the farming enterprise. Household labor is more affected by labor savings than hired labor.
Subjects: 
agricultural labor use
child labor
contract farming
gender
oil palm
rural employment
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version

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